Evaluating the Impact of Educational Expansion on the Occupational Status of Youth

This paper exploits the remarkable increase in the average educational attainment of Australian youth during the 1980's to evaluate the role of education in labour market performance. Rather than focus on the impact of schooling on wages, however, we examine changes in the occupational distribution of recent labour market entrants. The evidence indicates that the educational expansion appears to move all individuals up the educational ladder without altering their relative position. The results indicate that while the second cohort obtained substantially more education than the first cohort the occupational distribution of the two cohorts were almost identical. Furthermore, there was no evidence that the increased education counterbalanced changes in the structure of labour demand or manifested itself in higher wages.