The following is a comment by Yeoh Lam Keong, former Chief Economist of the Government Investment Corporation (GIC), on recent remarks by the Education Minister on limiting the intake of undergraduates to 30-40 per cent of each student cohort.
Mr Yeoh, who addressed the points raised by Mr Ong in his comments, has allowed TISG to re-publish them here.
On the surface the argument that excess supply of graduates aggravates youth unemployment seems commonsensical and reasonable
However the issue is more complex and bears rethinking by policy makers.
First much of global youth unemployment is due to lack of demand in the economy. Youth suffer higher rates because of inexperience but overall lack of jobs is the problem. This is so in both in many parts of Europe and developing countries like India or Indonesia. Good industrial and macroeconomic management rather than reducing tertiary education is the real solution here.
Second much of youth unemployment is caused by the poor quality of the degrees of tertiary institutions and their lack of relevance to workplace skills rather than the degrees per se.
For many faster growing Asian developed economies, it’s been well documented that youth unemployment coexists with severe skill shortages in many sectors.
The main problem lies in the quality not the quantity of tertiary training and degrees and this includes graduates from our own “highly ranked ” universities.
Third, the numbers indicate that in comparable economies, it will take much higher rates of graduate education before excess supply becomes the major problem. South Koreas graduates form 80% of their cohorts but their recent youth unemployment numbers ( 9.5% in 2016 ) is lower than the 10.9% in Singapore with only 30 % plus graduates.
The problem for us and Korea is thus more improving the relevance and quality of tertiary education than reducing the quantity. High PISA scores are only part of the answer. Some of the highest skills shortages are reported in precisely the countries with highest PISA scores like China, Korea and Singapore.
Reducing the quantity of tertiary graduates in fact becomes an excuse not to have thorough curriculum reform to make education at all levels – primary, secondary and tertiary – more relevant to the modern economy
In addition the knowledge and skills intensity of the new knowledge economy is increasing rapidly. To compete in this requires more and better quality tertiary education that meets the economies’ rapidly evolving skills and education needs rather than limiting the supply of what is an already outdated tertiary training.