New research shows graduate employment on the rise

Graduate employment has risen in South Africa in the past 15 years, despite the country’s exceptionally high unemployment rate. While a third of people are jobless, graduate unemployment has declined to under 5%.

New research by a leading think-tank, the Johannesburg-based Centre for Development and Enterprise (CDE), has discredited a public perception that more and more people with university degrees are not being absorbed by the job market.

“The myth that graduates in general, and black graduates in particular, are struggling to find work needs to be put to bed,” said the research published this month.

The study was conducted by Professor Servaas van der Berg and Hendrik van Broekhuizen of the department of economics at Stellenbosch University.

At 35%, South Africa’s unemployment rate is considered one of the highest in the world.

The research said that degree holders in the labour market grew from 463,000 in 1995 to 1.1 million in 2011. Less than 5% of graduates were jobless in 2011, despite the financial crisis.

“We were not surprised by these results,” Van der Berg, a researcher of socio-economic policy, told University World News.

“It’s a short-term phenomenon that graduates fail to find work after graduation while South African employers, both public and private, desperately need skilled and educated workers.”

A 2006 Development Policy Research Unit study suggested that unemployment for ‘graduates’ – including all tertiary-educated individuals – had risen from 6% in 1995 to 9.7% in 2005.

That data had sown confusion over the number of unemployed people holding degrees, certificates or diplomas, said Van der Berg. The CDE study updated and compared older reports and data for 2005-11 that had not previously been reported.

The CDE report said that most of the growth in graduate employment had been in the private sector, with the proportion of graduates working in the public sector falling from 50% in 1995 to about 35% in 2011.

It noted that white students make up a declining share of graduates leaving university each year. For instance, in 2011 they comprised 45% of the total population of graduates, down from 56% in 1995 – the year after first democratic elections.

Black and coloured (mixed-race) graduates now account for half of all graduates in the work force, their number having tripled from 200,000 in 1995 to 600,000 in 2011.

“The claim that business is reluctant to hire black graduates needs to be re-examined,” according to the research. Although black graduates were more likely to be unemployed than white graduates, the tripling in the number of black graduates had been accompanied by a falling rather than a rising level of unemployment.

The research suggested that the gap in employment could be explained largely by differences in the quality of degrees offered by different universities.

It concluded that low graduate unemployment in South Africa showed a greater need for skilled workers.

“The big issue that comes with misunderstanding the statistics is wrong policy decisions,” Van der Berg told University Wold News. For instance, should South Africa welcome Zimbabwean teachers, not forgetting circumstances in their country, or accept skilled people from other countries?

Allowing skills flow was necessary for growing the economy, he added.

Low graduate unemployment also illustrated the importance employers attach to a university degree when hiring, so policies should support the expansion of university education.

“If it were true, for example, that graduates struggle to find work despite the skills shortage, one could conclude that resources allocated to universities are largely wasted,” said the research.

However, the report admitted that its figures were silent about universities’ efficiency and effectiveness in producing graduates whose skills match those demanded by industry.

“The research reinforces that when there is a skills crisis, graduates will be absorbed into the system,” Antony Altbeker, CDE research and programme director, told University World News.

“It is very depressing for people to be going to a university knowing that they will struggle to get jobs. But research like this, which shows they are getting work though we can’t tell what type of work, is promising,” he added.

But will the research change anything?

Altbeker said the CDE hoped the results would change the public debate about graduate unemployment.

“Perhaps it’s too optimistic to say one research [study] will change things,” Van der Berg argued. "But if one research [study] can show that we need engineers, and another reveals town planners are in short supply, the research will add to the evidence that shows authorities the importance of developing our own skills."