Is Higher Education Expansion Related to Increasing Unemployment Rates?

Abstract

A wide range of rationales can be used to expand participation in higher education. It is commonly believed that a highly educated workforce serves as a primary driver in elevating the productivity and efficiency of the industrial sector in general. Empirical evidence even suggests that over a lifetime, university graduates earn more than those with other educational attainments. 1 However, an emerging counter-argument states that the supply of graduates might exceed the demand as there are not many graduate-level job vacancies. Against such a broad context, this article adopts longitudinal and comparative stances to investigate the extent to which higher education expansion is related to the unemployment rate in three East Asian societies: Japan, South Korea, and Taiwan. Our empirical data show that the massification of higher education does matter, particularly beyond enrollment rates of more than 50%. Although universal access to higher education provides a more highly skilled workforce to knowledge-based economies, it might also lead to a higher unemployment rate, particularly in South Korea and Taiwan.