Schooling Without Absorption: Education Attainment and Youth Unemployment in a Transfer Economy

Abstract

A composite development index can rise while the outcomes it is meant to summarise do not. This study decomposes the human development index of one province against the national figure and against seven comparator provinces, and reads the result against published labour force and youth development statistics. Four findings follow. The province's index of 76.23 exceeds the national 75.90, and the excess is produced entirely by the education components: expected years of schooling is 8.3 per cent above the national value and mean years of schooling 9.7 per cent above, ranking first and second among eight provinces. On the two components measuring what schooling is expected to produce, the province ranks seventh of eight: life expectancy 1.3 per cent below the national value and adjusted per-capita expenditure 12.6 per cent below. The labour market shows the same asymmetry at entry: open unemployment is 21.59 per cent among those aged fifteen to nineteen and 16.75 per cent among those aged twenty to twenty-four, against 5.64 per cent across all ages, so a cohort supplying 15.2 per cent of the labour force carries 48.6 per cent of the unemployed. And the deterioration is recent: the employment domain of the youth development index fell from 40.00 to 35.00 between two survey rounds while the education domain held at 76.67. A transfer-financed expansion of schooling raises the index without changing the structure that would absorb its graduates.