40% of Graduates are Overqualified

A new government report reveals that up to 40% of recent graduates in the country risk running into the frustrating situation of being overqualified for their jobs.


More specifically, the report by the Office of the Parliamentary Budget Officer (PBO) estimates that, depending on the level of education, the proportion of workers aged 25 to 34 with a university degree who are overqualified for their job is on the rise since the early 1990s and has reached 40% in 2014. Meanwhile, the proportion of people that are “sufficiently qualified” is falling and stands at just under 55%.

The PBO analysis also found that the rate of graduates whose employment corresponds to their educational level has dropped. The report is a kind of warning that these figures may have real consequences on the labour market.


Multiple consequences

“There are costs associated with an increase in the number of overqualified workers,” notes the budgetary watchdog. “These workers could face reduced job satisfaction and commitment to their work, which would have the effect of increasing the turnover rate for employers.”

In addition, studies are expensive. University graduates sometimes pay double the price in renouncing a working income and years of experience to achieve the level of education required for the positions in the field of their choice.

Since 1991, over-qualification of young Canadian graduates rose by 32%. In 2014, 582,000 people were considered overqualified, 795,000 were identified as sufficiently qualified and 77,000 of them were unemployed.

Also according to this analysis, during the same period, the proportion of graduates in positions that matched their training decreased from 62% to 55%.

It also found that college graduates have fared better in recent years – their over-qualification rate decreased from 37% in 2006 to 34% last year. The proportion of recent college graduates who have held positions corresponding to their level of education reached 50% in 2014, against 45% in 1998.

The report notes that the methodology took into account the level of education as the sole measure of qualification and did not include other factors such as experience or the demand for labour.

The budgetary office document also stressed that a Statistics Canada report released last year noted that 60% of recent graduates considered overqualified were concentrated in just three fields of study: business management and public administration; social and behavioural sciences; and humanities.


What will the Liberals do?

During the last federal election campaign, the Liberals promised to spend about $1.5 billion over four years to help some 125,000 young people to find work.

Shortly after winning a majority mandate in the October elections, they said their plan included an exemption from employment insurance premium for a period of 12 months to any employer who would give full-time work to a person aged 18 to 24 over the next three years.


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