Preventing overeducation and graduate surplus

Abstract

Purpose Most Middle Eastern countries suffer from high rates of unemployment and underemployment among university graduates. This condition is known as overeducation and it is observed in many countries around the world. Two countries, Singapore and Hong Kong, have been able to prevent overeducation. The purpose of this paper is to identify political and institutional factors that have allowed these two countries to succeed. Design/methodology/approach The author has relied on published government documents, online short articles and academic publications to collect evidence on higher education policies in Hong Kong and Singapore. The author has also received some valuable insight by e-mail communication with scholars and some government institutions in these countries. In addition, the author has generated tables and charts based on official government statistics from both countries to show the trends in higher education and the labor market outcomes for university graduates. Findings First, in Singapore and Hong Kong, the labor ministry and the private sector industries are able to influence the higher education enrollment policy based on economic demand for skilled labor. Second, in both countries, the political leadership is committed to preventing graduate surplus and has enough political strength to resist populist pressures for increasing the enrollment into higher education. Third, both countries have been able to direct a large number of high school graduates to vocational and two-year associate degrees. Originality/value Overeducation is a very costly and undesirable outcome that leads to a large amount of wasted investment in human capital. It is very valuable for developing countries to learn about policies that have been successfully used by Singapore and Hong Kong to prevent overeducation because the same policies can be used in the affected countries.