ROA publishes new report on developments in education and labor market

Lower expected economic growth leads to decline in employment growth

Economic growth in the coming years is lower due to declining exports of goods and lower consumption. This lower growth eventually translates into stagnation in employment growth. The inflow of bachelor graduates is high compared to mbo graduates, so the labor market prospects for mbo4 graduates in particular are relatively good. Higher prices, existing tightness and (geo)political changes will continue to cause uncertainty in the labor market in the coming years. These are the main findings of a new report "The labor market by education and occupation until 2028" by the Research Center for Education and the Labor Market (ROA) of Maastricht University.

Supply of mbo4 graduates lags behind demand

In the period from 2023 to 2028, more than 1.5 million graduates are expected to enter the labor market. Almost 60% of these graduates will come from higher education, and mainly from HBO. In the coming years, this will slowly lead to increasing bottlenecks in the supply of personnel for MBO4 graduates because most of the retiring labor force will be MBO-educated. So says the new ROA report.

Consequently, labor market projections for mbo4 graduates through 2028 are more favorable than for bachelor's graduates. In contrast, projections for master's graduates remain favorable. Research leader Jessie Bakens explains that "there is certainly 'skills-upgrading' where employed retirees are replaced by someone with a higher level of education, but theoretically trained bachelors are not always suited to the practically-oriented occupations for mbo4 graduates." This does not mean that bachelor graduates will become unemployed. "We expect that they will have a little more difficulty finding a suitable job and that the employment conditions will be disappointing compared to past years. In addition, you can also expect the wage gap between mbo4 graduates and bachelor and master graduates to narrow," Bakens said.

Structural bottlenecks in engineering, healthcare and education: increase supply and reduce demand

Despite the lower expected economic growth until 2028, the labor market will remain tight for technicians, care personnel and teaching staff in the coming years. This is despite growing numbers of graduates from those fields entering the labor market. Employers will continue to struggle to find suitable personnel for the positions of doctors, nurses, elementary school teachers, childcare workers, engineers, and lawyers. In contrast to these structural shortages, the labor market for many other occupations will widen. To solve the shortages of technicians, for example, personnel are already being recruited abroad, and many foreign students with degrees in engineering continue to work in the Netherlands after their studies. "But ways must also be sought to interest more Dutch youth in technical studies. The demand for technicians is not only high in the technical sector, but technical skills are also increasingly valued outside of engineering" says Bakens. Bakens points out that bottlenecks in education and healthcare arise mainly because "employers in healthcare and education are struggling to attract and retain staff."

Replacement demand

Until 2028, only 1 in 10 new jobs will be created through economic growth. The remaining 9 jobs will be freed up because employees must be replaced when they leave the labor market, temporarily or otherwise, because of (early) retirement, care duties, or exchanging their profession for another profession, among other things. Replacement demand thus accounts for 90% of job openings. The largest replacement demand is for workers with an MBO4 education, mainly because a large group of them retire. In absolute numbers, most replacement demand is expected for business and administrative occupations, and transportation and logistics occupations. "But the supply of graduates entering the labor market with an appropriate background to practice these occupations is more than sufficient," indicates Bakens. This is not true for all occupations, for example in the agricultural sector. "Although employment in the agricultural sector has been declining for years and is expected to continue to decline, there is still not enough supply of college graduates with the right papers to replace the aging labor force of horticulturists, arable and livestock farmers," Bakens said.

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