Abstract
With the expansion of higher education, it has been reported that the relative advantage of university graduates decreased. However, STEM graduates tended to be an exception, as the demand for STEM majors has gradually been increasing in the knowledge economy society where economic development is based on R&D innovation. Against this backdrop, this study aimed to explore how the proportion of STEM graduates might affect college graduate unemployment rates in major OECD countries where the enrollment rates of universities have been on the rise. Two models—a fixed-effects model and a fixed-effects two-stage model using an instrumental variable—were used to examine whether the ratio of STEM graduates affected the unemployment rates of college graduates between 2000 and 2019 for 19 OECD countries. Consequently, this research has reached the conclusion that the proportion of STEM major graduates in a country has a statistically significant adverse effect on the college graduate unemployment rate. The result based on this causal inference method can provide a policy basis for the government to support the cultivation of STEM talents considering that the supply of STEM majors has been insufficient in many countries.
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