Educational Labor Market Segmentation
Urban labor markets in developing countries are heavily segmented by formal education level, creating sharp disparities in entry rates into formal and permanent jobs between high school graduates and tertiary degree holders.
Picture this
Imagine a stadium with distinct entrance gates based on ticket class—holders of general pass tickets are directed to an overcrowded, unreserved floor with temporary seating, while holders of VIP passes walk directly into reserved, permanent box seats without having to compete for floor space.
What the evidence says
A worker with tertiary education is **7 times more likely** to hold a permanent job and **4 times more likely** to hold a formal job compared to a high school graduate; baseline control group permanent job rates were only 12% overall.
- Who
- **N = 3,052 youth job-seekers** (aged 18–29, completed high school) evaluated against cross-sectional representative survey data in Addis Ababa, Ethiopia.
- How
- Observational comparison of baseline employment levels across education tiers combined with randomized intervention subgroup analysis.
What to do
Establish standardized skill certification mechanisms specifically targeted at non-tertiary high school graduates to bridge the formal employment gap caused by educational segmentation.
From the source
"For instance, a worker with tertiary education is seven times more likely to have a permanent job and four times more likely to have a formal job than a worker who has only completed high school."
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