InequalitiesinHigherEducation
andtheStructureoftheLabourMarket
PercyMoleke
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This paper looks at the inequities in higher education and their consequencesin
thelabourmarketforpeoplewithhighereducation.Theinequalitiesinthetypeand
sourceofhumancapitalacquiredareoftenoverlooked,anditisarguedherethatthey
perpetuateinequalitiesobservedinthelabourmarket.Inequitiesinacquiredhuman
capitaleventuallyinfluenceeducationalattainment,whichinturninfluenceslabour
marketprospects.Thisisreflectedintheselectionorsiftingofthepotentialemployees
inthelabourmarket.Thosewithlongeryearsofschoolinghavebetterprospectsin
thelabourmarket.Butalsoofsignificanceisthetypeofqualificationacquiredduring
schooling. Qualification differences translate into different types of skills acquired
– a major indicator of employability. These differences are increasingly accounting
forthecontinuingracialdisparitiesinthelabourmarket,particularlyinthecontext
of the growing demand for skilled labour. Whereas demand-side factors such as
discriminationintermsofphysicalappearance,i.e.raceandorgender,stillinfluence
employmentinSouthAfrica,thereisevidencethattheirimpactisdeclining.
The paper is part of the research on the employment experiences of university
graduates in South Africa. The research is based on a sample of 2 672 university
graduatesinSouthAfricawhoobtainedtheirqualificationsbetween1990and1998
acrossallfieldsofstudy.Thestudy–amailsurvey–wasconductedbetween1999
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3
InequalitiesinHigherEducationandtheStructureoftheLabourMarket
and 2000. It is by far the most comprehensive tracer study of university graduates
everconductedinthecountry.Themainresearchdealswithvariousissuesrelatingto
thelabourmarketexperiencesofgraduates,eg.thetimeittooktofindthefirstjob,
period of unemployment, sector of employment, mobility between sectors (sectors
definedbroadlyasprivate,publicorself-employed),relationshipbetweenstudiesand
jobheld,furtherstudiescontemplatedandintentionstomoveabroad.
Education and the labour market prospects The occupational segregations
andinequalitiesinthe SouthAfrican labour market arearesultoftwophenomena
andwhentheydotheirentryleveljobsdonotnecessarilyrequiretheyearsofschooling
theypossess.Theystartatthebottomofthejobladderandhavetoprovethemselves
inthelabourmarkettoreachhigherincomelevels.Acombinationoftheirpotential
andtrainingwilldeterminetheirprogressionuptheladder.Aswillbeseeninthenext
section,thefieldofstudy,whichsignalsthetypeofskillsacquiredthrougheducation,
playsasignificantroleinemployabilityofuniversitygraduatesinthiscase.
PercyMoleke
Free download from www.hsrcpress.ac.za
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3
InequalitiesinHigherEducationandtheStructureoftheLabourMarket
Itisalsoacknowledgedthateducationisnottheonlyfactorthataccountsforinequities
inthelabourmarket.Thereisevidencethatthecorrelationbetweenschoolingandearnings
isweakerforsomesegmentsofthepopulationthanforothers(Keswell&Poswell2002).
There are differencesin thelabour market in terms of income and occupational status
acrossworkerswithsimilarobservablecharacteristics,eg.humancapitalandexperience,
butwithdifferentphysicalappearances,eg.raceand/orgender.Thesedifferencesarein
mostinstancestheresultofeconomicdiscrimination.Discriminationimpliesthatequally
productivegroupsdonotreceivesimilarrecognitionandcompensationfortheirproductive
characteristics.Whereasdiscriminationinthelabourmarketstillexistsandaccountsfor
someof the inequities,its effectis apparently declining. Van derBerg (2001) analysed
theimpactofqualityofschoolingoninequalitiesandarguedthattheresidualearnings
differentialsattributabletolabourmarketdiscriminationmightbesmallerthanthoughtif
cognisanceistakenofthelargedifferentialsineducationquality.Hefurtherarguedthat
labourmarketracediscriminationhasdeclinedasacauseofinequalitycomparedtoother
factorssuchaseducation,location,andfamilysizeandcomposition.
Variouslabourlaws,policiesandinitiativeshavebeenputinplacetoaddressthe
inequities in the labour market and in the education sector. In the labour market,
affirmative action laws and skills development laws have been enforced. The
Employment Equity Act (1998) seeks to ensure that people with equal observable
Despitetheobservedsignificantincreasesinthenumberofseniorcertificateholders
inthepastdecade,theproportionoflearnerswhoactuallysitfortheexamremains
low.Thequalityoftheseniorcertificateexamalsocontinuestobeofconcern.The
largemajorityoflearnersstillopttowritetheseniorcertificateexamonthestandard
graderatherthanonthehighergrade.Consequently,theproportionofthosepassing
with endorsement – which is a requirement for admission to universities – and in
mathematicsandscience,remainslow.Itisestimatedthatoftheaverageof460000
learnerswhosatforthesenior certificate exam between 2000and2002, only 14%
enteredpublichighereducation(universitiesandtechnikons).Itisfurtherestimated
that about 37% of these candidates who sat for senior certificate exams failed and
15% dropped out (Subotzky 2003). The proportion of those obtaining a senior
certificatepassinmathematicsandscienceisevenlower.Theproportionoflearners
whopasstheseniorcertificateexamwithendorsementconstitutesasignificantinflow
into higher education institutions, particularly universities. Although technikons
also require senior certificate endorsement, they do enrol a significant proportion
of students without a senior certificate endorsement, and a number of university
departmentsalsomakeconcessionsanddothesame.
Theimprovementsobservedwithregardtoseniorcertificatepassratesarereflected
in increases in enrolment rates in higher education. Enrolment rates of Africans
increasedto60%in2002(provisionalfigures)from29%in1988comparedtowhites
whoseenrolmentratesdeclinedfrom58%to28%duringthesameperiod(Subotzky
2003). However, enrolmentpatternsby fieldofstudy stillshowa biastowardsthe
humanities and arts relative to other fields. For example, in 2000, university and
technikonenrolmentsshowthat50%ofthoseenrolledwereinthehumanitiesand
social sciences, while science, engineering and technology, and business, commerce
andmanagementscienceshad26%and24%enrolmentsrespectively.Table1below
indicatesthatthehumanities and socialsciencesgraduatescontinueto constitutea
higherproportionofthosewhograduatefromuniversitiescomparedtootherfields
of study. Also of concern is the fact that many students either drop out of higher
educationwhileotherstakelongertoobtaintheirqualification.Thechallengeisto
Fieldofstudy Africans Coloureds Indians Whites Total
Humanities 25,4 38,1 27,5 41,1 31,4
Businessandcommerce 40,0 27,2 27,6 20,6 32,0
SET 34,6 34,7 44,9 38,3 36,6
Total 100,0 100,0 100,0 100,0 100,0
(citedfromCosser2004)
Notes:
1 Datafor2000arenotavailablefortheUniversityofNorthWest.
2 TotalsherearelowerthaninTable2astheyarebasedondifferentdataavailableatthetime.Variousestimatesof
enrolmentsmadeatdifferenttimesproducedslightlydifferentconclusions,basedontheavailabledataatthetime.
TheDoEfiguresareconstantlyrevised.
GraduateprospectsThosewhomanagetoobtainahighereducationqualification
have a better chance in the labour market than those who do not. A skill bias is
clearlyevidentwhere,despitethehighunemploymentrateinthegeneralpopulation,
the unemployment rate of individuals with higher education qualifications is
relatively low. However, not all of these people are successfully and satisfactorily
absorbed.Highereducationqualificationsdonotnecessarilytranslateintoimproved
job prospects, although one is more likely to have better job prospects with such
qualificationsthanwithoutthem.
The inequalities in educationare inextricablylinked tothe labourmarket structure.
Thisstructuredeterminestheexpectationsthathighereducationgraduateshaveasjob-
seekers. Inequalities in higher education, namely differentiation between and within
various institutions and between and within various disciplines, are directly linked to
the differentiation between various occupations in the labour market. The clustering
of graduates (mostly Africans) in the humanities and social sciences fields perpetuates
the segmentation of the labour market as it was when previously racially determined.
Graduates in these fields of study have poor labour market outcomes. They are thus
relegatedtoinferiorpositionsinthelabourmarket,withlowereconomicprospectsand
littlechanceofmobilityineithertheinternalorexternallabourmarket.
Employment The results of the tracer study used in this paper attest to the low
Between
7&12
months
%
Between
1&2
years
%
Morethan2
years
%
Total
%
Naturalsciences 55,0 38,8 3,8 2,1 0,4 100
Engineering 77,2 18,3 3,0 1,0 0,5 100
Agriculture 61,6 31,4 5,8 1,2 0,0 100
Medicalsciences 79,3 18,5 2,2 0,0 0,0 100
Humanities
andarts
46,8 33,1 8,5 7,3 4,2 100
Education 57,0 33,8 3,9 4,4 0,9 100
Law 49,6 30,2 8,6 7,2 4,1 100
EMS* 65,4 23,3 6,2 3,7 4,3 100
Total 59,5 28,4 5,9 4,2 2,0 100
*EMS:Economicandmanagementsciences
In a labour market marked by disparities and inequities, factors such as race and
gender can be expected to play a significant role in employability. With respect to
race,althoughAfricanswereconcentratedinfieldsofstudywithpooreremployment
prospects,acomparisonwithinthestudyfieldsindicatedthattheirwhitecounterparts
hadbetter prospects.Forexample,white graduates constituted ahigher proportion
Medicalsciences 46,0 65,7 32,5 91,2
Humanitiesandarts 53,6 38,7 33,3 56,4
Education 71,4 49,3 28,6 75,0
Law 36,4 26,8 51,6 69,6
EMS* 53,5 37,5 42,2 74,8
Total 47,6 43,0 42,2 70,4
*EMS:Economicandmanagementsciences
Gender,ontheotherhand,seemedtoshowinsignificantdifferences.Althoughahigher
proportionofmenwereabsorbedintothelabourmarketmorequicklythanwomen,a
significantnumberofwomenwereabsorbedfairlyquickly.Itwasonlyinthehumanities
andartsandinlawwherelessthan50%ofthewomenfoundemploymentimmediately,
althoughinthehumanitiesandartsthemenhadasimilarexperience(Table5).
Table5:Periodbeforefindingemployment,bygender
Fieldof
study
Immediately Between
1&6
months
Between
7&12
months
Between
1&2
years
Morethan
2
years
Male Female Male Female Male Female Male Female Male Female
Natural
sciences
lawgraduatesfromHBUsandfromHWUshaddifferentlabourmarketexperiences
– 27% of HBU graduates found employment immediately compared to 67,5% of
their HWU counterparts. In economic and management sciences, the figures were
38,5%forHBUsand73,5%forHWUsrespectively.
Table6belowclearlyshowsthedisadvantageexperiencedbystudentsfromHBUs.
HigherproportionsofstudentsfromHWUsareabsorbedinthelabourmarketfairly
quickly(withinsixmonthsofgraduating)whereasthosefromHBUstakelongerto
findemployment.Itislikelythatinstitutionsserveasasignalinthelabourmarket
in terms of which graduates from HWUs are assumed to have characteristics that
correlatewithhigherperformanceinthelabourmarket,comparedtograduatesfrom
HBUs.Inthecontextofaskillsshortage,thisconstitutesasubstantialwasteinthe
highereducationsysteminsofarasitserveslabourmarketneedsforbothjob-seeker
andtheeconomy.
Table6:Periodbeforefindingemployment,byfieldofstudyandinstitutionattended
Fieldofstudy Immediately Between
1&6months
Between
7&12months
Between
1&2
years
Morethan
2
years
HBU
%
HWU
%
HBU
%
PercyMoleke
9
InequalitiesinHigherEducationandtheStructureoftheLabourMarket
LevelsatwhichgraduatesfunctioninthelabourmarketNaturally,itwould
beexpectedthatgraduateswouldholdjobscommensuratewiththeirstudies.These
jobs would generally fall within the professional level and above. While in all race
groups there were more graduates in professional jobs, whites made upthe highest
proportion (23,6%) of those in managerial positions, followed by Asians (19,6%),
Africans(10,8%)andcoloureds(10,6%)(Table7).
Table7:Leveloffunction,byrace
Leveloffunction Asian African Coloured White Other
Managerial 19,6 10,8 10,6 23,6 21,4
Supervisory 6,3 7,7 8,1 4,4 7,1
Professional/Technical 63,9 59,9 55,0 57,2 67,9
Administrative 5,1 13,1 16,3 10,4
Operator 0,6 3,8 3,1 0,8 3,6
Trainee 4,4 4,6 6,9 3,5
Total 100,0 100,0 100,0 100,0 100,0
Itcouldbeexpectedthattheperiodspentinthelabourmarketwouldheavilyinfluence
the level atwhich graduates function.This would beespecially so forhigher levels of
employment such as management. An investigation of those who indicated that they
werefunctioningatmanagementlevelandthenumberofyearstheyhadworkeddidnot
revealanydifferencesthat mightaccountformorewhiteandAsiangraduatesbeingin
management compared to theirAfrican and colouredcounterparts. The proportionof
whiteandAsiangraduateswithineachcategoryofnumberofyearsworkedwasnotashigh
asthatofotherracegroupsatthetimeofthesurvey(Table8).
Table8:Numberofyearsworkedbythoseinmanagement,byrace
Numberofyearsworked
Asian African Coloured White
0–5years
Technical
%
Admini-
strative
%
Operator
%
Trainee
%
Publicsector
Asian 8,8 5,9 79,4 2,9 1,5 1,5
Black 10,3 8,2 63,8 11,6 2,9 3,2
Coloured 11,0 9,9 58,2 9,9 3,3 7,7
White 10,2 5,1 71,5 9,5 3,6
Privatesector
Asian 27,5 7,2 47,8 8,7 8,7
Black 9,8 6,5 42,4 21,7 7,6 12,0
Coloured 11,3 6,5 46,8 25,8 3,2 6,5
White 27,2 4,4 51,1 12,1 1,2 4,0
Self-employed
Asian 26,3 5,3 68,4
Black 38,5 46,2 7,7 7,7
Coloured 100,0
White 39,1 1,8 52,7 4,1 1,2 1,2
90.0
80.0
70.0
60.0
50.0
40.0
employment.Themovementbetweenthepublicandprivatesectorwasmuchmore
significant.Thepublicsectorisanimportantfirstemployer,particularlyforAfrican
graduates.Otherracegroupstendtofindsubsequentjobsintheprivatesector,while
Africangraduatestendtoremaininpublicsectoremployment.Thepublicsectoris
cruciallyimportantforAfricangraduates–76,7%oftheAfricangraduatessurveyed
found their first job in the public sector. This proportion rose to 82% of those
reportingontheircurrentjob(compareTable10andTable11).
Table10:Firstjobbysector,populationgroupandfieldofstudy
Race
Natural
sciences
Engi-
neering
Agri-
culture
Medical
sciences
Humanities
andarts
Edu-
cation
Law EMS* Total
Asian
Public 60,0 37,5 100,0 55,1 62,1 100,0 9,1 23,3 47,0
Private 40,0 62,5 42,9 34,5 90,9 74,4 51,2
Self-employed 2,0 3,4 2,3 1,8
African
Public 79,5 33,3 86,7 65,7 82,6 89,4 51,2 54,1 76,7
Private 20,5 66,7 13,3 31,4 17,4 10,6 48,8 44,7 23,0
Self-employed 2,9 1,2 0,3
Agri-
culture
Medical
sciences
Humanities
andarts
Edu-
cation
Law EMS* Total
Asian
Public 50,0 28,6 40,0 70,4 80,0 18,2 34,9 43,9
Private 44,4 71,4 100,0 40,0 22,2 45,5 60,5 43,9
Self-employed 5,6 20,0 7,4 20,0 36,4 4,7 12,1
African
Public 70,6 62,5 100,0 68,6 86,5 96,1 64,9 64,0 82,0
Private 29,4 37,5 14,3 11,9 3,9 27,0 34,9 15,7
Self-employed 17,1 1,6 8,1 1,2 2,4
Coloured
Public 54,5 50,0 62,9 100,0 41,7 46,7 57,1
Private 40,9 100,0 41,7 35,7 33,3 53,3 39,1
Self-employed 4,5 8,3 1,4 25,0 3,7
White
Public 35,9 19,6 26,8 35,2 38,2 61,9 24,6 16,4 29,0
Private 56,9 69,8 47,9 46,9 50,8 22,2 59,4 74,5 59,0
Self-employed 7,2 10,6 25,4 17,9 11,0 15,9 15,9 9,1 12,0
*EMS:Economicandmanagementsciences
Table12:Hypotheticalre-enrolment,byfieldofstudy
Fieldofstudy Samecourse Differentcourse Notenter
highereducation
Total
accordingly, various measures and initiatives have been introduced to redress the
situation. However, they are not sufficient to eliminate disparities in the labour
marketbasedonraceastheyprimarilyaddressthedemand-sidesourcesofinequities.
Thecontinuingdisparitiespointtoaneedtolookintotheroleofsupplyfactorsin
thephenomenon.Differencesinhumancapitalacquiredaregainingprominencein
accountingfortheracialdisparitiesinthelabourmarket.
Field of study is the major determinant of employability for those with higher
education qualifications. Those in fields of study that lead to a profession and
those whose fields of study are perceived positively by potential employers tend
to find employment quicker. The authorities have endeavoured to improve the
participationofpreviouslydisadvantagedindividualsinfieldsthatwillpreparethem
forprofessionaljobsalignedtolabourmarketneeds.Itis,however,notgoodenough
toholdahighereducationqualification–thetypeandqualityofthequalificationis
evenmoreimportant.
Race continues to play a role in employability in South Africa, irrespective of
thefieldofstudy.Even withinthesamefieldofstudy,whitegraduateshavebetter
prospects than their African counterparts. However, the impact of race seems to
be minimal when all other factors are taken into account. Of particular interest
is the role played by the institution attended. Students from HBUs tend to have
lower employment prospects and to take longer to find employment compared to
students from HWUs. Institutional characteristics partly explain these differences.
For example, HBUs generally produce graduates in the humanities and arts whose
labourmarketoutcomesarecomparativelypoor(thisisnotuniquetoSouthAfrica).
ThelargemajorityofthesegraduatesareAfrican.Hence,tosomeextent,itwouldbe
expectedthattheseinstitutionswouldshowlowerlevelsofsuccesswithregardtothe
employabilityoftheirgraduates.However,thereareunexplaineddifferencesaswell.
Irrespectiveoffieldofstudy,raceorgender,studentsfromHWUsseemtohavemore
successinthelabourmarket.Apossibleexplanationofthesedifferencesmaylieinthe
differingqualityofeducationintheseinstitutions,whetherperceivedorreal.
Differences were also noted in sector of employment,revealing a divide along racial
shouldalsoensurethatsectionsofthepopulationarenotleftbehindbecauseoflack
ofappropriateskillsandqualifications.
Endnote
1 Employmentimmediatelyinthisstudyisdefinedasfindingajob/employmentimmediatelyafterobtaininga
degree.Thisimpliesthatnounemploymentwasexperiencedbythesegraduates.
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14
PercyMoleke
15
InequalitiesinHigherEducationandtheStructureoftheLabourMarket
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