Qualification Profiles in Australia – A general mismatch with many workers holding qualifications that ‘exceed’ the skill requirements for their occupation

Changes in the qualification profiles of workers is one indicator of changes in the supply and demand for education and training. Using Australian Census data on highest qualification held (which may understate the incidence of VET qualifications if they were obtained after completing higher education) this project analyses how tertiary qualification profiles in occupations changed between 2006 and 2016. Data from the 2015 Survey of Qualifications and Work, conducted by the Australian Bureau of Statistics (ABS), are also used to examine how well qualifications match workers’ occupations.

A specific focus of this analysis is on changes in the proportions of workers with vocational education and training (VET) qualifications.

The analysis finds that, over the last decade, the overall workforce has become more educated: the proportion of workers holding VET or higher education qualifications has increased, while the numbers and proportion of workers without post-school qualifications has correspondingly decreased.

The study also revealed a general mismatch in terms of the skill level (and relevance) of the highest qualifications held by workers and the level of skill required for the job, with many more workers holding qualifications that ‘exceed’ the skill requirements for their occupation. While this may indicate underutilisation of skills and therefore sub-optimal returns on public and private investment in education and training, the study does not consider the broader social and economic benefits of having a more highly educated and skilled workforce.

As the study noted, changes in the mix of VET and higher education qualified workers in the workforce can be influenced by changes to industry regulatory requirements, credentialism and supply-side factors rather than occupational demand per se. In particular, supply-side influences such as higher education funding policies, combined with young people preferencing higher education over VET, are key factors in the changing distribution of the qualification profiles within the workforce.

Key messages

• The supply of qualified workers rose sharply between 2006 and 2016, with around two- thirds of all workers in 2016 holding a post-school qualification compared with just over half (55.5%) in 2006.
• The largest increase in post-school qualifications was for higher education qualifications (33.5%), followed by diplomas (19.6%) and VET certificates (5.3%).
• Younger workers are more likely than older workers to have higher education qualifications, while older workers are more likely to have VET qualifications.
• All major occupational groups experienced a rise in the proportion of higher education- qualified workers.
• Occupations with the largest shifts out of VET qualifications were ambulance officers and paramedics, dental hygienists, technicians and therapists, and medical imaging professionals, with the share of VET-qualified workers in those occupations declining over the 10 years.
• VET is playing an increasingly important role in providing formal skills development for several occupations that have historically been dominated by workers without post- school qualifications, such as truck drivers, storepersons, kitchenhands and labourers.
• In the largest 20 occupations, a key driver of the growth in the supply and demand for higher education qualifications has been the ongoing professionalisation of occupations such as primary school teachers, registered nurses and accountants.
• Workers holding a VET certificate reported the closest match between the qualification undertaken and relevance to their job (90.3%).
• Technical and trades workers with VET certificates and professional workers with diplomas were more likely than other occupational groups to be working in the same field of study as their highest qualification level (82.4% and 72.6% respectively).

Chosen excerpts by Job Market Monitor. Read the whole story at  The dynamics of qualifications: implications for VET