Higher Education and Unemployment: Rural Urban Dichotomy

Abstract

Pakistani Higher education population has increased rapidly in recent years as well as unemployment rate among individuals with higher education, however empirically least researched so far. The objective of this paper was to investigate the effect of higher education attainment on unemployment rate in urban and rural areas of Pakistan. Data of 10 years was taken from Labor Force Survey (LFS) for four provinces, Regression analysis was used to examine data. The evidence suggests a strong relationship between population with higher levels of education and their unemployment rate. That is with the increase in HE population there is greater increase in their unemployment rate and the results are more pronounced for rural areas compared to urban. The paper also documents that higher education unemployment rate contributes more towards total unemployment at different levels of education (i.e., other than degree, post-graduate, and PhD level). Moreover, the findings based on the segregation of male and female population in all the four provinces are consistent with aforesaid evidence. The unique feature of this study is that this empirical work examines the effect of higher education and unemployment with spatial differences that is still not fully explored in Pakistani as well as in international context. It is the first study that has investigated the effect of higher education on unemployment in Pakistani context. Further research is required to investigate the effect of different disciplines and quality of higher education on unemployment rate. Besides effect of higher education should also be investigated separately in urban regions and urban/industrial centers.