The effect of education on underemployment and employment among young workers in Spain

What is it about?

The objective of this paper is to identify the effect of education on young workers’ time-related underemployment as well as analysing whether education has been a defence mechanism against the recent crisis. Especially relevant is the analysis regarding field of study, which has not been addressed in the underemployment literature. Using data from the Spanish Labour Force Survey 2006–2014, our results indicate that underemployment is negatively related to education level for each period and tertiary education has smoothed the negative effect of the recession. Moreover, those specialisations that provide students with specific and work-oriented skills (sciences, technology and health) help workers avoid underemployment and enable them to handle the recession better. Conversely, more generally oriented fields (education, and arts and humanities) are associated with a higher probability of underemployment. Similar patterns have been found regarding unemployment, indicating education plays a similar role in both working time shortages

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Why is it important?

It is important because our reseach indicates that although nowadays the main problem to solve is still unemployment, the design of public policies should take into account underemployment in the future. Since this handicap especially affects young workers, it should also be considered when designing specific policies oriented to improve their situation. Moreover, as some fields of study are associated with a weaker position in labour market, even at university level, it should be important to reconsider the skills that students acquire when they choose them, and try to bring them closer to labour market requirements. Additionally, we consider that it is relevant to offer continuous student-guidance, especially at secondary education, to provide young people with wider information on labour market prospects associated with different educational programmes. Furthermore, initiatives dealing with career advisors are also recommended. It is also crucial to continue promoting a positive image and encouraging studies of sciences, technology, engineering and mathematics (STEM), as the European Union recommends. These fields of study show a higher demand in the workplace and may allow workers to obtain better outcomes in employment and underemployment, as the results in this paper demonstrate.