A large matched employer-employee data set on the Portuguese economy is used to analyse gross job creation and job destruction for university graduates, compared to other groups of workers. Standard measures of gross job flows are computed, and variance decomposition is used to check whether idiosyncratic shocks or aggregate and sectoral shocks can account for the time variation in gross job flows, for schooling groups separately. Results indicate that the market for university graduates has expanded much more than that for undergraduates, and that idiosyncratic shocks are more relevant driving job flows for university graduates than for nongraduates. No support is therefore found for the pessimistic view that states that the expansion of higher education may have gone too far.

This study was prepared under the project The demand for University degrees and the transition from University to the labor market, funded by Fundação para a Ciência e a Tecnologia (contract PRAXIS/P/ECO/13014/1998). We are grateful to the Ministry of Employment, Department of Statistics, for access to the dataset Quadros de Pessoal and to Vítor Andrade from newspaper Expresso for the data on announced job offers. Ana Cardoso gratefully acknowledges the support of the Australian National University, Research School of Social Sciences, Economics Program, where part of this paper was written. Ana Lima provided competent research assistance on this project.

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