University Graduates and Work - Rationality of choice in European comparison

English summary

In this study I have described how university graduates regularly transfer from their studies to the beginning of their working careers. In addition to Finland, the other countries chosen for comparison are Norway, Germany, Austria, Netherlands, England, Italy and France. This study utilises quantitative survey data from twelve countries, which were collected as a part of a project called Graduate Employment in Europe. The target groups of this project were those graduates from European universities who had been in working life for ap-proximately four years at the time the survey was conducted, here named as new graduates.

 

The key variables that I have been used to describe the relationship between higher education and working life are gender, field of education, age at graduation, employment sector, professional position and country. According to the data, all these are essential factors when researching the transfer from higher education to work. They also have significant effects on graduates’ salaries four years after graduation. The variables in question, however, correlate with each other in multiple ways. New graduates’ transfer to working life or to the beginning of their careers cannot be described with great simplicity in any of the countries in question; in fact their personal qualities such as gender, experience and educational attainment intertwine in the varying and extent with the positions and careers the newly graduate have attained at the beginning of their careers.

 

Any examination of the relationship between education and work also calls for information on social mechanisms, which tie the factors plausibly together. Social mechanisms are descriptions and causative narratives of how things happen, work and relate to each other. They make it easier for the researcher to piece together the relationship between education and work and to interlink these interrelated phenomena into a coherent and consistent whole by building a bridge between description, explanation and theory, and thus make the explanations more sustainable and profound. In research on the relationship between education and work, social mechanisms can be understood as interpretive and intangible modelling of the actions of graduates transferring from education to working life, underlying the variables describing education and work and their contexts.

 

Within the context of the transfer from higher education to working life social mechanism, can be based on a hypothesis of new graduates’ conscious and rational actions. This assumption provides a general idea of the possible processes and social mechanisms underlying the variables at the individual level. According to the data, the transfer from education to working life among of European women and men can, thus, be described by a hypothesis of graduates’ conscious and rational actions towards education and work careers. In other words, it is rational for women to seek their way to public sector careers and educational fields dominated by women, as it is often for the men to keep to private sector careers and male-dominated fields, since in these positions their expectations of future careers have statistically significantly better chances of coming true than in fields and careers untypical to their gender.

 

After a few years in working life, both the expectations and contentment with educational choices are remarkably more significant for both women and men in a gender typical field and career than in untypical ones. Orientation towards certain types of educational fields for European women is justified by, for instance, reasons stemming from demands for combining family and work. Especially in Central European countries these circumstances are in many respects better as comes to public sector careers than ones in the private sector. Men, on the other hand, are typically expecting high salaries and career advancement to a greater extent than combining family and work. These kinds of characteristics of work are more likely to come true if choosing a career dominated by men and in the private sector.

 

Although highly educated women in many countries are more committed and bound to family obligations than men, their expectations of other aspects of work, such as good salaries and career advancement, do not significantly differ from men’s corresponding expectations. This finding underpins the idea of the salary and career being core points for young women and men in the process of deciding whether to seek their way to higher education or not. Since salaries and careers are also significant to highly educated women, one could expect it to be in many cases reasonable for them to pursue careers in fields dominated by men, where employment opportunities for advancement and well-paid private sector careers are better.

 

However, problems for women could derive from difficulties in achieving the same positions and salaries in male-dominated surroundings in spite of equivalent education and experience. According to the data, in a male-dominated private sector position circumstances refer to the fact that women and men have not always been treated equally at the beginning of their careers. For instance, in their own estimations on their salaries and possibilities to advance in their careers, the gap between women and men is at its widest particularly as concerns graduates in male-dominated private sector positions. Many other aspects expected and appreciated by women realised to a greater extent in more typically public sector careers, which makes them desirable career choices from women’s point of view.

 

In many cases transferring from higher education to working life is reduced to patterns typical of individuals with certain characteristics. Actors typically base their actions upon patterns that have proven to be profitable in certain circumstances for individuals with similar characteristics. Such aspects comprise, for example, employer’s preferences over employing women and men, or graduates from certain fields. Individuals are, indeed, directed to certain positions so that they make up large actor groups based on commonly shared features and circumstances when transferring from education to work. These individual, yet commonly shared features are combined in this process and convert into characteristics of various groups. It is reasonable to sum up the actions of rational individuals and convert them into the actions of groups, since there is a regular behavioural model based on their actions and choices.

 

In different countries, local characteristic models for operating and making choices are created as individuals use operation models tested by other fellow individuals in order to make their own decisions. What is consid-ered rational in different situations depends on the circumstances of the coun-try in question. In the context of graduates’ transfer to working life, this can refer to circumstantially bound rationality, which portrays how the reasonable and conscious actions of individuals are attached to each country’s character-istic context. The essential definitions of these social circumstances are, first and foremost, supply and demand for different kinds and levels of education, employers’ behaviour and fellow individuals’ actions, capacity, preferences and expectations. These are the principal terms of reference for possibilities, rights, demands and constraints constituting forms and levels of careers, payment and employment in different countries. All of them combined create a framework for the actions and choices of graduates when transferring from education to working life.

 

According to the data, the effect of gender on graduates’ initial salaries is mostly created while making choices concerning higher education and at the time of transformation to working life. This creates the greater part of the evident differences in salaries between newly graduated men and women. Differences between the initial salaries of women and men in different countries rest on differing numbers of female and male graduates being selected for certain educational fields and subsequently to the public and private sectors and entrepreneurship. The effects of the field of education as well as the effect of gender on the initial salaries in different countries is explained by the fact that graduates from various fields of education end up in varying proportions in he public and private sectors or as entrepreneurship. Therefore, the salaries of the graduates cannot straightforwardly be described merely by supply, as often is the case in human capital theory, but one must include the variables representing the demand for the workforce.

 

Today, gaining work experience during one’s studies is very common among higher education students and therefore many newly graduates already have experience of the labour market and working life. According to the data, however, work experience during the studies cannot statistically be seen to have a significant effect on new graduates’ initial salaries. Therefore, gaining work experience during studies would merely be a signal for employers of the graduates’ competence and suitability for certain positions, instead of being a resource creating a long-term and secure profit from the labour market. Work experience during one’s studies is relatively tightly connected with different kinds of working careers and the positions graduates have reached four years after their graduation. In many of the countries compared in this study, work experience in ones’ own field is first and foremost connected to in public sector employment and managerial positions in a way that those who have been 30 or older at time of the graduation have more often linked education and their careers seamlessly together than other graduates. In proportion younger and less experienced degree holders have more often leaned on market mechanisms when seeking employment.

 

Therefore, it is often rational for graduates to gain work experience already during their studies, since work experience is a core criterion for gaining a good vantage point at the beginning of their working careers. Benefits from gaining work experience during studies materialise by better opportunities for career progression through the fact that education thusly overlaps with work, and therefore periods between studying and working are not eating away the profits of education, consequently creating a problem, even if employers would interpret any gaps in the graduate’s working as a lack of competence or motivation. All work experience however is not equally appreciated in labour market or working life. The data clearly show how field-specific work experience has helped graduates to begin their careers smoothly, whereas generic work or life experience has not necessarily had a congruent effect. The least field specific work experience has also often lead the graduates to working careers less typical for other graduates from the same field.

 

Consequently, salaries in the fields of commerce and technology are generally perceived to be high. This is often simply explained by these fields opening doors to such paid work within in the private sector and advantageous initial careers, which can relatively fast lead to well-paid positions. In proportion, the averagely lower salaries earned by graduates in, for instance, the humanities or social sciences are caused by the of the fact that students from these fields more commonly transfer to public sector careers where career development is slower, and salaries at least in the beginning of one’s career lower than in private enterprises. A difference between educational fields and salaries is not, therefore, directly a question of competencies gained at university being more productive in one field than in another. If this was the case, salaries would be higher in the former. The mechanisms of defining salaries are substantially more complex, though.

 

As far as European graduates are concerned in, the tendency for initial salaries is that they tend to be lower in many fields in the public sector than in the private sector. Yet, it is the income of graduates entrepreneurs that varies the most in between fields. Entrepreneurship among graduates is simply understood through people acting consciously, rationally and practically in various situations, which means that they choose the appropriate means in each are. Graduates can be seen to set up as entrepreneurs in a situation where self-employment has been a feasible option, or when they have perceived a need to advertise their competence or obtain better profit for their education than it would have been possible by working for someone else. In this model of expedient and sensible operations, one crucial point is weighing up the possibilities and risks between paid work and entrepreneurship.

 

The most outstanding fact in the data is the positive bias towards en-trepreneurship especially amongst the humanities graduates. This can be ex-plained as an expedient way to, for instance, employ oneself and gain a decent profit for one’s education since unemployment, irregular employment and relatively low initial salaries may be more of a problem for humanities graduates than in many other fields. There may also have been a demand for different kinds of small entrepreneurs with experience in the humanities. Correspondingly, this also explains why, for example, business and engineering graduates have not in any of the countries been more eager to become entrepreneurs than other graduates, although one could expect entrepreneurship to be more typical in these fields. Entrepreneurship simply just has not been seen as an attractive means to build a career or to gain a better profit for one’s education in these fields, since in their domain there have already been enough suitable, well-paid and positions for graduates that will lead to high positions. In various countries entrepreneurship can be explained in the way as the high proportion of entrepreneurs in Italy; it is seen as a feasible option as, graduates usually simply want to employ themselves, and at the initial career phase there are typically more notable problems in Italy than in the other countries under comparison.

 

On the other hand, female graduates have not pursued to entrepreneurship at the beginning of their careers to a notably greater extent than their male counterparts, although they are often considered to have more reasons to do so as they are more likely to face problems in achieving a proper profit for their education. The data indicate a relatively transparent reason for why entrepreneurship does not interest female graduates: entrepreneurship does not usually guarantee a significantly better average income than in paid work. In that case it is not necessarily rational to bear the risks of entrepreneurship. On the other hand, female entrepreneurs’ expectations of careers, salaries and positions have materialised to a greater extent for those working in the private sector, and therefore entrepreneurship can be regarded as protecting European women from such a collision between one’s expectations and their real situation at work, typical especially to women working in the private sector. Male graduates who worked as entrepreneurs have not gained such profits from their entrepreneurship that would correspond to the risks involved in comparison with paid work.

 

In every country under comparison, however, there are educational fields in which entrepreneurship has guaranteed a higher than average profit to one’s education. Entrepreneurship is thus an opportunity for graduates to gain a profit for their education rising above the one they can gain in paid work. However, there are also fields in every country in which entrepreneurs have evidently fallen behind paid work as far as their salaries are concerned. The humanities are the most typical example of such a field. From a societal viewpoint the uncertainty of highly educated entrepreneurs’ income could turn into a problem if graduates and otherwise most talented workers chose paid work instead of entrepreneurship because of the income. In this case existing capital is merely circulated and redistributed instead of creating new capital, which could mean that the whole economic growth and progress could stagnate in the long term.

 

Indeed graduates are in themselves an essential force in creating new economy and activity in the society. The functioning of the economy relies greatly on their creativity. Equally it would be important to pay attention to how the entire body of graduates has a bearing on, for instance, how the transfer from education to working life is developing to or how the profits of education in different countries are evaluated when reviewing the relationship between education and work. In this study, I have described this process by drawing on the hypothesis of graduates’ rational, conscious and meaningful activity while transferring from education to working life. This hypothesis opens up a general picture of what the individual processes and social mechanisms behind the variables describing education and work may be. It offers such conformity that the examination and comparison of the relationship between education and work requires in order to avoid a solitary description of data and to involve more information on more general processes. It will help to understand the relationship between education and work and to connect these interrelated phenomena into a congruent whole that helps us understand and compare the interrelationships between education and work in different countries through the actions of graduates in an easy way.