THE ECONOMICS OF EDUCATION : EDUCATION AND EMPLOYMENT IN SINGAPORE

Abstract

The economics of education covers a wide range of topics. The focus of analysis in this study is the relationship between education and employment. The literature review integrated in t is study provides an overview of some of the other areas which have been given prominence in recent research and publications in the economics of education. In order to analyse the links between education and employment in Singapore, it is necessary to appreciate the nature and structure of Singapore's education system. Hence, a summary is provided of its history, development and structure, as well as some of the problems facing the education system. The rising expenditure on education is also discussed. The government, realising the importance of a good education system, has been increasing the provision of expenditure for education over the years. Thus, we find that education has become a major item of public expenditure in Singapore. Some of the methodological issues pertinent to the analysis of the relationship between education and employment are discussed in Chapter m. The analysis in Chapter IV confirms that one of the main criteria used by employers to recruit new entrants into the occupational structure is the level of education. That is, minimum educational entry requirements are usually set for each occupation. It has been observed that tertiary or post-secondary educated workers have a better chance of obtaining a high-level job than the rest. There is also a close correlation between an individual's educational attainment and his or her level of earnings. The widest income differences prevail between tertiary educated workers and post-secondary educated workers. Income differences between males and females are also found to be in existence. This chapter includes an examination of the duration and incidence of unemployment. The duration of unemployment is found to be higher for workers with lower educational qualifications. The analysis of the incidence of unemployment shows that primary and post-primary educated workers have had the highest unemployment rates while, post-secondary educated workers have had the lowest unemployment rates. An international comparison with some selected countries, shows that the educational attainment of the Singapore workforce is below that of the United States and Japan. However, it is within the reach of Singapore to match the educational attainment of the NIC's like Taiwan in the near future. The Chapter V narrows the analysis to the relationship between higher education and employment. From the regression analysis performed in this chapter, one could conclude that the graduate labour market performance is explained to a great extent by macroeconomic conditions with graduate output, a supply constraint, playing a smaller role. The macroeconomic indicators used in the analysis include the overall unemployment rate, wages, and the GDP growth rate. The analysis reveals that the above macroeconomic indicators explain the variations in the graduate employment rates of non-professional degree holders and female graduates better than variations in the employment rates of professional and male graduates. This chapter also provides a discussion on the basis of selection of graduates into the public and private sectors. The selection of graduates into the public sector is based on the screening hypothesis while the selection into the private sector is based on the human capital theory. An analysis of the median starting salaries of male and female graduates from the various disciplines proves that there is sex discrimination in the graduate labour market. A similar analysis of the starting salaries of professional and non-professional degree holders profess that professional degree holders obtain higher starting salaries than nonprofessional degree holders. This main reason for such differential is the longer time spent on acquiring specialized skills by the professional graduates. The last chapter provides a summary of the findings.