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Does the Type of Higher Education Affect Labor Market Outcomes? A Comparison of Egypt and Jordan

Ragui Assaad (), Caroline Krafft and Djavad Salehi-Isfahani ()

No 826, Working Papers from Economic Research Forum

Abstract: In Egypt and Jordan there is a substantial mismatch between the output of the higher education system and the needs of labor market. Both demand and supply-side factors could be driving this mismatch. This paper tests a key supply-side issue, whether differences in institutional structures and incentives in higher education affect students’ employability. Specifically, does the stronger alignment of incentives in private, as compared to public, higher education generate more employable human capital and better labor market outcomes? The analysis examines the impact of higher education type on numerous outcomes, while controlling for pre-enrollment characteristics. The results demonstrate that supply-side issues and incentives have little impact on labor market outcomes. Family background plays by far the largest role in labor market success. Proposed reforms to higher education often suggest increasing the role of the private sector. Our findings indicate that this approach is unlikely to improve labor market outcomes.

Date: 2014-05, Revised 2014-05
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Published by The Economic Research Forum (ERF)

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