As we approach the new academic year: Overeducation in Israel

The new academic year is approaching and this is a good opportunity to discuss higher education in Israel and the phenomenon of overeducation. Much has been written about the advantages of higher education. It encourages innovation and employment, improves productivity in a way that strengthens economic growth, and it improves the earning capabilities of the individual worker. In addition, research has found that higher education leads to greater political awareness and higher rates of participation in elections, lower levels of crime and poverty, higher employment levels, less reliance on government assistance, and is even associated with better health.

Even so, with the considerable increase in higher education rates over the past decades, and despite the many positive aspects of higher education, there are incidences of “overeducation,” where an individual’s level of education is above that required for his employment. This means that individual resources and those invested by the public for educational attainment are not used efficiently in the labor market, thus lessening the individual and social return on the investment.

Research by Haim Bleikh examines the phenomenon of overeducation among those with an academic degree who are employed in occupations that do not require their level of education. The research finds that between 2017 and 2019, 17.5% of workers with an academic degree were classified as being overeducated for their jobs. The most common explanation for the phenomenon is related to the individual’s field of study; the phenomenon is more common among individuals who studied humanities and social sciences, while those who studied law, medicine, mathematics, statistics, and computer sciences are less likely to find themselves working in positions requiring lower levels of education than those  they possess. The Taub Center research looks at additional explanations for overeducation in the Israeli context.
It is important to note that, in general and relative to other developed countries, a high share of Israelis have higher degrees. It is likely that this figure will rise even more with the greater enrollment rates at institutions of higher education in the wake of the Covid pandemic.

So what are the reasons found in the study for overeducation?

Language proficiency: It is well known that having good language skills contribute to better integration into society. What is more, language skills are critical in determining entrance into the labor market and optimal integration into it. Thus, those with higher levels of language proficiency have a greater chance of finding work that is commensurate with their skill and education level and that compensates them well, while those with poor proficiency have a higher chance of working in an occupation that does not require a higher degree and are likely to be categorized as overeducated. In Israel, language skills are especially important since the country is constantly absorbing new immigrants. The research found a high share of overeducation among young immigrants (ages 25-44) who were educated abroad and who have poor Hebrew language skills. This finding is significant for this younger generation of immigrants (as opposed to older ones) since they face many years in the work place.

Age and work place tenure: As a rule, overeducation is more common among younger people at the beginning of their careers since they do not yet have relevant occupational experience. For most, the match between higher education and occupation increases with time and with the accumulation of occupational experience. Nevertheless, the research shows that workers who change their place of employment after the age of 45 have a higher chance of finding themselves overeducated for the job. The main reasons are that their skills may be old or outdated due to the rapid advances of technology, a lack of expertise in areas required in today’s labor market, and a lack of appropriate skills. An additional factor that may contribute to the phenomenon is ageism, that is, job discrimination on the basis of age.

Spatial (geographic) flexibility: Bleikh’s research is the first in Israel to examine the relationship between overeducation and commuting. On the whole, employment opportunities are often quite dependent on the individual’s geographic flexibility, that is, the willingness to either move residence or spend more time commuting. The data show that the greater the flexibility, the lower the overeducation levels. Accessibility to a private car for job seekers contributes to their mobility and allows a job search over a greater radius, and thus contributes to a better fit between education levels and the job requirements.

In summary, language proficiency, age, and geographic limitations, like residing far from employment centers and a lack of mobility, are likely to push educated employees to accept employment that does not require their level of education. The Covid crisis closed the skies and the plans of many young Israelis to travel, pushing them to begin their higher education studies earlier than they may have otherwise. Despite the implicit advantages – increased productivity and greater employment prospects for many young people – this is likely to widen the phenomenon of overeducation in Israel in the coming years.