Study shows gaps between level of education and jobs among Israelis

"Over-education is a situation in which the number of years of an individual’s formal schooling is greater than required for performing the work," the Bank of Israel said.

By ZACHARY KEYSER
Dizengoff Center, 2019. (photo credit: MARC ISRAEL SELLEM)
Dizengoff Center, 2019.
(photo credit: MARC ISRAEL SELLEM)
The Bank of Israel released a study focusing on the "mismatch" between the major subjects of Israeli degree-holders and their chosen occupation once entering the workforce.
Around 40% of Israeli degree-holders suffer from a disparagement between their level of education and their current occupation. They are over-educated to work in their positions, they had studied more than the average number of years among those employed in that occupation and their formal schooling is greater than required for performing the work.
"Over-education is a situation in which the number of years of an individual’s formal schooling is greater than required for performing the work. Another phenomenon, related to over-education, is a mismatch between an individual's occupation and the subject in which they majored," The Bank of Israel said in a statement. "Both phenomena have a negative impact on the employee, the employer and the economy. The accelerated expansion of colleges since the 1990s, which contributed to a marked increase in the number of higher-education graduates in Israel, likely increased the magnitude of those phenomena."
"Over-education" itself can be correlated directly with gross annual wage, according to the study. In addition, the increase in the number of colleges worldwide since the 1990s has increased the number of higher education graduates in Israel, leading to an excess of Israeli workers with basic and advanced college degrees, which in turn raises the annual wage disparagement.
In Israel, the gross annual wage is around 17% less than that of workers whose level of schooling is in line with their occupation - meaning that across the board, almost all Israelis take a pay cut in their positions, facing an average decrease of about 5-6% compared to what their education warrants, regardless of gender.
Bachelor's degree holders from public colleges face the largest disparagement when comparing education and occupation, with a 14% over-education rate. Graduates of private colleges fare better, with only about 8-9% over-education, while graduates of state universities are only 3-6% over-educated when reaching the workforce. However, the study notes that regarding high-school graduates, those who attend public college receive higher relative wages and have less chance of being over-educated for their work.
Regarding specific occupations – highly skilled professions (such as accounting, law, computer science and engineering), graduates of subjects with strong labor market demand, public sector employees, and those with experience in the labor market – all have a lower probability of being "over-educated" and "mismatched" than others in the first years after graduation.
Researchers used data on all bachelor’s degree graduates born between 1978 and 1985 – which included demographic, social and economic background characteristics collected in 2008, their “Bagrut” matriculation exam results, the academic fields they studied and their occupations as well as wage levels – in order to arrive at their conclusions.


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