EDUCATION: THE DETERMINANT OF EMPLOYMENT IN BHUTAN

Abstract

Education plays an increasingly important role in preparing new labor market entrants for the workforce and providing skill upgrading throughout the working career. One of the basic criteria by evaluating the qualitative dimension of labor market analyses is the educational attainment. The study’s aims are two folded: first, it investigates whether the level of educational attainment has affect on employment status among Bhutanese employee when controlling age, gender, area of residence. Second, the rates of unemployment compare the result of youth sample (15-29 years) with an older sample (above 29 years) and investigate whether there is change in pattern in the employment status. Where data are available, this study also examines whether there is parity between male and female in the educational attainment and labour force participation. For this study, data from the National Labour Force Survey 2012 with sample of 3, 36,745 in the total labour force in the country and the binary logistic regression analysis was used to examine the net effect of each explanatory variable (sex, age, place of residence and level of educational attainment) on employment. The labour force populations with higher educational attainment are less likely to be unemployed than the labour force with lower educational level or with no education. Empirically found that education is highly significant at 1% level of significance and as the level of education goes on increasing the odds of being unemployed is 2 to 4 times more than the odds of no education into the labour market. From the result, it is concluded that the youth aged 15-29 years are more unemployed with 5% comparing to the adult aged 30 years and above at P-value <0.000 and statistically significant. The education is found to be the most important factors which determine employment besides age which hinders labour force population in getting employed.