'Education inflation' hurts Swedes' job prospects

We live in a time when digitalization, international competition, and a shift towards a more knowledge-intensive economy are creating a great surge in global well-being. But these same factors are also making it increasingly difficult for those with lower academic credentials to find employment. The problem is particularly vivid in a country like Sweden, where high taxes, generous public benefits and high effective minimum wages create significant barriers to entering the labour market.

So it comes as no surprise that both the politicians on both the right and the left are so concerned with how to create a more inclusive job market. Both sides also embrace the idea that more education is the key for finding work. But although qualitative education is a great aid for individuals, more education does not necessarily translate into more success in the labour market.

So how can it be that more education doesn't mean better employment prospects? Let me explain.

Not long ago, many Swedes began their working lives around the age of 20. Today, however, it is more common for workers in Sweden to enter the labour market when they are around 28. An important reason is that Swedes nowadays spend many more years educating themselves. In general, of course, an academic degree is a great door opener in the modern labour market. Not only can one gain valuable knowledge through continued education, but a diploma is also a vital signalling mechanism to potential employers. Since companies and organizations often lack perfect information about individual job seekers, they often base hiring decisions on who has the highest level of education. In many cases, employers reason that the person with an academic degree is smarter and harder-working than someone with a lower level education.

At the same time, it is clear that many young Swedes who are today studying certain disciplines within the social sciences such as gender or media theory, or perhaps art history or similar courses struggle to find qualified work after graduation. This situation is even worse if the graduates have a degree from one of Sweden's newly formed university colleges (högskolor), which tend to lack the same quality of education found at more established universities. Many newly-minted graduates thus feel an understandable frustration over having spent a great deal of time educating themselves, only to find out that, as they approach the age of 30, their knowledge is not highly desired in the labour market.

What we have in Sweden, I believe, could be termed as a bad case of inflation in education. We spend more and more time studying, but the rewards of doing so aren't always higher when compared to times past when education programmes more often more compressed (and sometimes more focused). And while Swedes seem to delay the onset of their careers by spending an increasing number of years at university, I would argue that the issue of education inflation starts even earlier, before future job seekers even finish their secondary education programmes.

In Sweden, upper-secondary education (gymnasiet, Sweden's equivalent to high school) is voluntary. Still, almost all Swedes study at this level. And this is most likely a very good thing in a society where specialized skills are critical for finding work in an increasingly knowledge-based labour market. However, the upper-secondary school system in Sweden went through a major reform in the beginning of the 1990s. Before the reform, young Swedes who had completed grade nine, the final year of compulsory education, either entered gymnasiet to study on one of a few academically-oriented tracks that often led to university; or they enrolled in one of a variety of vocational programmes.

The vocational programmes were two years long and focused mainly on teaching practical, job-related skills such as how to repair a car, be an electrician, or work on a manufacturing assembly line. In the years leading up to the reform, almost half of Swedish students enrolled in vocational programmes. In general, students with lower grades and those coming from families where the parents had lower levels of education chose the vocational programs. The situation is similar today.

After the 1990s reform, however, the vocational programmes were prolonged from two to three years, and included considerably more general knowledge content in addition to vocation-specific skills. The changes were motivated by the idea that today's working life requires more general knowledge, and that a broader education would enable students who would have previously simply learned to be mechanics to instead strive for a spot at a top university. Such goals are very admirable. But unfortunately the reality seems to be that the more generalized, longer, programmes leave students with less valuable skills than they might have acquired otherwise. At least this is the conclusion of a recently published study by Caroline Hall with Sweden's Institute of Evaluation of Labour Market and Education Policy (IFAU).

In the study, entitled "Does more general education reduce the risk of future unemployment?", Hall notes that the nationwide reforms were preceded by a pilot programme conducted between 1988 and 1993 "in which longer and more general vocational tracks were tried out in several municipalities". She explains that her study found "no evidence that having attended a longer and more general programme reduced the risk of experiencing unemployment during the 2008–2010 recession". In fact, amongst students with low grades from compulsory school, "attending a pilot programme seems instead to have led to an increased risk of unemployment" (my own emphasis). According to Hall, the effect is strongest amongst male students, and likely is explained by the increased drop out rate which resulted from the transition from vocational to general education.

The results of the IFAU study may seem quite technical. But the bottom line is that Sweden used to have a school system where those who were inclined to work in technical and vocational fields such as driving a lorry, working in construction, or hairdressing, would enrol in focused programmes where they learned the skills necessary for that line of work. Politicians decided that more general education would be a better idea, in order to increase the students' chances to reach higher-tier jobs. But instead, the reform led to decreased opportunities of finding work, particularly amongst male students with lower grades who were evidently stimulated more by vocational than general training.

The idea that more education does not always translate to more success is controversial on both sides of the political spectrum in Sweden. On the left, the Social Democrats are striving to even out class differences by having a society where nearly everyone has an academic degree. On the right, both the Liberals (Folkpartiet) and Moderates place a high value on the concept of an academic, liberal arts-oriented education.

Don't get me wrong. I am all for education. But it is important to remember that the quality of education, as well as how much the content is suited to the employment potential associated with the actual individuals who participate in the education, is what matters; not simply how long we decide to stay in school and accumulate additional degrees. More young people in Sweden would likely find work if the country's politicians were to accept this notion.

Nima Sanandaji, a Swedish writer of Kurdish origin with a PhD in polymer technology, has written numerous books and reports about subjects such as integration, entrepreneurship, and women's career opportunities. His forthcoming book, published by Sweden's Reforminstitutet think tank, is entitled Krympande eller växande städer ('Shrinking or growing cities'). He is a regular contributor to The Local.