DETERMINANTS OF UNEMPLOYMENT AMONG SRI LANKAN UNIVERSITY GRADUATES

A SUPPLEMENTARY ANALYSIS USING LOGISTIC REGRESSION MODELS Note: The estimates and the interpretations given in this supplementary analysis are solely for academic purposes and such information may not be used for generalized inferences on the prescribed issues. Especially the estimates for degree of associations between the variables should be dealt with caution due to high error coefficients.

4. 1 Introduction.

The survey report (2011 Dec Release) on the Career Outcomes Survey for Sri Lankan University Graduates (2010) has provided descriptive analysis on the distribution of employment outcomes of the 2,112 graduates who had participated in the survey.

In addition, the same report reveals a number of determinants of graduates employability: in respect of academic, personal, parental, previous employment and job search aspects; through simple measures of association (Chi-square and Cramers V statistic).

This supplementary report, based on the same determinants, provides a detail analysis (using logistic regression models) on the degree of association between such determinants and the employability of the Sri Lankan university graduates, taking into account the other variables as well.

Re-defining the Employability

As mentioned in the Survey Report, the outcomes of the survey in respect of the variable Current Activity1 classified into 5 main categories: Economically
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Which has been inferred through the declarations made by the respondents for particular questions in the questionnaire.

Inactive (23), Unemployed (1459), Self-employed (35), Employed (584) and Employer (11). Although the said classification provides a comprehensive picture on the economic status of all the graduates who were taken for the study, the comparatively smaller numbers of observations for Economically Inactive, Self-employed and Employer categories obviously increase the error variance in an econometric analysis and, in turn, hinder the separate estimation of the effect of covariates on these outcomes.

Therefore, for this logistic regression analysis, the employability of graduates is re-classified: whereas the variables Inactive and Unemployed are amalgamated as Non-employed* and the other 3 categories jointly considered as Employed*2. Accordingly, a new binary variable: Employed is introduced, where zero (0) values represent both the Economically Inactive and Unemployed whilst non-zero (1) values represent the other three categories.

Logistic Regression Model

Taking Yi as a binary variable, where,

In classical explanation, the logistic regression model can be derived as follows:

and

then the Logistics regression model is,

Here, the Employed* would be defined as those who having an own source of income, which corresponds to the classical definition of Employment in the Labour Force Surveys..

In other words, the logistic regression model is:

where,

As determined above, the new variable Employed is a binary variable where the possible outcomes are either being employed (taken as 1) or being nonemployed (taken as 0).

University Education and Graduates Employability

The determinants of graduates employability (in respect of the academic performance, personal traits, parental facts, employment history and job seek behavior of the graduates who had responded) will be regressed against the newly defined variable Employed so as to determine to what extent such associations affect the career outcomes of the Sri Lankan graduates taking into account the other factors.

Accordingly, the logit coefficients and corresponding marginal effects of Academic variables are given in Annex (1). The Column 1 denotes the logit model with the dummy variables of universities as regressors3, which illustrates significant effects on the employability of the graduates by the University of Wayamba, Peradeniya and South Eastern University, in compared to the University of Colombo (the omitted category). Those who were graduated from the University of Wayamba have shown a 21.9 percent higher possibility
The Universities are being taken as dummy variables and the University of Colombo is omitted to avoid collinearity. Accordingly, the results given in Annex (1) for each other university are the relative effects compared to the effect of University of Colombo. This method is common for other dummy variables.
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of being employed than the graduates from the University of Colombo, whilst the employability of graduates from Universities of Peradeniya and South Eastern is 13.4 and 25.7 percent lower than that of University of Colombo.

On the contrary, with the introduction of other academic variables the significance of university factor reduces considerably. Eventually, at column 7, where the Special subject streams are also incorporated4, the Universities of Kelaniya, Peradeniya, South-Eastern and Sabaragamuwa have significant negative impacts on the graduates employability that have decreased the odds of employed graduates by 23.4, 20.5, 25.4 and 18.2 percent5 than that of graduates from University of Colombo. In respect of General degree holders (Column 8), only the University of South-Eastern has shown a significant negative impact of 13.2 percent with compared to University of Colombo.

When taking all the academic factors, Bachelor in Education and LLB special degrees have significantly increased the graduates employment odds by 67.7 and 44.3 percents respectively, in compared to the Bachelor of Science (Science) Special degree holders. Although this outcome seems to be critically influenced by the limited number of respondents from B.Educ. and LLB degrees, in general Bachelor in Education degrees are followed by those who are already engaged in employments related to education.

Amongst the general degrees, Bachelor of Arts degrees have significantly decreased the odds of employed graduates by 33.1 percents than the Bachelor of Science (Science) general degrees.

Employment outcomes of the special degree holders who passed out in 2007 are significantly higher (by 20.8 percent) than that of 2009 graduates; while for

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Whereby the model has focused into Special Degree holders only. As per the Marginal Effects given in Annex 02.1

general degrees the comparative advantages are with both 2006 and 2007 graduates (of 15.8 and 11.7 percents respectively).

Meanwhile, learning in Sinhala and Tamil mediums have significantly reduced the odds of employability of special degree holders by 26.3 and 16.0 percents respectively, compared to English medium graduates. The General degree holders have also significantly lost the employment odds by 14.1 and 18.0 percents due to studying in Sinhala and Tamil mediums respectively.

The odds of employed graduates who secured a First class for their special degree are significantly higher than the other passing grades; whereas the Simple, Second lower and Second upper passes have reduced the employability by 18.5, 11.3 and 13.6 percents respectively. However, such degree class has no significant impact on the employability of general degree holders.

Most interestingly, neither the special degree subjects nor the general degree subjects have any significant effect on odds of employment among the graduates considered.

Personal Traits and Graduates Employability

Similarly, when the individuals personal factors: such as Age, Gender, Residence District are considered as given in Annex (02), it can be inferred that both Age and Gender have very significant impacts on employability of graduates.

In considering the Column 7 of Annex (02) that incorporated all the key factors related to personal traits as discussed in the Survey Report; the odds of employed graduates had increased by 2.7 percent for each additional year of

age, while being a female has reduced the odds of employability by 14.8 percent.

Another salient observation that found by comparing the coefficient in Column 7 in Annex (02) is that certain Residence districts as well as the District sat for (G.C.E.) A/L6 have significant impacts on the graduates employability. This indicates that, when the personal traits considered alone, the graduates career outcomes may differ based on their current residential district, and also by the district where they qualified for university admission.

Amongst the Residence districts, Ampara, Anuradhapura, Kandy and Ratnapura districts have shown negative impacts on employability odds of graduates, in compared with the Colombo district (omitted dummy), whilst Vavuniya district has shown a higher odds of employment than Colombo. The latter observation might have affected by the insufficiency of responses from the Vavuniya district (Only 7 graduates had responded out of whom 3 were employed: thus the coefficient of error is also considerably high).

Amongst Districts where the respondents sat for G.C.E. Advanced Level, Batticoloa, Galle, Gampaha, Hambantota, Kalutara, Kurunegala, Matara and Trincolamee districts have shown significantly lower odds of employed graduates than the same of Colombo district.

As per the logit model in Column 7 (Annex 02), the possession of any postgraduate or professional qualifications has significantly increased the odds of employed graduates, by 14.6 and 9.9 percents respectively in compared with those who do not possess such qualifications. However, the possession of the Other qualifications: such as English and IT, have resulted in a significant decline in graduates employability against their counterparts by 5.3 percents.

G.C.E. Advanced Level examination is the basic entry qualification for the University entrance.

This may be either caused by the effects the sampling procedure (if most of those who obtained such qualifications and succeeded in getting employments might not have responded for the survey) or because the graduates had followed certain Other qualifications that had not resulted in any

employability development but only a loss of time that could have invested even in an effective job search.

Other Factors affecting Graduates Employability

Considering the logit model that accommodate all the factors related to parents data taken in this study (as given in Column 4 of Annex 03); it is observed that most of the factors related to fathers employment and educational background such as Employed sector, industry and educational qualifications that had shown significant relationships to graduates employability in earlier logit models (column 1, 2 & 3) have been found with insignificant associations with the introduction of additional factors on mothers background (in Column 4).

Accordingly, in last logit model (column 4), the only significant influences on graduates employability incurs when their fathers are either employed in Private Sector or having education of Masters Degree or higher. Private sector employed father has increased the odds of graduates employment by 10.5 percent than that of father in public sector. A Masters/Phd holding father increases the employability of graduates by 31.2 percent than a father with educational attainment below G.C.E. Ordinary Level.

The odds of employment amongst graduates are significantly decreased by 17.7 percent when their mothers are being employers than those whom mothers are currently employed. This may be an indication of the generosity of mothers who are with own ventures that supports the graduates for long-term job search. In addition, the graduates employability has significantly increased by 12.0, 14.7 and 14.0 percents, when their mothers had educational qualifications at G.C.E.

O/L, A/L and Degree levels respectively. Apart, mothers possession of Other qualifications (that had not been classified in this study) has significantly increased the odds of employed graduates by 36.9 percent.

As per the summary table at Annex (04) of logistic regression against employment history of the graduates; for each additional year of an individuals previous job experience the odds of his employability increases by 1.1 percent. In addition, those who had their previous employment in private sector have significantly less likelihoods (of 100 percent) of being employed than those who had been previously employed in public sector.

Moreover, the graduates who had to quit their former employment because of the completion of the contract period or termination of job, have found difficulties in finding subsequent jobs, whereas the odds of employment amongst them has decreased by 4 percent than that of those who quitted their former jobs under health or family constraints.

In terms of Annex (05), although the variable Job seeking period has shown a highly significant relationship to graduates employability, the corresponding marginal effect illustrates that the job search prior to their graduation has decreased the odds of employed graduates by 4 percent only.

However, the possibility of being employed has been significantly reduced with the extension of graduates job search in compared with those who secured an employment by a job-search less than 3 months. Especially, with the extension of their job search beyond 12 months, the odds of employment have been declined sharply by 20.1 percent compared to those who had job-search less than 3 months.

Another interesting finding of this study is that those who had rely more on governments recruitment exams as the preferred job seeking method have

found themselves losing odds of employment by 3.6 percent, while those who used social networks have 2.3 percent higher possibility of being employed than those who did not used the such methods.

A Joint Analysis of the Key Factors in explaining Graduates Employability

As noted in the Survey Report, the number of graduates who declared their previous employments was only 675 out of 2112 total sample. Moreover, the relevant details such as employed sector, industry, permanent/temporary nature and part/full-time basis, had been considerably low. Therefore, the variables related to the past employment behaviour were not taken as regressors for this logistic study. In addition, the variables related to Job seek behaviour are also omitted from the logit model, since the declarants of such job seek behaviour seems to be more biased towards unemployed graduates. Consequently, the employment outcomes of the responded graduates, which were simplified into the binary variable Employed is regressed below against the key variables related to academic, personal and parental factors.

The data set was categorized in terms of the Specialty, so as to avoid data losses due to missing values for opposite subject streams. The outputs (Coefficients and marginal effects) of this full regression model are given at Annex (06).

According to the significance of coefficients, the responded graduates who possess special degrees have indicated the following trends. (I) Universities of Kelaniya, Peradeniya and South-Eastern have shown odds of employment among the responded graduates significantly lesser than that of the graduates from University of Colombo (of 25.6, 28.5 and 26.4 percents respectively)

(II)

The Bachelor in Education and Bachelor of Science (Management) special degrees have significantly increased the odds of employed graduates by 69.0 and 38.0 percents than those with Bachelor of Science (Science) degrees.

(III)

The special degree holders who graduated in year 2007 and 2008 have significantly higher odds of employment, of 34.7 and 29.5 percent compared to that of graduates passed out in 2009.

(IV)

The Special Degree graduates who followed their study programs either official languages (Sinhala or Tamil) are deprived of

employability, whereas the respective odds of employed graduates are less than that of English medium graduates by 39.4 and 25.9 percents respectively. (V) The Special Degree graduates who obtained Simple Pass or Second Class (lower division) pass, instead of a First Class; increase the threat of being unemployed by 25.4 and 19.3 percents respectively. (VI) Applied Science and Food and Nutrition subject streams have yielded comparatively higher odds of employment, by 35.6 and 44 percents than that of Natural Science subject streams. (VII) Female graduates who hold special degrees have an odd of being employed less than that of male special degree holders by 28.4 percent. (VIII) The graduates who possess special degrees and reside in

Anuradhapura, Jaffna and Ratnapura districts have significantly low rates of employment (33.3, 35.1 and 44.1 percents respectively) than that of Colombo district (omitted), while those who reside in Trincomalee district have shown a 71.3 percent higher employability. (IX) The special degree holders who had sat for G.C.E. A/L in Anuradhapura district show a significantly higher odds of

employment than that of Colombo district (of 65.5 percent), while Gampaha district shows a negative impact (of 26.5 percent).

(X)

The possession of a postgraduate qualification (either a Master or a Phd) in addition to the special degree increases the odds of employment by 18.2 percent, while professional qualification would increase the employability by 12.4 percent.

(XI)

None of the parental factors has a significant impact on the employability of special degree holders; except the fathers educational level at G.C.E. O/L that reduces the employability by 14.0 percent than those whom fathers with even lesser education.

In regard to the General degree holders (996 out of 2112 graduates responded for the study), the employability variations are as follows. (I) There is no significant impact by the any of the universities (taken into the study) on the employability of the General degree holders. (II) Being a Bachelor of Arts (general) degree holder reduces the odds of employability by 58.2 percent than a Science graduate. (III) The (general degree) graduates who passed out in 2006, 2007 and 2008 have significantly higher odds of employability than those who passed out in 2009 (by 41.2, 23.4 and 27.3 percents respectively). (IV) The Tamil medium general degree holders find significant difficulties in obtaining employments than English and Sinhala medium graduates. (Odds of employed Tamil medium graduates are 22.6 percent less than the same of English medium graduates) (V) Neither the Subject stream nor the Degree class (First, Second upper, etc) has any significant effect on employability outcomes of general degree holders. (VI) Being a female reduces the employment opportunities for general degree holder by 22.1 percent. (VII) Those (general degree) graduates who reside in Anuradhapura, Galle, Hambantota, Kalutara, Matara, Puttalam and Ratnapura districts find higher odds of employment than those in Colombo district (of 85.4, 74.5, 81.0, 94.0, 76.3, 89.1 and 85.3 percents respectively).

(VIII) The general degree holders who had sat for G.C.E. A/L in Galle, Gampaha, Kegalle, Matale and Matara districts have comparatively lower possibilities of being employed than those who were from Colombo district (of 29.9, 20.0, 23.0, 26.2 and 28.3 percents respectively). (IX) Neither professional nor postgraduate nor Other (unclassified) qualifications change the employability of general degree holders significantly. (X) None of the parental factors other than their educational levels has any significant impacts on the employability of general degree holders; the odds of employed graduates increases by 26.6 percent when their fathers having degrees (than those whom fathers with education below O/L). (XI) Interestingly, the employability of general degree holders has

significantly lowered by 21.8 percent when their mothers were with Masters or Phd qualifications. (XII) Odds of employed graduates increased by 66.6 percents when their mothers are having other (unclassified) qualifications than those whom with education below O/L.

In terms of the WALD test for significance of the two logit models discussed above, the same two models are satisfactorily fit.

Concluding Remarks

According to the analysis given in the survey report, the academic factors: University, Degree type, Graduation year, Medium, Degree class, and both Special and General subject streams were found significantly associated (through the Chi-square tests). However, through the logistic regression analysis (in this supplementary analysis), it was found that only certain degree

types, graduation year, medium are significantly affect the employability of the general degree holders who responded. Meanwhile, for those who possessed special degrees; the University, certain degree classes and certain subject streams make significant changes in their employment outcomes in addition to the factors mentioned above.

In addition, in the Survey Report, the personal factors including age, gender, residence district, district sat for G.C.E. A/L, Postgraduate qualifications, Professional qualifications and Other (unclassified) qualifications were found significantly related to the career outcomes of the graduates. When the logistic regression was run in respect of these personal factors, it was found that age, gender, certain residence districts, certain districts from which the respondents had sat for G.C.E. Advanced Level, postgraduate and professional

qualifications are significantly related.

Amongst the other related factors taken for the study, all parental factors considered including both parents Current activity (inferred) and thier Current Status (declared), Employed Sector and Industry, parents Educational attainment have found with significantly high relationships to the graduates employability. However, in terms of the logistic regression, only some educational qualifications of either father or mother were found as significantly affecting the career outcomes of these graduates.

Out of the factors related to graduates former employment behaviour: the fact whether such employment was before or after graduation, employment duration, sector and industry, permanent/ temporary nature, Full/part- time nature and reason for quitting the such previous jobs, are highly correlated to graduates current economic activity, in terms of the Chi-square tests mentioned in the Survey report. Contrarily, only the previous employment period, employed sector and certain reasons for quitting former job are found as relevant through the logistic regression model.

In relation to the job search, the Survey report reveals that the fact whether such job search before or after the graduation, duration, and several job search methods were found as significantly associated with the current activity of the graduates responded. Out of these determinants, the logistic regression models explain that only the Job seek period, duration, a few methods were found significantly related to the current economic activity.

Therefore, it can be concluded that the career outcomes of the graduates taken for this study have been critically affected by several academic as well as personal, professional and parental factors in addition to their own job search behaviour.