Higher education boosts job opportunities

Greater access to quality tertiary education helps create greater and more decent job opportunities for young men and women in developing countries, according to a study conducted by the International Labour Organization, or ILO, in partnership with the MasterCard Foundation.

In a report of the study, Theo Sparreboom, a senior labour economist at the ILO, stressed that the lack of quality higher education had left millions of young people out of decent jobs who then subsequently relied on the informal labour market.

“On average, 83% of youth with quality tertiary education were in non-vulnerable employment in 27 low-to-upper middle income countries that were examined,” said Sparreboom, principal researcher of the study.

Although the guarantee of getting jobs was slightly less prominent, particularly among low-income countries, 75% of young workers with quality university degrees managed to find decent jobs, he said.

In sharp contrast, the labour experts found completion of secondary education alone was not enough to push young people in low-income countries towards better labour market outcomes.

“Between 2012 and 2013, only 40% of young secondary school graduates were engaged in non-vulnerable employment in low-income countries as compared with 72% in lower middle-income countries.”

Azita Berar Awad, director of employment policy at the ILO, said the study confirmed the role of quality higher education in shaping labour market outcomes for young people globally.

“The results of the study should be a wake-up call for most developing countries to improve their higher education systems in order to reduce unemployment and informal work arrangements among the youth,” said Awad.

Titled Is education the solution to decent work for youth in developing economies?, the report points out that whereas developing countries have been progressing towards universal access to primary education for all, they face many challenges regarding quality higher education.

Nonetheless, the report warns that increasing the level of education in the emerging workforce in developing economies will not in itself ensure automatic absorption of higher skilled labour into non-vulnerable jobs.

“To continue pushing under-educated and under-skilled youth into the labour market is a no-win situation for the young person who remains destined for a hand-to-mouth existence, and for the economy which gains little in terms of boosting its labour productivity potential,” says the report.

The conclusions of the report were based on labour market surveys conducted in Sub-Saharan Africa, Asia and the Pacific, Eastern Europe and Central Asia, Latin America and the Caribbean, and Middle East and North Africa.

In Sub-Saharan Africa, Benin, Liberia, Madagascar, Malawi, Tanzania, Togo, Uganda and Zambia participated in the survey, while Asia and the Pacific had Bangladesh, Cambodia, Nepal, Samoa and Vietnam. Sampled countries from Eastern Europe and Central Asia included Armenia, Kyrgyzstan, Macedonia, Moldova, Russia and Ukraine.

Latin America and the Caribbean were represented by Brazil, Colombia, El Salvador, Jamaica and Peru while the Middle East and North Africa had Egypt, Jordan, Palestine and Tunisia.

Dr Anita Staneva, a labour economist and a co-author of the report, reported that the vulnerable employment rate is highest in Sub-Saharan Africa as a result of a low gross enrolment rate in tertiary education that currently stands at 9%. That compared to 33% in upper middle income countries, such as Brazil, Russia, Ukraine and Macedonia.

“Such disparities in terms of human capital development between developing and developed countries have their roots in the quality as well as the quantity of education,” said Staneva.

Researchers argued that less-developed countries were characterised by lower levels of educational attainment as well as poor quality of education and limited skills accumulation. They also pointed out that lack of adequate schooling was one of the key factors for problems of under-qualification, skills shortages, skills gaps and skills mismatches.

Analysing data gleaned from ILO’s baseline school-to-work-transition surveys for 2012-2013, the researchers noted that some low-income developing countries had almost failed to provide university-level education for most of their youth.

“For instance in Bangladesh, Madagascar, Malawi, Tanzania and Zambia, less than 2% of the youth population has achieved a tertiary level of education,” says the report.

Other countries with less than 5% of their young with tertiary education included Benin, Cambodia, El Salvador, Liberia and Togo. Of the 28 sampled countries, Ukraine leads the pack with 44% of its young population having tertiary education.

Interestingly, whereas cases of under-education were observed in most low-income countries, the researchers also observed emerging problems of over-education. According to the report, over-education occurred in situations where a university graduate was employed as a clerk or in other low-skilled, non-manual occupations meant for secondary education graduates.

Countries with over-educated youth included Samoa at 62%, Colombia 35%, Peru 30%, Moldova 28%, Zambia 25% and Vietnam 24%. Countries with the highest number of under-educated youth, where a high school graduate has a high-skilled, non-manual occupation include Benin 84%, Malawi 83%, Uganda 74%, Togo 67% and Madagascar 63%.

Nevertheless, on average in the 28 countries, almost half of employed youth are well-matched at 47%, while more than a third – 37% – are under-educated for their jobs and the remainder over-educated at 16%.

“Qualifications mismatch shows a remarkably wide range across countries, with over-education affecting less than 5% of young workers in Bangladesh, Benin, Cambodia, Malawi, Togo and Uganda,” says the report.

According to ILO, under-education is a cause for concern, particularly in low-income countries where, on average, 51% of youth in non-vulnerable employment are under-educated, rising to 69% in vulnerable employment.

Taking into account that decent work has become rare for younger workers in virtually all countries, the ILO has urged governments, especially those in low-income economies, to embark on quality higher education strategies in order to overcome under-education of their young.

The disturbing issue is that unemployment rates in low-income countries tend to rise by level of education, which is wrongly perceived as an indication of an abundant supply of university graduates.

“But the opposite is true, as the school-to-work-transition surveys data reveal the low educational profiles of youth in low-income countries,” says the report.

There is also an indicator that the relatively high unemployment rates for better educated youth in developing economies are more likely to reveal they are not adequately prepared for careers that are in demand in the labour market.

In other instances, young people are prepared to wait for the opportunity of a quality job in the formal sector, ostensibly reflecting a false glut of a large pool of educated labour at the national level.

But, as Awad pointed out, lack of quality tertiary education has the capacity to fuel perpetuation of poverty across generations as unskilled workers earn lower wages and are unable to fund the schooling of their children.