Abstract
Given the transitive challenges in the labor market, education can provide a sustainable developmental map for worldwide economic prosperity. Deep understanding of the dynamics of human capital, reflecting earnings aspirations in the labor market, indicates the need for policy makers to monitor and modify pedagogical curricula to meet the supply/demand of markets based on scientific evidence. In this study, we propose a methodology based on a household integrated economic survey (HIES) and, using different models, assess the impact of attained education and returns on the practical utility of skills within the context of a transitive labor market. We observe that effort levels are snowballing and rejection rates are declining for people with higher education (HE), whereas wage offers decline for people with low education (LE). Our results reveal significant differences in the supply/demand factors of both the public and private markets’ one-shot and continual affiliations. We conclude the impact of sheepskin effects and the implication of our findings.
Highlights
Over the past six decades, education has received considerable attention in the literature
We assumed that the workers who completed additional years of education received a premium over the nondiscriminatory wage structure, the exception being that this monotonic increase in higher education (HE) applies to those who acquire a postgraduate degree, associated with a cohort that terminates studies after obtaining a university degree
Shifting attention to control variable results revealed that higher earnings are related to employees who possess higher qualified degrees and better cognitive skills, and who expected that wage discrimination increases with experience
Summary
Over the past six decades, education has received considerable attention in the literature. Human capital (knowledge)-based skills [1,2,3], which is captured in the phrase, “plant a seed and reap a hundred harvests”. Investing in years of education, like investing in the accumulation of productive skills, improves people’s abilities as demanded by the labor market [5]. The government of Pakistan consistently emphasized human capital development as a potential engine for developing a knowledge-based economy [8]. Budgetary allocations for human capital development in the educational sector has increased every fiscal year, and a sum of RS 20.5 billion or 21% was allocated in the 2015–2016 budget for the Higher Education Commission (HEC) of Pakistan
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