Taub Center and the National Students’ Union launch a new, one-of-a-kind project:
Degree is complete, now what?
In the past few years, Taub Center researchers have been looking at different aspects of the Israeli labor market to identify the problems and failures that hinder labor productivity and growth. One of the main findings of their research is the significant lack of congruence between the characteristics of human capital and the labor market needs: the distribution of fields of study selected by students in higher education does not align with the distribution of professions that the market requires. The result is damaging to productivity and growth, and leads to a widening of income inequality between the different sectors.
In order to address this issue, the Taub Center and the National Students’ Union are launching a project that is the first of its kind: a survey on wages and employment as they relate to academic degrees. The survey is expected to shed light on the relationship between higher education and the labor market in Israel.
“Study hard and you will succeed.” We have said it for years, and yet this statement does not necessarily ring true in many cases. Despite the high rate of degree holders in Israel, the workforce is characterized by a significant lack of congruence between the composition of human capital and the needs of the labor market.
In their research on productivity gaps, Taub Center researchers Dr. Eitan Regev and Gilad Brand (2015) looked at the “Other business services” sector in Israel, which is made up of, among others, professions such as lawyers, accountants, managers and clerks. In Israel, this sector is double the size of the parallel sector in other OECD countries. About one-quarter of the workers in the business sector are employed in this sector, compared to only one-eighth in the OECD, and this has had a major effect on the productivity gap between them.
Put simply, Israel has far too many lawyers, accountants, managers and clerks, and this excess comes at the expense of other, more productive industries.
The composition of academic professions also has a major impact on the gender wage gap. In her study of the wage gaps between women and men (2016), Taub Center researcher Hadas Fuchs found that the share of women among all students in technological fields was and remains low at only 20-30%.
This fact, and the choice of fields of study that later provide lower paying occupational options, are the core reasons for the hourly wage gap between women and men. In an additional study from 2015, Brand and Regev show that the Israeli labor market is becoming a dual labor market, with little or no movement of skilled workers between different sectors.
In light of the growing polarization between academia and the labor market, it is increasingly important to match the composition of human capital to the needs of the economy. When the fields of study in higher education and the needs of the labor market do not align, the economy has a hard time adjusting, and the result is damaging to productivity and growth, which contributes to a widening of wage gaps between sectors.
In order to address this problem and to give future students better guidance based on the experience of today’s graduates, the Taub Center and the National Students’ Union are launching this groundbreaking project to map employment patterns among the various fields of academic study.
A questionnaire has been distributed to recent graduates to assess their integration into the labor market and the match between their studies and their employment. The questionnaire examines the relevance of their academic education to their professional skill-set, ability to find employment, earning ability, and professional prospects.
The purpose of the survey is to draw data from graduates’ practical experience that will make professional study choices more relevant to the labor market, and to pass these findings on to future students as they decide on their academic paths. The goal is to give them essential information about the labor market early on in their academic decision making process, and, hopefully, to bring about a better match between academic studies and labor market needs.
This pilot project has the potential to have a significant positive impact on labor productivity in and growth of the Israeli economy, to the benefit of all.
For details, or to arrange an interview, please contact Anat Sela-Koren, Director of Marketing, Communications and Government Relations, 050 690 9749, or Reut Matzo, publicist for the National Students’ Union, 054 442 8978.
The Taub Center for Social Policy Studies in Israel, headed by Prof. Avi Weiss, is an independent, non-partisan institution for socioeconomic research based in Jerusalem. The Center provides decision makers, as well as the public in general, with a big picture perspective on economic and social areas. The Center’s interdisciplinary Policy Programs – comprising leading academic and policy making experts – as well as the Center’s professional staff conduct research and provide policy recommendations in the key socioeconomic issues confronting the State.