The Misleading Perspectives of Tertiary Education

Educational reforms will go in vain if they are not associated with institutional reforms, particularly in the labor market.

Pondering over the inclusive macroeconomic scenario of Bangladesh, we might identify few general misconceptions that are responsible for misleading the students and in due course for retarded economic development.

Let us first consider why there is a surging influx of students in the universities in Bangladesh. The primary reason behind opting for tertiary education is decent employment and by 'decent' we are referring to white collar jobs which appear to be a symbol of social status in our society. In other words, the job requirements are compelling a student to enroll in universities although there are not sufficient opportunities for all. Another reason for the increasing number of graduates is 'social status'. For instance, higher education has become a common criterion for marriage proposals; if a person is not a graduate, he or she is considered of lower social status. Again, students who are expecting to join the business of their ancestors or trying for a start-up are also entering universities only to maintain the social status. A huge amount of money, resources and most importantly, time are being wasted just for the sake of social inertia. Finally, a handful of students have the real purpose to 'learn' and utilize the lessons in a future career. This is where our system differs from the developed nations; our country is producing graduates who are not at all interested in doing so while others are only encouraging students to enroll in universities only if they have particular interest in that sector.

Now we ask why the increasing enrollment rate at tertiary level is posed as a problem here. Apparently, higher enrollment is better as more people are becoming educated, but the devil always lies in the details. Have you ever questioned why we are not getting better results despite the insurgence of students at tertiary level? There are several reasons for such an anomaly. First, there is a mismatch between the subject choice of students and seats available at the universities. Many students end up studying something in which they do not have any interest, or they never expect to use those lessons in future. Years of struggle and resource allocation get lost in void. Delving further into the issue, this mismatch of choice and graduate program is encouraged by current job requirements that usually ask for a Bachelor degree and in some cases, Master degree. Furthermore, there is barely any collaboration between industry and educational institutes which induce information asymmetry. Since the students are unaware of the specific skills required in their dream job, they opt for basic skills only and thus create a skill gap. The ultimate result is either graduate unemployment or underemployment. It is more alarming that graduates are getting underpaid as they get jobs below their expectation level which compels them to look for a job that goes beyond their educational expertise. For example, engineers are doing MBA to join the corporate sector, arts faculty students are preparing for civil service due to lack of decent job opportunities and students from vocational education are searching for opportunities abroad for higher salaries.

This chain of events has created a vicious cycle. The more students are enrolling in tertiary education, the stricter the firm gets about job requirements. The higher the job requirements are, the more students tend to attend higher education. While only a Bachelor degree was enough for entry level jobs at any firm in earlier days, now the bar has been raised by some firms to a Master degree. Eventually, more resources are spent for the same skill acquisition without raising productivity or expertise. Therefore, the mechanism of education is failing along with its reforms since the foundational problems lie in the purpose of education that relies on institutional reforms in the labor market. Imagine if the job requirements were lower, students could enter the labor market earlier without the compulsion of higher education. This would save sufficient resources to utilize where it is most necessary while avoiding forcing someone to learn something redundant to his career. Like many other countries, tertiary education will only be required for those who would require specialization. It is to be noted that there are several white-collar jobs that require specific skills which can be delivered through training programs instead of a 4-year university education.

The final question is why the industry is going in circles with the vicious cycle. What would you do as an employer if you had the opportunity to hire a person with university education or a person without education with the same salary? A rational person will definitely choose the person with higher education. In our country, the abundance of graduates has created surplus labor which is impeding the adoption of reforms in job requirements. The basic demand-supply mechanism is suggesting a distortion of the equilibrium and precluding any institutional reforms unless the market is brought back to equilibrium. It would be an arduous challenge to implement such a reform without the combined effort of both public and private sector. One initial step could lie in the formation of a minimum wage law and reformation of salary structure. The most modern growth theory indicates that long-run growth can be ensured by innovation which can be promoted through investment in human capital or in other words, enhancing education outcomes. The recent Nobel prize in Economic Sciences recognizes the role of institutions in fostering long-run growth. If we connect these two pieces, we find institutional reforms to be of substantial importance in promoting innovation as well as macroeconomic development capitalizing the human capital. 

There are many other determinants required to develop the education sector as well as the overall economy. While the student-teacher ratio is significantly higher compared to other countries, the expenditure on education is terribly low. According to the World Bank estimates, the expenditure on tertiary education in Bangladesh has been hovering around 2% of GDP on average for the past two decades. Despite other factors, the education sector will not advance on the right course unless the vicious cycle of enrollment and job requirement is broken. If this issue is not addressed properly, the inefficient education and labor market will become shackles that will keep grinding us to our downfall and I believe, no mother of dragons would be able to break that chain when the situation is out of control.

Abir Hassan is a lecturer of Economics at Bangladesh University of Professionals, a public educational institute that aims at crafting and fostering potential graduates as well as qualified persona to turn out to be the future leaders. He graduated from Bangladesh University of Professional with honors and master's degree in economics. His primary area of interest lies in behavioral economics and applied econometrics although his alacrity for multidisciplinary expertise knows no bounds. Abir Hassan can be contacted via abir.hassan@bup.edu.bd.