Exploring Relationships between Education Level and Unemployment
DOI:
https://doi.org/10.25255/jss.2018.7.2.86.102Keywords:
Training, Skills, skill attainment, youth, joblessness, South AfricaAbstract
Purpose: Unemployment has been a subject for numerous studies and recent debates in South Africa and beyond. This paper explores the relationship between education level and unemployment among the youth in four municipalities in O.R Tambo District (ORTDM), Eastern Cape, South Africa. The theory of human capital provided the theoretical underpinning of the connection between education level and unemployment, and also the theory was used to interpret the findings. It is assumed that by conducting this investigation, an important contribution is made to theoretical developments in the education and jobs sectors literature and policy in South Africa. Research methods: The study participants were selected using the systematic random sampling since the study employed a quantitative research paradigm. The cross-sectional survey design was implemented. The data consisted of 120 self-completed survey questionnaires from the studied employable young people. The crosstabulation, correlation, chi-suqare data analyses methods were used while the multiple regression model developed was used to test the relationships. Findings: From the analyses, relationships were established such that educational level was found to positively relate to unemployment and was also found to have the highest effect on unemployment. Furthermore, result show negative correlation between economic status and education qualification, while it was positively correlated to unemployment. Lastly, a weak linear relationship exists between level of education and economic status. Implications for research and practice: The findings provide an opportunity for education policy makers to collaborate with the government(s) to develop strategies that favour employment. The results mean that a recurring production of education and training into the labour market is not accompanied by a reduction in unemployment. Future studies may investigate other issues responsible for increasing unemployment in the country despite economic improvement as well as the moderating role of race.
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Author Biographies
Grabe Mpendulo, Walter Sisulu University, South Africa
Eric E. Mang’unyi, The Catholic University of Eastern Africa
References
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Bless, C., Higson-Smith, C., & Sithole, S. L. (2013). Fundamentals of social research methods: An African perspective (5th ed.). Lusaka: Juta & Company Ltd., Paarl Media Paarl.
Cazes, S., & Verick, S. (2013). Perspective on labour economics for development. New Delhi: ILO.
Cloete, A. (2015). Youth unemployment in South Africa: A theological reflection through the lens of human dignity. Missionalia-Southern African Journal of Mission Studies, 43(3): 513 – 525. doi: http://dx.doi.org/10.7832/43-3-133.
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Cutler, D. M., Huang W., & Lleras-Muney, A. (2015). When does education matter? The protective effect of education for cohorts graduating in bad times. Social Science & Medicine 127, 63-73.
Dae-Bong, K. (2009). Human Capital and its Measurement. Paper presented at the 3rd OECD World Forum on “Statistics, Knowledge and Policy” Charting Progress, Building Visions, Improving Life, 27-30 October 2009, Busan, Korea. Accessed at: www.oecd.org/site/progresskorea/44109779.pdf
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Eiselen, R. J., Uys, T., & Potgieter, N. (2005). Analysing survey data using SPSS 13: A workbook. Johannesburg: University of Johannesburg Press.
Elgrably, N. (2006, December). The minimum wage and labour market flexibility. Economic Note – Labour Law Series. Canada: Montreal Economic Institute. Accessed at: http://www.iedm.org/files/dec06_en.pdf.
Erdem, E., & Tugcu, C. T. (2012). Higher education and unemployment: A cointegration and causality analysis of the case of Turkey. European Journal of Education 47, 299-309.
Fernandez-Villaverde, J. (2016). Job Search Models. Philadephia, US: University of Pennyslvania.
Festus, Y., Kasonga, L., Moses, M., & Yu, D. (2015). The South African labour market 1995-2013. Economic Research Southern Africa (ERSA), Working Paper 493. South Africa. Accessed at: https://www.econrsa.org/system/files/publications/working.../working_paper_493.pdf
Gaspar, K. (2009). The relationship between unemployment and health. (MA thesis, Central European University, Budapest, Hungary. Retrieved from econ.core.hu/file/download/szirak11/gaspar.pdf
Goldin, C. (2014). Human capital. In C. Diebolt and M. Haupert (Eds.). Handbook of cliometrics. Springer-Verlag.
Griffiths, M., & Rotheim, R. (2007). Classical and Keynesian economic explanations for unemployment. EC103: Introduction to Macroeconomics. Skidmore College: NY. Accessed at: www.inscitia.com/wp-content/uploads/.../Michael_Griffiths_EC103H_Final_Essay.pdf.
Gujarati, D. N., Porter, C. D., & Gunasekar, S. (2013). Basic econometrics (5th ed.). New Delhi: Tata McGraw-Hill Education Pvt. Ltd.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis: A global perspective. New York: Pearson Prentice Hall.
Industrial Development Corporation. (2013). South African economy: An overview of key trends since 1994. Department of Research and Information, South Africa.
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Laureys, L. (2014). The cost of human capital depreciation during unemployment. Working Paper No. 505. Bank of England. Retrieved from: www.bankofengland.co.uk/research/Documents/workingpapers/2014/wp505.pdf
Lie, K. Y., Pang, V., & Mansur, F. (2007). Employer perceptions on graduate literacies in higher education in relation to the workplace. English for Specific Purposes World. Retrieved from: http://w w w.esp-world.info/ Articles_20/DOC/Koo_vp_employer_Journal18Oct09.pdf.
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Nel, H., & Neale-Shutte, M. (2013). Examining the evidence: Graduate employability at Nelson Mandela Metropolitan University. South African Journal of Higher Education, 27(2), 437-453.
Núñez, I., & Livanos, I. (2010). Higher education and unemployment in Europe: an analysis of the academic subject and national effects. Higher Education 59, 475-487.
Oluwajodu, F., Blaauw, D., Greyling, L., & Kleynhans, E.P. J. (2015). Graduate unemployment in South Africa: Perspectives from the banking sector. SA Journal of Human Resource Management/SA Tydskrif vir Menslikehulpbronbestuur, 13(1). doi: http://dx.doi. org /10.4102/ sajhrm.v13i1.656.
Oreopoulos, P., von Wachter, T., & Heisz, A. (2012). The short- and long-term career effects of graduating in a recession. American Economic Journal: Applied Economics, 4(1), 1-29.
Riddell, W. C., & Song, X. (2011). The impact of education on unemployment incidence and re-deployment success: Evidence from the US labour market. IZA Discussion Paper No. 5572. Retrieved from ftp.iza.org/dp5572.pdf
Rogan, M., & Reynolds, J. (2014). Annual Eastern Cape labour review. Neil Aggett Labour Studies Unit Research Report 2. Rhodes University. Available at: www.ru.ac.za/nalsu.
Sekaran, U., & Bougie, R., (2010). Research methods for business: A skill-building approach (5th ed.). New York: John Wiley & Sons, Inc.
Sekaran, U., & Bougie, R. J. (2016). Research methods for business: A skill-building approach (7th ed.). West Sussex: John Wiley & Sons Ltd.
Sha, N. (2006). Are graduates to be blamed? Unemployment of computer science graduates in Malaysia. Retrieved from http://aabss.org/Perspectives2008/AABSS2008Article6NORSHIMAZSHAH.pdf.
Simiyu, J., & Sambu, L. (2012). Nature and type of government and NGO interventions in curbing unemployment and underemployment of urban youth in Kenya. Journal of Emerging Trends in Educational Research and Policy Studies, 3(5), 730-736.
Stats SA. (2014). Mid-year population estimates. Statistical Release P0302, Statistics South Africa. Accessed at: https://www.statssa.gov.za/publications/P0302/P03022014.pdf
Stats SA. (2015). National and provincial labour market: Youth. Quarter 1 2008-Quarter 1 2015. Statistical Release P0211.4.2, Statistics South Africa. Accessed at: www.statssa.gov.za/publications/P02114.2/P02114.22015.pdf
Tabachnick, B. G., & Fidell, L. S. (2001). Using multivariate statistics (4th ed.). New York: Harper Collins College.
Teixeira, P. N. (2014). Gary Becker’s early work on human capital – collaborations and distinctiveness. IZA Journal of Labor Economics, 3(1), 1-20. Retrieved from https://izajole.springeropen.com/articles/10.1186/s40172-014-0012-2. doi:10.1186/s40172-014-0012-2.
The European Centre for the Development of Vocational Training, Cedefop. (2015, January). Skill set and match - Cedefop’s magazine promoting learning for work. Luxembourg: Cedefop. Retrieved from http://www.europass.ie/europass/documents/SkillsetandMatchJan2015.pdf.
Uddin, P. S. O., & Uddin, O. O. (2013). Causes, Effects and Solutions to Youth Unemployment Problems in Nigeria. Journal of Emerging Trends in Economics and Management Sciences, 4(4), 397-402.
Van de Rheede, T. J. (2012). Graduate unemployment in South Africa: Extent, nature and causes. MCom Thesis, University of the Western Cape, Cape Town, South Africa. Retrieved from http://etd.uwc.ac.za/xmlui/handle/11394/4497.
Van der Merwe A. (2009). A comparison of the labour market expectations and labour market experiences of new graduates. South African Journal of Higher Education, 23(2), 398 – 417.
Weir-Smith, G. (2014). An overview of the geographic data of unemployment in South Africa. South African Geographical Journal, 96(2), 134 – 152.
Applegate, J., Chiem, P., & Sanders, C. (2014). Education and unemployment rates before and after the great recession. Retrieved from https://smartech.gatech.edu/.../EducationandUnemploymentLevelsBeforeandAfterthe...
Archer, E., & Chetty, Y. (2013). Graduate employability: Conceptualisation and findings from the University of South Africa. Progressio, 35(1), 134-165.
Baah-Boateng, W. (2015). Unemployment in Ghana: A cross sectional analysis from demand and supply perspectives. African Journal of Economic and Management Studies, 6(4), 402 – 415. doi: http://dx.doi.org/10.1108/AJEMS-11-2014-0089.
Becker, G. S. (1975). Human Capital (2nd ed.). Chicago: University of Chicago Press.
Bernal-Verdugo, L. E., Furceri, D. & Guillaume, D. (2012). Labour market flexibility and unemployment: New empirical evidence of static and dynamic effects. IMF Working Paper 12/64. Washington, D.C.: United States. Retrieved from adapt.it/.../bernal_verdugo_furceri_guillaume_labour_market_flexibility_2013_64.p.
Blanchard, O., & Johnson D. R. (2013). Macroeconomics. Harlow: Pearson.
Bless, C., Higson-Smith, C., & Sithole, S. L. (2013). Fundamentals of social research methods: An African perspective (5th ed.). Lusaka: Juta & Company Ltd., Paarl Media Paarl.
Cazes, S., & Verick, S. (2013). Perspective on labour economics for development. New Delhi: ILO.
Cloete, A. (2015). Youth unemployment in South Africa: A theological reflection through the lens of human dignity. Missionalia-Southern African Journal of Mission Studies, 43(3): 513 – 525. doi: http://dx.doi.org/10.7832/43-3-133.
Construction Industry Development Board. (2015). Labour and Work Conditions in the South African Construction Industry: Status and Recommendations. Retrieved from www.cidb.org.za/.../Labour%20and%20Work%20Conditions%20in%20the%20South.
Cooper, R. D., & Schindler, S. P. (2008). Business research methods (8th ed.). New Delhi: Tata McGraw-Hill Publishing Company Limited.
Corneli-Ben, T., & Hubler, O. (2005). Downward Wage Rigidity and labour Mobility. Discussion Paper Series IZA DP No. 1523. Institute for the Study of Labour, Hannover: Germany. Available at: http://ftp.iza.org/dp1523.pdf.
Creswell, J. W. (2014). Research design: Qualitative, quantitative and mixed methods approaches. Thousand Oaks, CA: Sage Publications, Inc.
Creswell, J.W. (2015), “Research Methods”, 4th ed, Lincoln: Sage Publications.
Cutler, D. M., Huang W., & Lleras-Muney, A. (2015). When does education matter? The protective effect of education for cohorts graduating in bad times. Social Science & Medicine 127, 63-73.
Dae-Bong, K. (2009). Human Capital and its Measurement. Paper presented at the 3rd OECD World Forum on “Statistics, Knowledge and Policy” Charting Progress, Building Visions, Improving Life, 27-30 October 2009, Busan, Korea. Accessed at: www.oecd.org/site/progresskorea/44109779.pdf
Department of Basic Education (DBE). (2011). South African country report: Progress on the implementation of the regional education and training plan. Pretoria, South Africa: DBE.
Dimian, G. C. (2015). Labour market mismatches and age group unemployment in romania and other six CEE countries. Petroleum - Gas University of Ploiesti Bulletin, Technical Series 67,103-113.
Eiselen, R. J., Uys, T., & Potgieter, N. (2005). Analysing survey data using SPSS 13: A workbook. Johannesburg: University of Johannesburg Press.
Elgrably, N. (2006, December). The minimum wage and labour market flexibility. Economic Note – Labour Law Series. Canada: Montreal Economic Institute. Accessed at: http://www.iedm.org/files/dec06_en.pdf.
Erdem, E., & Tugcu, C. T. (2012). Higher education and unemployment: A cointegration and causality analysis of the case of Turkey. European Journal of Education 47, 299-309.
Fernandez-Villaverde, J. (2016). Job Search Models. Philadephia, US: University of Pennyslvania.
Festus, Y., Kasonga, L., Moses, M., & Yu, D. (2015). The South African labour market 1995-2013. Economic Research Southern Africa (ERSA), Working Paper 493. South Africa. Accessed at: https://www.econrsa.org/system/files/publications/working.../working_paper_493.pdf
Gaspar, K. (2009). The relationship between unemployment and health. (MA thesis, Central European University, Budapest, Hungary. Retrieved from econ.core.hu/file/download/szirak11/gaspar.pdf
Goldin, C. (2014). Human capital. In C. Diebolt and M. Haupert (Eds.). Handbook of cliometrics. Springer-Verlag.
Griffiths, M., & Rotheim, R. (2007). Classical and Keynesian economic explanations for unemployment. EC103: Introduction to Macroeconomics. Skidmore College: NY. Accessed at: www.inscitia.com/wp-content/uploads/.../Michael_Griffiths_EC103H_Final_Essay.pdf.
Gujarati, D. N., Porter, C. D., & Gunasekar, S. (2013). Basic econometrics (5th ed.). New Delhi: Tata McGraw-Hill Education Pvt. Ltd.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis: A global perspective. New York: Pearson Prentice Hall.
Industrial Development Corporation. (2013). South African economy: An overview of key trends since 1994. Department of Research and Information, South Africa.
Jacob, E. (2014). Twelve ways to fix the youth unemployment crisis. Governance studies at Brookings. Accessed at: https://www.brookings.edu/.../twelve-ways-to-fix-the-youth-unemployment-crisis/.
Laureys, L. (2014). The cost of human capital depreciation during unemployment. Working Paper No. 505. Bank of England. Retrieved from: www.bankofengland.co.uk/research/Documents/workingpapers/2014/wp505.pdf
Lie, K. Y., Pang, V., & Mansur, F. (2007). Employer perceptions on graduate literacies in higher education in relation to the workplace. English for Specific Purposes World. Retrieved from: http://w w w.esp-world.info/ Articles_20/DOC/Koo_vp_employer_Journal18Oct09.pdf.
Micer, J. (1991). Education and unemployment. Cambridge: NBER.
National Treasury. (2011). Confronting Youth Unemployment: policy options for South Africa. Pretoria, South Africa. Accessed at: http://www.treasury.gov.za/documents/national%20budget/2011/Confronting%20youth%20unemployment%20-%20Policy%20options.pdf.
Nel, H., & Neale-Shutte, M. (2013). Examining the evidence: Graduate employability at Nelson Mandela Metropolitan University. South African Journal of Higher Education, 27(2), 437-453.
Núñez, I., & Livanos, I. (2010). Higher education and unemployment in Europe: an analysis of the academic subject and national effects. Higher Education 59, 475-487.
Oluwajodu, F., Blaauw, D., Greyling, L., & Kleynhans, E.P. J. (2015). Graduate unemployment in South Africa: Perspectives from the banking sector. SA Journal of Human Resource Management/SA Tydskrif vir Menslikehulpbronbestuur, 13(1). doi: http://dx.doi. org /10.4102/ sajhrm.v13i1.656.
Oreopoulos, P., von Wachter, T., & Heisz, A. (2012). The short- and long-term career effects of graduating in a recession. American Economic Journal: Applied Economics, 4(1), 1-29.
Riddell, W. C., & Song, X. (2011). The impact of education on unemployment incidence and re-deployment success: Evidence from the US labour market. IZA Discussion Paper No. 5572. Retrieved from ftp.iza.org/dp5572.pdf
Rogan, M., & Reynolds, J. (2014). Annual Eastern Cape labour review. Neil Aggett Labour Studies Unit Research Report 2. Rhodes University. Available at: www.ru.ac.za/nalsu.
Sekaran, U., & Bougie, R., (2010). Research methods for business: A skill-building approach (5th ed.). New York: John Wiley & Sons, Inc.
Sekaran, U., & Bougie, R. J. (2016). Research methods for business: A skill-building approach (7th ed.). West Sussex: John Wiley & Sons Ltd.
Sha, N. (2006). Are graduates to be blamed? Unemployment of computer science graduates in Malaysia. Retrieved from http://aabss.org/Perspectives2008/AABSS2008Article6NORSHIMAZSHAH.pdf.
Simiyu, J., & Sambu, L. (2012). Nature and type of government and NGO interventions in curbing unemployment and underemployment of urban youth in Kenya. Journal of Emerging Trends in Educational Research and Policy Studies, 3(5), 730-736.
Stats SA. (2014). Mid-year population estimates. Statistical Release P0302, Statistics South Africa. Accessed at: https://www.statssa.gov.za/publications/P0302/P03022014.pdf
Stats SA. (2015). National and provincial labour market: Youth. Quarter 1 2008-Quarter 1 2015. Statistical Release P0211.4.2, Statistics South Africa. Accessed at: www.statssa.gov.za/publications/P02114.2/P02114.22015.pdf
Tabachnick, B. G., & Fidell, L. S. (2001). Using multivariate statistics (4th ed.). New York: Harper Collins College.
Teixeira, P. N. (2014). Gary Becker’s early work on human capital – collaborations and distinctiveness. IZA Journal of Labor Economics, 3(1), 1-20. Retrieved from https://izajole.springeropen.com/articles/10.1186/s40172-014-0012-2. doi:10.1186/s40172-014-0012-2.
The European Centre for the Development of Vocational Training, Cedefop. (2015, January). Skill set and match - Cedefop’s magazine promoting learning for work. Luxembourg: Cedefop. Retrieved from http://www.europass.ie/europass/documents/SkillsetandMatchJan2015.pdf.
Uddin, P. S. O., & Uddin, O. O. (2013). Causes, Effects and Solutions to Youth Unemployment Problems in Nigeria. Journal of Emerging Trends in Economics and Management Sciences, 4(4), 397-402.
Van de Rheede, T. J. (2012). Graduate unemployment in South Africa: Extent, nature and causes. MCom Thesis, University of the Western Cape, Cape Town, South Africa. Retrieved from http://etd.uwc.ac.za/xmlui/handle/11394/4497.
Van der Merwe A. (2009). A comparison of the labour market expectations and labour market experiences of new graduates. South African Journal of Higher Education, 23(2), 398 – 417.
Weir-Smith, G. (2014). An overview of the geographic data of unemployment in South Africa. South African Geographical Journal, 96(2), 134 – 152.
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Published
2018-04-12
How to Cite
Mpendulo, G., & Mang’unyi, E. E. (2018). Exploring Relationships between Education Level and Unemployment. Journal of Social Sciences (COES&Amp;RJ-JSS), 7(2), 86–102. https://doi.org/10.25255/jss.2018.7.2.86.102
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