This study focuses on how education and the level of unemployment are related. In our daily activities, education has proved to be inevitable. Most of the knowledge acquired by people comes as a result of having education. Education is known to solve many problems in the world. That is one of the major reasons why it is treasured as a basic commodity in our daily activities. Education may be in two forms: formal and informal. These two types are distinct since they involve different methods of teaching. Formal education may involve going to modern schools in order to attain quality education. This type of education mostly enables students to get high paying jobs. One of its advantages is that it enables a student to acquire technical skills that are necessary to cope with the current technological changes in the global business environment (Bernam 2004).
The informal type of education does not involve the use of reading materials and other research items. It just involves the passage of knowledge through simple methods like narration and showing things by example. One disadvantage of this form of education is that it does not lead to the attainment of high paying jobs. In addition, knowledge acquired from informal education can only help a person in the society level. This type of education therefore does not help a person to gain skills for international specialization. Despite this, it is advantageous in that it is cheaper compared to the formal type of education (Berman 2004).
Many analysts argue that education is a process. One starts from the lowest level to the highest level. This implies that a student acquires knowledge in stages. As a person grows, he gains more knowledge to enable him solve his day to day problems. When one finishes his education, he starts searching for a job. This shows that education is a gate pass to employment. Without education, one cannot get a good job in the job market. The general purpose of education is to enable a person to acquire knowledge and skills to perform certain roles in the job market.
Lack of employment has been an issue of concern in many countries. Even the developed countries like the United States of America have not been left. The only difference is that the level of unemployment in such countries may not be as high as the level in less developed countries (Martin 2009). This is simply because the level of education in less developed countries is lower as compared to the level in developed countries. The issue of unemployment has been discussed by various economists in the world. This is mainly because it has a negative impact in the economy of a country.
The issues of education and levels of unemployment are interesting since both terms are related. Low education is usually associated with high unemployment rate. The level of education in a country usually depends on the government mechanisms put in place with regard to education. In some countries, people may have some education but may fail to get good jobs. One reason for this is that they do not find jobs of their interest (Martin 2009). This also occurs when a person has not attained all the minimum requirements of a certain job. Due to high expectations, a person may not go for jobs that are lower than his qualifications. However, this may not work out well since there may be no vacancies in the anticipated job category.
High education is not attained to a maximum level in less developed countries due to shortage of resources. Some of the learning institutions are congested and the learning materials used are shared by large number of students. In addition, the governments in such countries do not have adequate funds to support high education in all the parts of the country. This creates an impact in the job market as many people remain unemployed.
There are various authors who have written about the issue of education and employment. Although some of their ideas differ, the basic points portrayed by them are similar. The importance of education in the job environment has induced many writers to write about ways of improving education. In our day to day lives, no one grows without getting some form of education. Some authors have also shown how lack of education has created an impact to the economy of a country. In some articles, the provision of education has been compared in different countries in order to measure differences in performance.
In this analysis, it is important to understand the meaning of high education. High education means that most of the people in a certain country are educated. It also implies that there is an effective education system in most areas of the country. It also means that the attainment of education is not only concentrated in the major cities, but also in other marginal areas. High education in a country ensures that there are many people who have skills to work in various sectors of the economy (Feenstra 2009). The use of these skills will lead to the improvement of the major sectors of the economy like agriculture, tourism and manufacturing.
As a country focuses on increasing the number of people who are educated, it should also look at the quality of education offered in learning education. There are many people who may be educated. However, the quality of education attained by them may not be suitable to get good jobs. High quality of education leads to the provision of quality services in organizations. In developing countries, there are certain institutions that are known to offer better quality education than others. Organizations therefore tend to give priority to students who have attended such institutions. This therefore leaves the other students unemployed. The quality of education should be spread across the country in order to provide equality in employment (Feenstra 2009).
High education cannot lead to high employment if there are no available jobs in the country (Hornstein 2006). It is the job of the government to ensure that there are available jobs for the many educated people in the country. In order to achieve this, the government should come up with ways of expanding infrastructure in the country. By doing this, the government will attract jobs requiring various skills. The first people to benefit with this project would be the ones that have done courses relating to engineering. These people will be involved in building and maintaining the new infrastructures. Once the building of the new infrastructure has been completed, other jobs will be made available after the premises have been occupied. By doing this, there will be reduced unemployment. This will be as a result of reducing the idle capacity of highly educated citizens.
Unemployment may be brought about by mismatch between skills required by the employer and the skills attained by the citizens (Hornstein 2006). In most countries, people strive to search for white collar jobs. This mostly occurs at the expense of technical skills required in other technical industries. Due to this reason, the high education attained by citizens does not lead to the expected employment level. The government should ensure that skills are diversified in learning institutions. This will create a wide variety of skills necessary to create employment in various sectors of the economy. If all citizens went for the white collar jobs, there would be congestion in the search for employment in organizations. There might be few available vacancies offering these kinds of jobs and this might leave many citizens unemployed. However, if skills were diversified, the unemployment level would reduce since people would be employed in various industries of the economy without much congestion.
Some countries experience unemployment due to low education level. It is important to analyze how a country can achieve high level of education. One way of achieving this is by investing adequately in education. This should be in the form of resources. The government should allocate adequate funds to learning institutions to promote high level of education (Hornstein 2006). This has been practiced by some countries, which have introduced free education for primary school pupils. In countries where learning institutions are few, the government should create funds to increase the number of schools. The teachers employed in learning institutions are an important determinant of the quality of education attained by the students. The government should ensure that these teachers are well paid in order to induce their performance.
In the quest to reduce unemployment, economists have pointed out that it is important to look at other economical factors involved. One of the concepts that is important in explaining the impact of reducing unemployment is the Philip Curve phenomenon. Philip Curve states that in reducing the level of unemployment in a country, some level of inflation is inevitable (Krusell 2000). The reverse of this statement is also true. The government should therefore create a balance between inflation and the level of unemployment in the country.
If a person has certain business skills, he does not have to be employed by organizations and other business firms. High education has promoted self employment due to the increase in business skills. In some countries, this has been difficult since some people lack adequate capital to start a business. The government should improve financial institutions in order to induce the provision of loans to the new entrepreneurs (Linquist 2005). By doing this, entrepreneurs will have an opportunity to expand their business and to earn a living. This action will reduce the level of unemployment significantly.
High education ensures the availability of labor necessary for production. This will lead to improved production in areas that require manual work. Improved production will lead to an increase in the number of products being produced within a given time (Martin 2011). This eventually leads to increased sales, which translates into increased profits for a company. The government gets an increase in its revenue due to an increase in income tax received from firms. The increased government revenue may be used to address other issues regarding the level of employment. Eventually, the level of employment will increase.
High education induces creativity in various industries in the country. This comes as a result of sharing ideas among many educated people. Creativity induces innovation, especially in the processing industries (Nickell 2006). Innovation also enables a person to come up with creative services. The creation of these services provides some form of self employment to the unemployed. This shows that if there are many educated people in a country, the unemployment level will reduce due to the existence of diverse ideas. Diverse ideas are available since different people in an economy have attained different forms of knowledge.
Higher learning institutions have enabled people to attain higher levels of education. These include universities, tertiary institutions and colleges. In these institutions, people learn different skills necessary for the attainment of good jobs (Martin 2011). However, there are many people who do not attend these institutions since they lack funds and educational requirements. The government should find ways of sponsoring needy students to enable them attain education in these institutions. Some countries have fewer higher learning institutions. This prevents many students from attaining higher education level. They therefore fail to get good jobs due to failure to attain the education requirements needed.
Data and Variables
An analysis of the unemployment rate should be made based on the ages of individuals. This is because age of individuals relate to the number of years of experience and achievement of academic level. In china, this analysis is resourceful because the unemployment rates vary with different age groups. The analysis of unemployment rate can be done using dummy variables. In this case, the employment rate will be the variable that will be qualitative in nature. A dummy variable is a variable which can only be measured in qualitative terms. The regression equation for this analysis can take the following form:
Employment =α +β1age22- 24 β2 year2005 +β3age22 -24 * year2005+ γX+ε
In the above equation, the employment level forms the dependent variable while the ages form the independent variables. α sign represents a constant. β represent various coefficients that are attached to different independent variables. The above regression model was made for data collected in china. In this country, it is believed that the provision of high education will lead to an increase in the level of employment. Observations for the year 2005 indicate that citizens with ages from 22 to 24 are affected by the provision of high education. The dummy variables are equal to 1 if the improvement of the current system of education affects the age groups.
The age group from 22 to 24 has been chosen in this analysis. This is because most students finish their education at this age bracket. Most of the members of this group are searching for jobs in the job market.
In the above diagram, N represents the number of observations that were made. These observations were made in china to evaluate the transition made in the employment sector as a result of a change in the level and quality of education. The * symbol represents significant levels. * represent 1%, ** represent 5% while *** represent 10% significant levels. s.d represents the standard deviation of the various coefficients used in the model. The R squared in this model has been used to measure the goodness of fit. The three significant levels have been used to test whether the model and the specific coefficients are statistically significant.
The positive value of the coefficients used in the model can be used to analyze the effect of education on employment. Initially, these coefficients are positive. At the far end of the table, the figures shown are generally higher than the figures in the left hand side of the table. This shows that after graduation, the employment level rises as a result of utilizing high education. As the education level increases, the unemployment rate decreases. A good example can be shown by the age22-24*year2005 category. in this category, the coefficient is initially at 0.088. After graduation, the value of this coefficient is 0.348.
The calculation of the standard deviation has involved finding the square root of the variance from the model. All coefficients have their standard deviations that have been obtained by finding the square root of specific variances. R-squared has been achieved by dividing the explained sum of squares by the total sum of squares. Changes in the employment level have been calculated by estimating the change in the level of education while holding all other factors constant.
The results of the findings show that high education and the level of unemployment have a negative relationship. This means that as the level of education increases, there will be reduced unemployment. The effect of education on the level of employment differs with countries. This is mainly because different countries have various levels of education. Many countries have invested in education in order to enhance high levels of employment in the largest sectors of the economy.
According to the results obtained, the jobs obtained depend on the level of education attained. In the table above, the coefficients values of people with professional degrees are higher than for people with diplomas. People with diplomas have a lower chance of getting jobs as compared to those who have professional degrees. In most cases, people with diplomas and certificates in various professional areas earn less compared to people with professional degrees. Generally, as the level of education increases, the employment rate increases. The employment rate of people having doctorate degrees is lower than the people having professional degrees. This is mainly because the former require hefty payment due to their high qualification. Many companies fail to employ these people in order to avoid paying high salaries. This happens in companies aimed at minimizing costs.
Higher education should be enhanced among various students in order to reduce the level of employment in a country. This can be done by improving the system of education relating to higher education. Expanding institutions that offer higher education would help in increasing the number of people who attain this level of education. Specialization of skills in education institutions should be made in order to avoid congestion in the search for white collar jobs.
People should also study the trends in the labor market to estimate the chances of getting employment in a certain industry. The employment level of a country is related to its economy. High employment leads to increased productivity and this increases the level of national income. This eventually leads to increased economic growth. If this is matched by an improvement in technology and other structural changes, it will lead to economic development. Therefore, the level of unemployment should be reduced in order to achieve a positive change in the economy. For this to be attained, economists in a country should be involved in proper planning, especially in the education sector. Finally, high education should be enhanced by the government to ensure a reduction in the level of unemployment. This will lead to the reduction and prevention of poverty in the country. It will also lead to economic stability and good reputation for the country.
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