Graduate Labor Market and Overeducation

Growing numbers of higher education graduates and persistent demand for further education in the population lead to concerns about mismatch between jobs requirements and workforce qualifications, both in the sense of overqualification and sometimes also underqualification. This paper deals with the overeducation of graduates because the proportion of graduates in the workforce has risen in almost all developed countries (including the Czech Republic) over the last 20-30 years. There seems to be conflict in public policies that while numbers of enrolled students at universities and consequently numbers of graduates are rising, there could be shortage of graduate level jobs in the future. First part of the paper deals with various methods that are used to measure required level of education for the job. Next part is overview of labor market theories (searching and matching, human capital theory, assignment theory etc.) which can be used for interpretation of overeducation. Results of this research are important for both higher education policy makers and management of universities especially in time when public budgets from which public universities are mostly financed, are under pressure.