Forecasting demand for higher education graduates in Australia

The Problem: Addressing Australia’s Long-Term Skills Mismatch

Australia’s labour market is undergoing profound transformation, driven by an ageing population, industry shifts towards knowledge-intensive sectors, and deepening skill requirements across occupations. Despite increased higher education participation, a misalignment between qualification supply and evolving job market demands risks undermining economic productivity and national growth objectives.

The Challenge: Understanding Gaps by Qualification, Industry, and Demographic

While headline data suggests aggregate qualification surpluses in some years, Oxford Economics identified persistent shortages across key industries—especially education, professional services, and public administration—and within critical fields such as teaching and health. Furthermore, gender imbalances and structural ‘leakage’ of skilled migrants away from high-need industries complicate workforce planning. Traditional models were insufficient to account for such nuanced mismatches.

The Solution: Oxford Economics’ Scenario-Based Modelling Framework

Oxford Economics Australia applied a dynamic stock-and-flow modelling approach to forecast higher education demand and supply out to 2052. The analysis considered five core demand drivers (employment growth, skills deepening, retirements, job churn, and migration), and included:

• Annual gross and net demand forecasts for higher education qualifications
• Supply projections from domestic and international graduates
• Gap analysis by industry and field of study
• Scenario analysis (e.g., Disruptive Transition, Mobile Workforce) to capture policy and migration uncertainties
• Postgraduate qualification trends by occupation and sector

This robust, forward-looking analysis supported the Accord Taskforce with detailed evidence to shape national targets and long-term reforms.