Effect of Tertiary School Enrollment, Education Expenditure and Student-Teacher Ratio on Unemployment in Bangladesh: A VECM Approach

Although Bangladesh has been performing well in terms of macroeconomic development, the impact of tertiary education on confronting unemployment problem has largely been neglected over the years. The objective of this study is to examine the effects of tertiary school enrollment, education expenditure as share of GDP and pupil-teacher ratio on the level of unemployment in Bangladesh from 1999 to 2023. The time series data for all the variables was collected from the World Bank databank. Johansen cointegration test and Vector Error Correction Model (VECM) has been employed to investigate the long-run equilibrium and short-run relationship among the four variables. The empirical result suggests that there exists cointegration among the variables and the impact of education related variables is mostly a long-term phenomenon. While increasing university enrollment has a negative rather than positive impact on employment level, both education expenditure and pupil-teacher ratio have a negative impact on unemployment.