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August 02, 2021

Pandemics and the prospects for higher education in developing countries

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Before the Covid shock hit the world, we argued in 2018 that as the number of secondary school graduates rises, many developing countries would expand their supply of public and private universities or face pressure to do so. Yet several factors, including weak job markets, low-quality university programs, and job–education mismatches, could create challenges. We thus concluded that the rise in supply of university graduates in such a context could exacerbate unemployment, underemployment, and the overeducation of professionals—and this is particularly important in countries with high informality and self-employment rates.

With the pandemic now in its second year and with the likelihood that it will remain a public threat for many developing countries until 2022, prospects have worsened in three structural dimensions: the job market, university quality, and job–education mismatches. The advice for governments to assess the right kind of regulation for college programs thus remains even more pertinent. Most developing economies will come out of the Covid crisis severely weakened in terms of potential output, public and private finances, and human capital accumulation; and already scarce resources for higher education should be guided toward investments with the highest payoffs. The pandemic has revealed the structural problems of many countries, including the vulnerability of the growing middle class, though college diplomas have served as a “safety net” in this crisis.

But the Covid crisis has also brought opportunities to reshape and disrupt college education. Remote learning, if properly introduced, can cut costs dramatically, extend the benefits of higher education to hard-to-reach populations, and reduce job–education mismatches. The university education industry has long been hesitant to adopt disruptive innovation. For instance, online education had difficulty gaining traction before the pandemic, and traditional blackboard lectures were the main medium for college teaching. The pandemic has forced the entire sector to adapt quickly or risk disappearing because of insufficient demand, leading to greater awareness of local, regional, and even global learning opportunities. In this context, a more value-based view of technical and vocational education, not only at universities but also in technical institutions, may act as a powerful driving force pushing developing economies at national and local levels. This is a welcome trend, and two years of disruption seem to have introduced more changes in college institutions than two decades or even centuries of inertia. A future of blended education appears to be part of a new normal, and regulatory agencies should be open to these new opportunities to generate valuable human capital.

© Gustavo Yamada and Pablo Lavado 

Read Gustavo Yamada and Pablo Lavado’s full article: “Labor market consequences of the college boom around the world.” 

Gustavo Yamada is Professor of Economics, Universidad del Pacifico, Lima, Peru, and a Research Fellow of IZA.
Pablo Lavado is Associate Professor of Economics, Universidad del Pacifico, Lima, Peru.

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