One reason for the massive expansions of universities over the past few decades is that recent cohorts of students have been taking refuge there from a labour market that is not kind to young workers in terms of opportunity, remuneration, or respect. The youth labour market collapsed in the 1980s in developed countries around the world,[i] and many governments have done a poor job of re-establishing it. Rather than addressing the demand side of youth labour—jobs themselves—many governments have elected to address the supply side through policies directed at producing more educated workers, presumably misled by human capital theory. As the underemployment research shows, this strategy has not worked out as it should have, but instead of altering the course as it became increasingly obvious that these policies were not working for a large segment of the youth population, governments have resorted to increasing the rhetoric about the need for highly educated labour. This has produced an unacknowledged triple-whammy hindering the integration of young people into the labour force: (1) good jobs are scarce for them, (2) those who can afford it have to pay for more education in hopes of getting a good job, and (3) many find that there is not a high demand even for their university credentials.
Readers might ask how it is that the research upon which these policies have been based would not have revealed these problems, redirecting policy efforts to more effective solutions for helping young people integrate into the labour force. After all, aren’t current policies in advanced democracies evidence based? Well, it turns out that the research exposing the problems with these policies has been largely ignored in favour of evidence that verifies the initial conceptions formed by a human capital theory—a ‘confirmation bias.’ This non-confirmatory research has largely come from peer-reviewed academic journals. However, governments have heavily relied on research produced by their own researchers and ‘shadow research communities’ that have been constrained by the parameters set out by governments’ belief in economic theories like the human capital model. As a result, this research has merely confirmed the preconceptions of policy-makers, leading them further and further off course, perseverating rather than adapting.
In this case, we thus see a classic example of misdirected research on a grand scale.
The Canadian government’s own internal research into and thus knowledge of university graduate underemployment dates back at least to the 1980s,[ii] and periodic reports have been released since.[iii] Yet, as recently as 2006, we can find statements in government-sponsored reports such as the following published by Human Resources and Social Development Canada (HRSDC):
The proportion of university-educated individuals in lower-skilled occupations has risen from 12% in 1990 to about 17% in 2005, providing some evidence that there may be signs of oversupply of university graduates. Although admittedly, this is an area that requires further research. (Emphases added)[iv]
‘May be signs … requires further research’! Incredibly, none of the many previous government studies are even mentioned by this report. Instead, the report takes a Pollyannic view of the future labour market that is possible only through the selective use of evidence. To the extent that politicians read and believe these types of reports, the scourge of human capital theory continues.
It is difficult to say just what the federal government’s position is on youth underemployment, given the buried, ignored, and contradictory reports. It certainly must be an ‘elephant in the room’ among those who advise politicians. What we can say is that no action has been taken to alleviate it. To the contrary, the policy appears to be to continue to send young people to universities with empty promises of bright futures for all, thereby exacerbating the problem.
The HRSDC published a report in 2005, titled HRSDC Policy Research and Survey Plan: Directions for the next three years, after it was realigned and renamed (from Human Resources Development Canada, in 2003). This rebranded department defined itself as
now primarily a research, policy and program design department, [whose] knowledge base is one of our most important assets for achieving our mandate. Therefore, it is important to have a Knowledge Management Strategy (KMS) in place, there must be a systematic approach to research planning across the department; there must be effective mechanisms for connecting with departmental expertise; and research products need to be disseminated to all interested groups so that they are used effectively. (p. 2)
This report laid out some 45 studies that were underway or to be undertaken to ensure that the ‘quality of human capital … [be sustained to maintain] Canada’s comparatively high levels of effort as measured by expenditures and certificates and degrees granted, and outcomes, in terms of directly measured skills and abilities’ (p. 20). This report is infused with the logic and language of human capital theory, with the term ‘human capital’ used thirty-two times in the discussion leading up to the specifications of the studies to be undertaken, and fifty-one more times in delineating these studies. The public will be interested to know that each of these studies involves tens of thousands of dollars, with the overall research initiative costing taxpayers into the millions.
One of these proposed studies was titled ‘Can a supply of highly-qualified labour create its own demand? (p. 58), described as follows:
Canada has tended to take a ‘production function’ view of potential growth, based on the premise that by increasing the supply of human capital, either via quantity or via quality (as in educational attainment and skills) the economy will be able to grow faster and macroeconomic policy (largely via the setting of monetary conditions) will engineer the demand growth consistent with that faster potential growth.
This project is to consider whether a ‘supply will lead to its own demand’ approach is appropriate, either in the short run or the longer run. In particular, the project should identify the transmission mechanisms by which increasing the supply of more highly qualified human resources helps stimulate demand for those resources, and whether the supply can be stimulated to a point of oversupply and consequent labour market imbalances, possibly reducing the return on that higher investment in human capital.
The forty-five studies were tendered to sources outside HRSDC through ‘requests for proposals’ (RFPs). The RFP for ‘Can a supply of highly-qualified labour create its own demand?’[v] was issued in July of 2006, with part of the justification for requesting papers on this topic specified as follows:
Between 1976 and 2000 … the post secondary education (PSE) participation rate in Canada jumped from 15% to 30%. More Canadians are developing higher levels of formal human capital. Given the importance of identifying the role that human capital accumulation plays in economic development, it is also imperative to understand the microeconomic relationship between the demand for labour and the supply of human capital.
This research should establish whether it is possible for human capital accumulation to exceed demand, therefore resulting in a waste of valuable resources. If human capital accumulation can exceed demand, then it is possible that job-education skill mismatches may occur. The microeconomic theory of supply and demand suggests that if human capital accumulation can exceed demand then individuals may be overqualified for their jobs, implying an underutilization of their existing skills and talents. A high proportion of qualified graduates raises questions at a broad level regarding the education system, the availability of jobs and the structure of the labour market. If widespread underemployment does exist, it may decrease the attractiveness of careers in a given discipline, causing current graduates to seek other employment opportunities, and deterring future generations from entering particular fields of study.
That’s right: in spite of human capital theory driving Canadian education policy for decades, in addition to the forty-four other papers, this government department is seeking opinion about whether the policy might be creating underemployment. As indicated above, there is an extensive literature on this issue, some of it produced by the Canadian government itself, indicating that it is creating underemployment, so why is the question still being asked as if it is new concern? One answer comes from the statement in the RFP, following this quoted material, that ‘HRSD is aware that the research proposed above may be addressed from either a microeconomic or a macro-economic perspective.’ In other words, anyone applying to write a paper for them had to adopt an economic framework, presumably accepting the logic and language of human capital theory. Apparently, sociological perspectives on the topic were not welcome, so the whole literature on credentialism was out of bounds, and thus presumably will not make it to policy-makers’ desks when these reports are written.
So goes the world of evidence-based policy in Canada, as least as it applies to higher education and its relation to the labour market. The major stakeholders here are fixated on a theory with limited validity; they think and speak in terms of its logic; and do not allow contradicting evidence to be considered in ways that would revise the theory and introduce new, more applicable ideas.
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[i] See Côté & Allahar, Critical Youth Studies: A Canadian Focus (Toronto: Pearson Education, 2005). The collapse of the youth labour market is undisputed among experts in the sociology of youth, and is common knowledge among the public, especially young people and their parents. As we see, however, many of those feeding the Canadian government with research to inform it youth and education polices appear obvious to it, blinded by the ideology they follow in their human-capital driven research.
[ii] See, for example, Nobert, L., McDowell, R., & Goulet, D. (1992). Profile of Higher Education in Canada – 1991 Edition. Ottawa: Department of the Secretary of the State of Canada.
[iii] Betts, J., Ferrall, C., and Finnie, R. (2000). The Transition to Work for Canadian University Graduates: Time to First Job, 1982–1990 (Analytic studies branch research paper series No.141). Ottawa: Statistics Canada.
[iv] Mario Lapointe, Kevin Dunn, Nicolas Tremblay-Côté, Louis-Philippe Bergeron, Luke Ignaczak. Looking-Ahead: A 10-Year Outlook for the Canadian Labour Market (2006-2015), Human Resources and Social Development Canada, Labour Market and Skills Forecasting and Analysis Unit, October, 2006, p. 27. The HRSDC does put the standard caveat on this publication that views expressed may not necessarily reflect those of the HRSDC.
[v] http://www.merx.com/English/Supplier_Menu.Asp?WCE=Show&TAB=1&State=7&id=121566&hcode=7FzlCQxAyXgV3nL8Rn4aZA== accessed July 19, 2006.