Is mass higher education working? An update and a reflection on the sustainability of higher education expansion in Portugal

The appeal of HE expansion has been particularly significant in the case of Portugal, whose levels of qualification of the labour force have been historically low. Over the last two decades the country has experience a massive expansion of its higher education system and the numbers of students enrolled and rates of enrolment have multiplied more than four times. This paper focus on the sustainability of this trend of higher education (HE) expansion in Portugal and attempts to update and rebalance a debate that is too often carried out exclusively from a supply-side perspective. The paper develops an empirical framework which incorporates the diversity of jobs currently carried out by university graduates and their changing skill requirements but that also provides a useful benchmark to refer to growing expectations mismatches among graduates. Using a new typology of graduate-level jobs and staff logs data collected annually by the Portuguese Government for private sector employees, the paper analyses the increasing dispersion of graduates' relative earnings and relates this trend to the increasing diversification of their jobs. The paper also tests more directly the impact of over-education (relative to the graduate jobs' current skill requirements) and finds that the relative penalty associated with this condition has increased during the 1995-2005 period. The paper then questions the extent to which Portugal can continue to be portrayed as a straightforward success story regarding the massification of HE and considers the implications regarding political and social support for continuing expansion in the system.