The impact of public education expenditures on graduate unemployment: Cointegration analysis to Ethiopia

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dc.contributor.authorDachito, Amsalu
dc.contributor.authorAlemu, Minyahil
dc.contributor.authorAlemu, Berhanu
dc.date.accessioned2021-08-27T09:11:05Z
dc.date.available2021-08-27T09:11:05Z
dc.date.issued2021en_US
dc.departmentİstanbul Ticaret Üniversitesien_US
dc.description.abstractUnemployment is amongst most pressing economic challenges the Ethiopian economy has long been experiencing. Though the country succeeded in targeting overall unemployment most recently, graduate unemployment continued trending at higher rates over the years. We examined the impact of government education spending on the rate of graduate unemployment in Ethiopia, using yearly series of data over the periods spanning from 1991to 2019. The results of Augmented Dickey Fuller test revealed difference stationarity for all series of interest; while the suggested order of integration was one. The results of Johnson’s cointegration test indicated the existence of long-run equilibrium relationships among the variables entered the test model. In determining the impacts of inflation rate (CPI), economic growth (RGDP) and public education spending on graduate unemployment, we employed Vector Error Correction Model as it enables us capture the short-run and long-run outputs instantaneously. According to VECM regression results, inflation rate and expenditure on education were found to have significant impact on the long-run growth rate of graduate unemployment. While the inflation rate contributed positively, government expenditure has negative influence on the rate of graduate unemployment towards validating the Keynesian theory of employment. Besides, the impacts of both variables were found to persist in the short-run. Both are estimated significant and consistent in sign in the short-run. However, economic growth was found to have a trivial role in explaining the rate of graduate unemployment in both the short-run and the long-run periods. Moreover, the results of VEC causality analysis revealed a significant unidirectional causality running from economic growth towards public funds available for financing education; but no causality was suggested in reverse. We recommend a drastic measure to advance the education sector through suitable investments in a manner that will help in skills development, productivity enhancement and entrepreneurship growth.en_US
dc.identifier.endpage17en_US
dc.identifier.issue1en_US
dc.identifier.startpage1en_US
dc.identifier.urihttps://hdl.handle.net/11467/5029
dc.identifier.volume7en_US
dc.language.isoenen_US
dc.publisherİstanbul Ticaret Üniversitesien_US
dc.relation.ispartofInternational Journal of Commerce and Financeen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Başka Kurum Yazarıen_US
dc.rightsinfo:eu-repo/semantics/openAccessen_US
dc.subjectCointegrationen_US
dc.subjectGraduate unemploymenten_US
dc.titleThe impact of public education expenditures on graduate unemployment: Cointegration analysis to Ethiopiaen_US
dc.typeArticleen_US

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