Evolution of Interdependencies between Education and the Labor Market in the View of Sustainable Development and Investment in the Educational System

Abstract

Education represents the basic pillar of preparing individuals for integration into the labor market, but also is a crucial component of ensuring sustainable development. The purpose of this research was to identify the type of influences existing between education and the labor market in EU member countries in the context of different levels of investment in the educational system. Cluster analysis and the ordinary least squared method were used to identify the type of influences between the indicators characterizing the level of education and the labor market between 2000 and 2021. The empirical results showed that there was a significant negative correlation of the educational dropout rate with the level of employee compensation, number of hours worked by each employee, and their labor productivity, in the countries with the poorest level of educational investment. In the countries with significant investments in education, getting a graduate diploma and participating in vocational training programs led to a better compensation of employees and a higher employee productivity while the financial aid given by the state for pupils and students reduced the number of worked hours, brought down unemployment amongst people with primary and secondary education and, last but not least, increased the employment rate for higher education graduates. An average level of educational investment led to negative influences between early-stages and employees’ payment level and real labor productivity, while becoming involved in educational activities and participating in vocational training programs increased their rates of remuneration and real productivity. A significant impact of higher education graduates on both increasing unemployment rates and falling employment rates was noticed as has been identified in other studies.

Analysis of Economic, Education, and Skill Factors against High Unemployment: A Case Study in West Java Province

“…03, March 2023: pp. 100-108 Strategic investments in education and training programs tailored to the needs of the local job market can contribute to a skilled and work-ready workforce [24]. The negative association between education levels and unemployment rates is in line with existing literature, which emphasizes the importance of educational attainment in reducing unemployment [42].…”

“…Higher educational attainment is generally associated with lower unemployment rates, known as the "education premium" [23]. However, studies have shown that a mismatch between educational qualifications and job requirements can lead to underemployment and contribute to higher unemployment rates [24]. Understanding this dynamic is crucial for addressing unemployment in West Java Province and developing targeted interventions.…”

Changing the Level of Education and Career Choice Depending on the Socioeconomic Status of the Family: Evidence from Azerbaijan

“…Development effect. The education level of people affects the level of savings, investment rates and investment areas, employment status, income distribution, and many macro variables in the economy [40][41][42][43][44]. At the same time, the successes achieved in educational life increase the productivity of individuals by raising their living standards, increase the opportunities for growth and innovation, prevent social corruption and crime, and decrease public health expenditures and social assistance needs [45][46][47][48].…”

Investments in Education and the Question of Guaranteeing Its Quality: The Educological Aspects

“…Дослідження науковців з різних країн підтверджують, що державні інвестиції в освіту та навчання мають багато переваг і позитивних впливів на економіку та суспільство через підвищення кваліфікації та інтелектуального рівня працівників, тим самим зменшуючи безробіття та бідність у країні (Tudor et al, 2023;Ukaj et al, 2023). Освіта підвищує продуктивність і креативність людей, а також сприяє розвитку підприємництва та передових технологій, розвиваючи капітал, заснований на знаннях (Dia Kamgnia and Bergaly, 2022;Seidl, 2022).…”