Pathways to knowledge work

This study looks at how the occupational structure of the Australian labour market has evolved over recent years, and how individuals have fared in the process. Underlying aggregate-level change are tens of thousands of stories of individuals coping with adjustment: stories of young people deciding whether to continue their education and training beyond schooling, of mothers wanting to re-start their career after some years where it had been on hold, and of older people receiving redundancy notices and scouring job advertisements asking for skills they don't have.

How do we make sense of those stories, and detect the underlying factors which explain change and the paths that people have followed? This study takes an avowedly statistical approach to the matter, comprising two principal components. The first is an examination of changes in the occupational composition of the labour market between 1986 and 2001. The second is a retrospective investigation of the factors that enabled some individuals to find themselves working in 1997 in jobs that might be categorised as 'knowledge work'.

Knowledge work is the bridge between the two components. There has been ample discussion about the emergence of a knowledge economy, but its consequences for the world of work rarely form part of those discussions and, where they do, are put in relatively benign terms: a knowledge economy is constituted of knowledge workers (which must be a good thing).

The transition towards a knowledge economy is best seen as a further stage in the evolution of technological change, exemplified by the rapid diffusion of advanced information and communication technologies. As history has shown, the consequences of technical change for work are likely to be ambiguous. Putting it simply, the fact that more knowledge may now be incorporated in the production process and the delivery of services does not necessarily mean that more knowledge is required on the part of workers. Knowledge can be codified into a machine or piece of software, the application of which may require little in the way of cognitive skill. At the same time, others will be involved in research and development and the process of codification, undoubtedly tasks requiring a high level of knowledge and cognitive skill. In the first instance, therefore, the question of whether more or less knowledge was now required of workers had to be addressed.

Did knowledge work become more prevalent between 1986 and 2001?

Data were obtained on the occupational composition of employment in 1986 and 2001 from the Census. They show that employment grew most rapidly in professional jobs and in intermediate clerical, service and sales jobs, up by 534 000 and 480 000 respectively. Over the same period the number of tradespersons fell by 13 000 and there was very little growth in the number of advanced clerical and sales workers. These results are broadly consistent with those of other studies, which have been characterised as the 'hollowing out' of the middle of the pay and skill distributions of employment.

Given these changes, what can be said about whether knowledge work became more prevalent? There are two ways of tackling this question.

The first is by using an ordinal skill ranking of jobs, with five discrete levels of skill. Assigning employment to the appropriate level in both periods, it can be seen that the share of employment in the two highest skill categories rose considerably, that in the middle skill level fell substantially, and those in the two lower skill categories rose and fell by offsetting amounts. The overall effect has been an upward shift in the skill profile, mostly a result of a redistribution of the composition of employment in the upper skill levels-those generally requiring a post-school qualification at certificate III/IV level or better.

The second approach used was to measure whether there had been a rise or fall in cognitive skill levels. A reliable source was identified giving a cognitive skill score for specific occupations. By multiplying this score by the number of people employed in that job, then summing across all jobs and dividing by total employment, a measure of the average cognitive skill was obtained. The results of this analysis show that there was a very small rise in the average cognitive skill score between 1986 and 2001, less than 2%.

Both approaches to the question suggest that while there has certainly been a good deal of flux in the occupational structure of the Australian labour market, it would be difficult to characterise this as a move towards more knowledge work.

The real advantage of using the Census data, however, is not to replicate aggregate level studies, but to look in much finer detail at how the occupational structure of the labour market is changing.

Jobs on the rise and jobs in decline

Popular accounts of change place a great deal of emphasis on information technology, both in terms of job generation and essential skills for job aspirants. In so doing, they tend to overlook the everyday character of much paid work.

In 1986, the top three employing jobs in rank order were sales assistants, secretaries and personal assistants, and cleaners. In fact, 15 years later those same three jobs held exactly the same rank, collectively accounting for 860 000 jobs-roughly one in ten of all jobs held at that time. Computing professionals more than tripled in number from 41 000 in 1986 to 129 000 in 2001, but the number of sales assistants increased by 197 000 over the same period, more than double the number of new computing professionals.

Another way of identifying new job opportunities is to identify those occupations growing fastest. Occupations which grew rapidly in both absolute and percentage terms included computing professionals, project/program administrators, general clerks, and child-care and special-care workers.

Job growth was strongest in areas that disproportionately employed women and where the jobs in question were disproportionately part time, and was therefore relatively disadvantageous to men in full-time work. Among the 25 occupations which had grown fastest in absolute terms over the 15 years to 2001, 27% were held by men working full time, well below the 44% which prevailed across all jobs.

Many occupations saw declining numbers employed over the 15 years to 2001. While it was the case that jobs were lost across the entire skill spectrum, they were most heavily concentrated in the skilled trades where 26 separate trades saw a decline in employment numbers. This included toolmakers, welders, panel beaters, carpenters, bricklayers, butchers, shearers, and printers.

What are the underlying forces behind the changes?

It is not possible to adequately understand the dynamics of change by observing two points in time, but there is some consistency in what has happened across a range of fields to identify three different kinds of change which appear to have occurred.

First, in a number of fields jobs have become 'professionalised', reflecting growing sophistication in service delivery. The emblematic example here is nursing. The number of registered nurses rose by 26 000, while the number of enrolled nurses fell by 9000. Other examples are rising numbers of accountants, human resource professionals and library technicians, while the number of bookkeepers, personnel clerks and library assistants has declined or stagnated. In these latter areas, technological improvements have complemented the delivery of higher quality services.

Second, productivity gains due to technological improvement leads to the shedding of jobs. This is seen clearly in agriculture and mining where many occupations that are central to these industries saw a decline in employment numbers between 1986 and 2001. These ranged across skill levels. There are also specific occupations which are becoming obsolete due to technological improvements. Examples of this over the period are keyboard operators (due to the widespread take-up of the personal computer), switchboard operators (due to automated dialling systems) and typesetters (due to printing from camera-ready copy and other innovations).

Third, general productivity gains, in turn, generate new jobs which are best seen as the product of affluence-among the rapidly growing jobs have been dietitians, financial advisors, massage therapists, fitness instructors, travel agents, cleaners and waiters. These new jobs range across all skill levels.

It should be clear from these examples that the emergence of a knowledge economy has had considerable, but ambiguous, effects on the character of jobs undertaken in that economy.

How individuals fare over the life course

The other main aspect of the study was to look at the individual factors associated with attaining higher level jobs. Our source for doing so was the work and education histories of around 1700 employed people aged between 15 and 55 who were surveyed in 1997.

Around six in seven people had changed occupation between their first main job when they entered the labour market and their present job, and in doing so just over half had also changed broad skill ranking. Over the course of their working lives, 38% were when surveyed employed in a job with a higher skill ranking than when they started, and 16% were in a lower skill ranking. (While much of the upward move will be a result of upward movement associated with skills acquired with experience, the data source does not allow this to be quantified.) Older men were the most likely to have moved up the skill ranking, while a downward move was most common among younger men and older women.

Looking more specifically at 'knowledge work', which is defined here as occupations requiring an above-average level of cognitive skill, there are two broad paths to acquiring such a job-the first is to begin one's working life in this position, the other is to move into it. At the time of the survey, 59% of those working were identified as knowledge workers. This was made up of 37% who began their working lives in this group and remained there and 22% who moved into it.

Men were far more likely than women to commence their working careers as knowledge workers and remain there: 47% compared with 28%. The differential was considerably more marked for people who began work in the 1950s where there was a 34 percentage point difference in favour of men. Since then, it has progressively shrunk over each decade to be 9% among those who began work in the 1990s.

The most important determinant of whether a person began their working life in a knowledge job and stayed in such a position was education. Around three in five men with a post-school qualification did so, compared with three in ten of those who completed 12 years of schooling and two in ten who did not. For women, the major factor was whether they were degree qualified. All other women had a lower than average likelihood of commencing work as a knowledge worker. Only 3% of women who did not complete 12 years of school (and without post-school qualifications) started work as a knowledge worker and have remained there. This group also had the smallest flow into knowledge work during their working lives-just 16%.

In general, there was little association between people's background characteristics, their education and work experience and whether they moved into knowledge work (where they had not begun their working lives in this group). Older women were more likely to do so, which may be related to workforce withdrawal and re-entry after raising children, as the flow into knowledge work was highest for women with children beyond school age. This phenomenon may also be associated with some re-skilling, as women who attained post-school qualifications after labour market entry were more likely than others to move into a knowledge job.

Knowledge work and vocational education and training

In the 15 years up to 2001, changes to the occupational structure of the labour market generally worked against holders of vocational education and training (VET) qualifications. The bifurcation in expanding job opportunities by skill ranking meant that many of the middle-level skill jobs that might normally be filled by VET graduates were not available.

To be more specific, a very large number of skilled trades saw a decline in employment levels, so that overall the number of tradespersons fell, with job numbers 300 000 lower in 2001 than they would have been had job growth since 1986 kept pace with the overall average. This would have presented limited openings for either newly qualified apprentices or those wanting to pursue a career in one of the affected trades.

There would also have been diminishing opportunities for VET graduates in many of the fields which became 'professionalised'. Nursing provides a prime example here with the compositional shift away from enrolled nurses towards registered nurses. To work as an enrolled nurse generally requires completion of a vocational qualification compared with a university degree for registered nurses.

While a university degree provides the surest passport to attaining a knowledge job, it has also been the case that vocational qualifications generally improve the odds of doing so, more so for men than for women, and more so for those with a skilled rather than basic qualification. Among men with skilled vocational qualifications, 78% were working in a knowledge job in 1997, compared with 45% for women with a basic vocational qualification (which is below the all women figure of 50%).

There has been a fair level of skill 'wastage', in the sense of those with post-school qualifications never having the opportunity to deploy the skills acquired in a knowledge job. This has especially been the case for women, with 30% of those with a skilled vocational qualification and 48% with a basic vocational qualification never working in a knowledge job.

Over the last five years there has been a rapid expansion in the number of people participating in the VET system, whether through new apprenticeships or in technical and further education (TAFE) and equivalent courses. The question must be whether recent cohorts of VET graduates have been able to obtain work which takes full advantage of the skills they have acquired, or whether they too will experience skill wastage.