Higher education and unemployment: a cointegration and causality analysis of the case of Turkey

This article analyses the short and the long-term relations between higher education and unemployment in Turkey for the period 1960-2007. It chooses the recently developed [autoregressive distributed lag] ARDL cointegration and Granger causality of Dolado and Lutkepohl (1996) methods. While the proxy of unemployment is total unemployment rate, higher education graduates were chosen to represent higher education. The cointegration and error correction analysis show that higher education is one of the factors which increases the unemployment rate both in the short and the long-run in Turkey. In addition, findings of causality analysis reveal that there is a bi-directional causality between higher education and unemployment and support evidence in favour of Plumper and Schneider (2007)'s theory. Overall, the study concludes that, if governments wish to benefit optimally from the higher education graduates in Turkey, they should not invest more in higher education than the economy needs.

Published abstract reprinted by permission of the copyright owner.

This article analyses the short and the long-term relations between higher education and unemployment in Turkey for the period 1960-2007. It chooses the recently developed [autoregressive distributed lag] ARDL cointegration and Granger causality of Dolado and Lutkepohl (1996) methods. While the proxy of unemployment is total unemployment rate, higher education graduates were chosen to represent higher education. The cointegration and error correction analysis show that higher education is one of the factors which increases the unemployment rate both in the short and the long-run in ...  [+] Show more