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Challenges for Higher Education

Higher Education and Employment: East Asian Trends

The increasing expansion of higher education has led to pressure on graduate employment as well as an increased competitive focus on the labor market. Credit: Lingnan University.

June 10, 2022

In recent years, labor markets in East Asia have experienced a massive influx of college-educated workers, as graduates of a massified higher education system have sought jobs. The massive expansion of higher education in East Asia has unquestionably created pressure on graduate employment, thereby making the labor market highly competitive. Table 1 presents unemployment rates in East Asia (selected countries/regions) in 2020 by educational attainment. The figures may not directly reflect a causal relationship between higher education massification and rising unemployment rates, as the unemployment rates remain relatively low. However, there is increasing evidence that recent graduates have been unable to obtain strong competitive employment positions during the massification in recent years, raising questions about the quality of jobs graduates are entering, including whether they are in the formal or informal labor market.

Table 1. Data source: Hong Kong SAR, https://www.statistics.gov.hk/pub/B10100062020AN20B0100.pdf; Japan, https://news.yahoo.co.jp/byline/fuwaraizo/20210325-00228342/; Korean Statistical Information Service, https://kosis.kr/eng/search/searchList.do; Census and Statistics Department, National Statistics, Republic of China (Taiwan), https://eng.stat.gov.tw/ct.asp?xItem=42761&ctNode=1609&mp=5.

 Massification of higher education and challenge for graduate employment

With the acceleration of globalization and the transformation towards the knowledge-based economy, many emerging countries expanded their higher education system to improve their global competitiveness. However, contrary to expectations, graduates have yet to demonstrate strong competitiveness in the labor market. Although global unemployment rates decreased, more than 170 million people remain unemployed (International Labor Office, 2019). Statistics from the World Bank show that the young employed population exhibited a downward trend after the start of the twenty-first century. Compared with Europe, Northern America, and Africa, the decline in youth employment rates in Asian countries, especially in East Asia, is more pronounced (see Figure 1). Data from East Asia reveal a fluctuating increase in youth unemployment rates, which intensified under the current COVID-19 pandemic recession.

Figure 1. Data source: The World Bank, http://datacatalog.worldbank.org.

Recent studies consistently suggest that the new generation of higher education graduates in Western and East Asian countries have trouble finding jobs and are confronted with underemployment or unemployment. Figure 2 presents the growing trend of youth unemployment in East Asia. Furthermore, higher education graduates may secure employment by accepting low-paying jobs requiring low education levels, thereby leading to the so-called “over-qualification” problem in the labor market. The effect of over-qualification and massification may lead to high unemployment rates, low monthly salary, and precarious work. The over-supply of higher education graduates reveals not only the “broken promise” of human capital theory, which posited that more investment in higher education would enhance social mobility, but also uncovers the cruel reality confronted by young university graduates of the mismatch of available jobs with their qualifications. Increasingly, unhappy youth are on the rise, complaining about precarious work.

Figure 2. Data source: National Bureau of Statistics of China, http://www.stats.gov.cn; Hong Kong SAR Census and Statistics Department, http://www.censtatd.gov.hk/sc; National Statistics, ROC (Taiwan), http://www.stat.gov.tw; National Statistical Office of South Korea, http://kostat.go.kr; Statistics Bureau of Japan, http://www.stat.go.jp.

Taking Japan, South Korea, Hong Kong, Taiwan and Mainland China as examples, the unemployment rate of college graduates has fluctuated from 2004 to 2020 (see Figure 2). Note that the trend towards massifying higher education has failed to address the youth unemployment issue in East Asian areas, which shows no signs of significantly abating. That is, graduates face difficulty in finding jobs even though they have obtained higher education degrees. Japan performed well in reducing unemployment rates amongst young graduates, although there was a minor rebound after 2018. Therefore, how higher education graduates can obtain decent job opportunities has become a common concern throughout East Asia.

Policy implications

This article has shown how the massification of higher education has adversely affected graduate employment, especially with the unfolding mismatch between graduate skill sets and changing labor market needs. The present research shows the importance of matching university graduates’ knowledge and skill sets with the needs of the labor market. The skills that young graduates acquire from higher education institutions do not necessarily translate into employability in the labor market. Moreover, some supply-side approaches tend to lay responsibility on higher education institutions to enhance graduates’ skills. However, well-developed and well-executed employability provisions may not necessarily equate with graduates’ actual employment outcomes. Hence, higher education institutions must critically assess their curricula to cater to the rapid socio-economic changes.

The intensification of graduate unemployment and underemployment, combined with the “broken promise” made by human capital theory, has given rise to discontent among young people. Recent studies frequently show self-reported unhappiness among young people across East Asia. Similarly, unhappy youth in the United Kingdom and Europe have forced governments in the West to recognize the “crisis of young people.” Governments across different parts of the globe should carefully handle the intensified intergenerational conflicts, particularly when a growing number of unhappy young individuals see the root of the problem as generational inequalities in education, work, housing and welfare.

The paper is a revised and adapted version of the author’s recent paper: Mok, KH, Ke, GG and Tian, Z (2022) “Massification and privatisation of higher education in East Asia: Critical reflections on graduate employment from sociological and political economic perspectives,” In: Brown, P et al (eds) International Handbook for Graduate Employment. Cheltenham: Edward Elgar. (in press).

Ka Ho Mok, Lingnan University, Hong Kong <kahomok@ln.edu.hk>

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