Four out of every 10 young workers with a university degree are overqualified for their job in the years after graduation, Canada's Parliamentary Budget Officer has warned.
The PBO's wide-ranging report released Thursday included an analysis of the labour market. One of the report's findings suggested that while recent grads have had trouble finding the first job of their career for decades, the problem may be getting worse.
Last year, 40 per cent of university graduates aged 25-34 were overqualified for their job. Five years ago, that percentage was only 36 per cent. In 1991, it hit a low of 32 per cent, or less than one out of every three university graduates.
The problem is bigger than that, because those young workers spent money, time, and resources to get those qualifications.
"Many university graduates forgo labour market earnings and experience to attain credentials for a position in their field of choice," the PBO said.
That's a problem not just for those workers, but also for the broader economy, the PBO warns.
"There are costs associated with a rising number of overqualified workers," the budget watchdog said. "These workers may face lower levels of job satisfaction and attachment, which could increase turnover rates for employers."
Across the country in 2014, the PBO found there were 582,000 people in who were overqualified for their current role. By contrast, 795,000 were "rightfully qualified" while 77,000 were unemployed.
Citing a previous report from Statistics Canada on the same topic, the PBO singled out three fields where overqualification is a particular problem:
- business, management and public administration
- social and behavioural sciences and law
The picture among college grads, meanwhile, was slightly better. The report found college graduates have fared better in recent years — their overqualification rate dropped to 34 per cent last year from 37 per cent in 2006. The proportion of recent college grads who held positions that matched their education level reached 50 per cent in 2014, up from 45 per cent in 1998.