Is College Overrated?
Obtaining a college degree in Asia, like elsewhere in the world, is a middle class dream. It is often considered a ticket to increased employment opportunity. But recently there has been some evidence to suggest that this is not always the case.
For instance, while more than 80% of eligible students in South Korea go on to earn a college degree (often at considerable expense to their families), higher educational attainment has generally not led to better employment prospects for these graduates. A similar problem exists in China where the penetration of tertiary education has risen from 7% in 1999 to about 27% in 2011. There are simply not enough jobs for new graduates in either country. Specifically, there is a dearth of opportunities from the most coveted employers — the Chinese government and large Korean conglomerates known as chaebol. Some believe that many Chinese and Korean graduates tend to be unwilling to settle for smaller private businesses and therefore unemployment among college graduates in these countries is higher than those without college degrees. This dichotomy is particularly stark in China where the unemployment rate among college graduates is four times that of those with just a primary education.
These trends contrast with those in more developed countries where unemployment among people with only a primary education is usually higher than that of college graduates. This may point to a potential misallocation of resources in parts of Asia and suggest that the dramatic improvement in higher education enrollment has surpassed the ability of these economies to generate suitable jobs. Recognizing this problem, Korea and China are taking remedial measures, for instance by emphasizing vocational training, apprenticeships and closer industry links.
There are some key lessons here for other developing Asian countries. One is: design an educational system to emphasize practical learning and skills that address real world demand. This would involve adequately funded vocational training schools and companies incentivized by such perks as tax breaks to train young people. These changes may take a while to bear fruit and may only affect the prospects of today’s school-going young.
Amending labor laws to better facilitate employment of the unskilled and the semi-skilled may help the working age youth. India‘s draconian labor laws, which make hiring and firing of employees a tortuous process, is one of the reasons why companies are unable to employ younger workers even in low value-add areas such as food processing. This is a shame for a country teeming with underemployed and unemployed youth. If education systems and policies are not tailored to suit the particular demands of one’s labor market, the dream of joining the middle class might remain just that for many in Asia.
© Matthews Asia