Page 724 - ISC PROCEEDINGS 21.4

development as the central mechanism through which higher education contributes to
graduate employability internationally (Abelha et al., 2020). However, the CareerEDGE
model does not explicitly address digital and AI-related competencies, which have
become essential in the contemporary labour market. A 2025 systematic literature review
reconceptualised graduate work readiness as a multidimensional construct comprising
“skills, knowledge, attitudes, personal qualities, workplace awareness, and digital
competencies.” It identified self-efficacy and agency capital as critical determinants.
Recent empirical work on digital skills training demonstrates that structured, context-
specific programmes can significantly enhance graduate employability and help bridge
the digital skills gap. Empirical studies consistently find a strong positive association
between digital literacy and perceived employability, and point to curricular gaps in
digital skills training within universities (Vrana, 2016). Correlational evidence from
accounting education students further shows that digital skills acquisition exerts a strong
positive effect on perceived employability, with geographic location and family income
moderating access to these skills (Joshua & Apuru, 2024)
The concept of self-perceived employability (Rothwell & Arnold, 2007; Rothwell,
Herbert, & Rothwell, 2008) captures an individual's subjective assessment of their labour-
market prospects. Recent evidence shows that career exploration, networking and
guidance-seeking behaviours significantly enhance both objective employment outcomes
and perceived employability (Byrne, 2022). This perceptual dimension mediates between
objective capabilities and actual job-search behaviour; as students who perceive
themselves as employable are more likely to engage in proactive career planning. The
four dimensions of the Rothwell et al. scale – self-beliefs, external labour market state,
university reputation, and field of study – provide a comprehensive measurement
framework.
Recent work has proposed a holistic four-category framework (individual factors,
individual circumstances, enabling support systems and labour market) for classifying
employability gains, reinforcing the need to embed institutional and contextual
dimensions in employability models (Behle, 2020).
2.3. Behavioural economics of education and career choices
Traditional economic models assume that students optimally invest in human
capital based on rational calculations. However, behavioural economics reveals
systematic deviations from this assumption.
Present bias, the tendency to overweight immediate costs relative to future
benefits, leads many students to underinvest in skills whose payoff is delayed, such as
digital competencies, foreign languages, or long-term career planning. In the labour
market context, individuals who are naïve about their present bias may actually perform
differently than predicted by standard theory, with important implications for policy
design.
Self-efficacy beliefs, grounded in Bandura's (1997) social cognitive theory, shape
individuals' career aspirations, effort investment, and persistence. Bandura identified four
major sources of self-efficacy: mastery experience, vicarious experience, verbal
persuasion, and emotional arousal. Social cognitive career theory (SCCT) demonstrates
that self-efficacy influences career development through effects on outcome expectations
and personal goal-setting. Behavioural insights are applied in labour market programs
globally, with evidence that goal orientation, resilience building, and personalised
feedback significantly improve job-seeking outcomes. Recent survey evidence from

723