In order to establish the reasons for the relationship between bachelor degree and unemployment/underemployment among the young graduates, the study will be based on the following hypothesis.
Null hypothesis: Wage inequality is responsible for graduate role incompatibility with the requirements of the labour markets.
Alternative hypothesis: Wage inequality is responsible for graduate role incompatibility with the requirements of the labour markets.
Applicable social concepts
Social theories and terminology
Wage inequality is the imbalance between the skills possessed by an individual and the pay for a specific labour service.Several factors are associated with wage inequality. For instance, open economy, competition, unemployment, imbalance in demand-supply of labour results in wages in equality.
Therefore, the rigidities and inefficiencies accompanying labour market that are applied within the legal minimal wage often reduce formal employment’s attractiveness, especially for the graduates who end up in low paying jobs that meet the minimum wage as part of the work mismatch challenge (Calderon & Sorenson, 2014). The implication of wage inequality and work mismatch is assumed to be responsible for the high graduate unemployment/underemployment.
Since bachelor degree graduates are trained to work in the primary labour market, they sometimes end up in the secondary labour market. In the primary labour market, jobs are well paid, there are good work environment conditions, job security and stability of employment is certain, formal and equitable work process is guaranteed, and certain advancement structures exist (Jacoby & Goldsmith, 1998).
On the other hand, the secondary labour market is characterised by jobs that attract low wages, dismal working conditions, employment structure is variable, and they posses few opportunities for advancement (Rose, 2013). Graduates may be caught in a trap should they be immersed in the secondary job market, as in sometimes the case.
Value of the social research
The findings of the social research will be significant in establishing the possible causes of underemployment of bachelor degree graduate in the labour market. The relevant authorities may use the findings of the research to introduce a job role-pay policy to correct the current imbalance.
Practical implications of the inquiry
The study will not be a magic bullet in understanding the relationship between wage inequality and level of education among the young bachelor degree graduates. It will only provide structures that must be combined with the goals to address the wage inequality and underemployment concerns.
According to Al-Harthi, (2011), the private sector faces several challenges in implementing the balance between level of education and the wages to be paid. To begin with, the labour cost increases when more is paid to a graduate employee as opposed to the unskilled workers; this is because the graduate has to be paid higher salaries and social security benefits than the unskilled worker. Therefore, the main formula for wage distribution in the private labour market depends on the roles assigned (Al-Harthi, 2011).
Al-Thobyany and Murshed (2007) compared the labour market and higher education in terms of comparability. The author established that the greatest challenge with integrating higher education qualification to wage earnings is to spot the apposite wage-role structure the can justified within the constraints in the labour market (Al-Thobyany & Murshed, 2007). The evidences support the primary hypothesis since they both indicate that wage inequality is responsible for graduate role incompatibility with the requirements of the labour markets.
Possible biases and alternative interpretation
In the first evidence, the study was related to Egypt and Oman labour markets. The dynamics in this market is not universal in other labour markets.
The findings could also be interpreted to mean that the results role-wage imbalance is not present in the public labour market. In the second evidence, the constraints in the labour market are not related to the specific group of study, which is the bachelor degree graduate. Besides, the findings could be misinterpreted to mean that there are not other factors responsible for the wage inequality.
The evidence provided confirms the research hypothesis that wage inequality is responsible for graduate role incompatibility with the requirements of the labour markets. The two evidences are convincing to draw firm conclusions on the hypothesis.
Al-Harthi, K. (2011). University student perceptions of the relationship between university education and the labour market in Egypt and Oman. Prospects, 3(41), 535–551.
Al-Thobyany, T., & Murshed, H. (2007). The university and the labour market in Saudi Arabia: an exploration of structural mismatches in Jeddah city. London, UK: University of Essex.
Calderon, V. J., & Sorenson, S. (2014). Americans Say College Degree Leads to a Better Life. Gallup Poll Briefing, 3(2), 33-41.
Jacoby, S., & Goldsmith, P. (1998). Education, Skill, and Wage Inequality. Challenge (05775132), 41(6), 88-120.
Rose, S. (2013). The Value of a College Degree. Change: The Magazine of Higher Learning, 45(6), 24-32.