Australian workers feel over-skilled and over-educated

Almost half of Australia's workers (49.5 per cent) feel over-educated, meaning they have a higher level of education than they believe their job requires.

Additionally, about one in four (25.7 per cent) say their role doesn't stretch their skills and abilities.

Younger Australians are more likely to experience these education or skill mismatches, according to the latest Household, Income and Labour Dynamics in Australia (HILDA) Survey.

And it can impact their job and life satisfaction.

Young people are most affected

The HILDA Survey follows the lives of more than 17,000 Australians each year over the course of their lifetime, collecting information on many aspects of life in Australia, including household and family relationships, income and employment, health and education.

Drawing on data collected in 2024, the latest survey found young people are most likely to be over-educated and/or over-skilled.

Around 54.1 per cent of 18 to 24-year-olds believe they're too educated for their job, while 36.2 per cent say they're over-skilled.

Some of that may come down to younger Australians taking casual jobs while they finish school or university, holding more qualifications than the role needs.

This means they might be behind a retail counter or waiting tables, work with no bearing on their studies or the career they're aiming for.

And after graduating, younger Australians often take an entry-level job that isn't a perfect fit but gets a foot in the door.

Bored and disenchanted

The HILDA Survey found that workers who feel over-educated are less satisfied with a range of aspects of their job, including their work itself, their pay, their employment opportunities, and the job overall. They are also more likely to think about quitting.

This feeling goes beyond work, too. Workers who feel over-educated tend to feel more disenchanted with life generally.

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But it’s the over-skilled group that is perhaps the bigger worry, because the toll on job and life satisfaction runs deeper.

These findings suggest that boredom sets in when people can't use what they've got and their wellbeing suffers for it. Their job satisfaction can drop as they come to feel undervalued and underpaid for what they believe they're really worth.

That discontent doesn't stay at work, it can affect how they feel about life as a whole.

To counter this, we need to support younger Australians moving into jobs that match their education and skills as closely as possible.

And in a fast-changing labour market, we need to back lifelong learning, so people can renew their skills and keep pace as the world of work shifts.

A gap that keeps widening

One bright spot keeps emerging from the HILDA Survey. Australians are becoming better educated and women are driving much of the gain.

Well over half of women aged 25 to 44 now hold a university degree and in every age group under 65, women are better educated than men.

However, the HILDA Survey also shows men who don't finish Year 12 are falling further behind in the workforce.

In 2024, 48 per cent of women aged 25 to 44 without a Year 12 certificate were out of the workforce. The figure for men in the same age range was lower (22 per cent) but it has almost doubled since 2001, when it sat at 12 per cent.

The gap in labour force participation between Australia's most and least educated keeps widening.

Those who leave school without Year 12 face a tougher road: they're less likely to find full-time work, which narrows their own prospects and, over time, costs the wider economy too.

If this gap keeps growing, it becomes a serious problem for states and territories, economically and socially.

Given the rise in unemployment for men without Year 12, the question worth asking is whether our schools are serving boys well enough. And whether they leave young men ready for the labour market as it is now.

There's a related tension in education policy itself. Australia has spent years pushing to lift university enrolment, and that may have come at the expense of vocational training and the traditional trades.

Getting into university has become comparatively straightforward, but vocational training like a trade apprenticeship often depends on landing an employer first.

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So, young people on the vocational path may not have the same ready support.

Changing gender roles may explain some of the male employment decline, with potentially more men staying home to raise children while a better-educated partner works.

But the more important driver may be less comfortable: that these men can't find work because they left school early.

This distinction matters.

One is a choice freely made, while the other is a disadvantage, and the two call for very different responses.

If lower-educated people are being shut out of the workforce, then it's a problem we can't afford to ignore.