Economics of Transition Transition and the employability of Slovenian graduates Daa Farcnik dasa'far

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Economics of TransitionTransition and the
employability of Slovenian graduatesDaa
Farcnikdasa.farcnik_at_ef.uni-lj.si Ljubljana,
12.5.2009
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Content

• The importance of the education system
• Education system in Slovenia
• Higher education system
• Results from the employability of graduates study
  

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1. The importance of education system

• From socialism to market economy
• ?
• Restructuring from state owned enterprises to
  public owned and private enterprises
• ?
• Global competition
• ?
• Human resources
• ?
• Education system

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The importance of education system

• Human capital, as a determinant of economic
  growth, includes education, health and social
  capital, which influence future income by
  increasing the quality of resources embedded in
  people.
• According to Becker (1964) forms of investments
  in human capital include schooling, on-the-job
  training, medical care, migration, and searching
  for information about prices and incomes.

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Investment in higher education

• Human capital as growth generating factor (Nelson
  Phelps, 1966)
• Neo-classical economic growth models (Mankiw,
  Romer and Weil, 1992, Lucas, 1988) human capital
  as an accumulating factor of production of Solow
  model
• Benhabib and Spiegel (1994) show, that the rate
  of productivity growth is positively correlated
  with the stock of human capital
• Barro and Lee (2000) the growth is positively
  related to the average years of school
  attainment of adult males at the secondary and
  higher levels.
• Aghion (2007) investment in higher education
  affects countrys ability to make leading-edge
  innovations for economic growth

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Education system in Slovenia (1)

• 3 phases of education
• Elementary (primary)
• Secondary
• Tertiary
• From secondary to tertiary education
• Matriculation exam (general and professional)
• Acceptance conditions (60 / 40)
• Number of places by the program and university

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Education system in Slovenia (2)

• Public and private financing

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Higher education system
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Education system in Slovenia (2)

• Public and private financing
• ?
• Increase of education attainment (especially
  graduate)
• ?
• Share of employed with graduate education
• ?
• Economic growth and development
• Overproduction/misproduction of graduates?

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Higher education system (2)

• 4 universities with several faculties
• Ljubljana, Maribor, Primorska, Nova Gorica
• Independent higher education institutions (manly
  business oriented programs)

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Share of graduates by the higher education
institution in 2007
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Higher education system (3)

• Several different faculties
• Several different fields of education
• Several different study programs (pre-Bologna
  professional and university degree, Bologna
  professional and university degree)
• Manner of study regular or part time students

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Some additional facts

• Dominance of female graduates
• 42 of male in 1995
• 38 of male in 2007
• Exceeded duration of schooling
• 6,2 years on average

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Increasing number of students in the last dacade
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Share of umemployed according to levels of
education
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Students regarding the field of education in 2007
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• Motivation for higher education attainment
  (tuition free)
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• Allocation of free students places
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• (Affecting the decision making of students)
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• Overproduction of graduates?
• Missmatch of DL and SL?
• ?
• A need for employability study!

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3. Employability study

• Rich data set for all 14.769 graduates in 2007
• on personal characteristics (gender, year of
  birth, municipality, nationality), types of
  schooling (university, faculty, program, ISCED
  field classification, full time or half time
  education, year of enrollment, year of
  graduation, previous education, employment during
  schooling, living conditions, intended
  employment)
• employment history (date of employment, date of
  unemployment, job classification, part time or
  full time work, number of shifts, previous
  classification of employment).

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Hypotheses

• H1 When entering the labor market for the first
  time, the probability of employment is higher for
  graduates in science and technical fields of
  study.
• H2 The employability of graduates is positively
  related with the age of institutions. Graduates
  from University of Ljubljana are more employable
  if comparing with graduates of the similar field
  from other universities.
• H3 Probability of employment is not affected by
  any personal characteristic except individual
  ability.

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Variation of the probability of employment before
or at the time of graduation according to ISCED
fields of education
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Variation of the probability of employment 3
months after graduation according to ISCED fields
of education
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Comparing the variation of probability of
employment before and 3 months after graduation
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A cohort for analysis

• subgroup of graduates who were not employed at
  the time of graduation nor employed during their
  schooling
• Control for different fields of studies, finished
  university, study program, duration of schooling
  before graduation (in years), manner of study,
  gender and living condition
• Calculated probabilities of employment in the
  first three, six and nine months after
  graduation.

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Probability of employment

• Part time female graduate of pre-Bologna type of
  academic study program from the field of Business
  and Administration from the University of
  Ljubljana in 2007 with non specified living
  conditions is around 0,27.
• For the regular student graduating from the same
  field of study the probability of being employed
  in the first three months increases by 0,17
  points depending on specification.

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Variation of the probability of employment in 3
months according to ISCED fields of education
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Variation of the probability of employment in 6
months according to ISCED fields of education
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Comparing the variation of probability of
employment in 3 and 6 months after graduation
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Other results for probability of employment 3
months after graduation

• On average regular students are more likely to be
  employed, but also depends on the field of study
• On average graduates from University of Maribor
  and Gea College but also depends on the faculty
• On average pre-Bologna professional degree
  graduates are less likely to be employed
• On average an addition year of study deteriorates
  the probability of employment
• On average female graduates still have lower
  probability of employment but also depends on the
  field of study
• Living conditions affect the probability of
  employment

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Other results for probability of employment 6
months after graduation

• On average (again) regular students are more
  likely to be employed, but also depends on the
  field of study
• On average graduates from University of Maribor
  and University of Primorska but also depends on
  the faculty
• On average all other programs graduates are less
  likely to be employed
• On average an addition year of study deteriorates
  the probability of employment
• On average the gender does not affect the
  probability of employment but it does in some
  fields of study
• Living conditions affect the probability of
  employment

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Conclusion

• The government does impose balances on labor
  market by allocating tuition free student places
• There is a need of potential miss match study
• There is a need for allocating more financial
  resources for higher education but at the same
  time introduce some changes in the financing
  (introduce a system with quality component)
• Focus on labor market needs

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• Thank you for your attention!