Higher Education Expansion, Graduate Unemployment, and Brain Drain: An Economic Analysis of Pakistan’s Labor Market

Resumo

This paper analyzes the paradoxical increased education growth of Pakistan and the consequences of the same in brain drain and graduate unemployment. This is one of the reasons why the results of a Cost Benefit Analysis (CBA) have shown that the economic cost of graduates’ production exceeds the returns. The structural dynamics of two frameworks graduate unemployment and brain drain were tested using the Auto-Regressive Distributed Lag (ARDL) model. The results demonstrate that even with less growth of GDP, and lower marginal productivity, employment creation, graduate output raises unemployment in the short and long-term significantly. The concept of brain drain shows that the remittances and graduates are important elements of migration that may be regarded as the push-pull forces in the labor market. Stability and diagnostic test entail model reliability. Overall, this evidence suggests that the absence of labor absorption and the uncontrolled expansion of affiliated colleges increases domestic unemployment and migration abroad. According to the study findings, to transform human capital into a sustainable driver of development, one should harmonize higher education policies with the labor market requirements, encourage employment intensive development, and limit uncontrolled institutional proliferations.