Actually, I am about to estimate the effects of educated labor force supply (or better to say production) in higher education, on the unemployment rate. To do this in an strong way, it is necessary to start the discussion in a macro- or labor economic background and specify the relationship through a mathematical framework (e.g. similar to Jones [2002]), However, most of the similar studies -as far as I have seen- have not provided such a background.
I would be grateful if anyone can introduce the required framework.
I am not sure if what you are looking for is a theoretical background for your empirical work. If that were the case, from my standpoint, an excellent textbook for PhD students with a high level of formal discussion is "Labor Economics" by Pierre Cahuc, Stéphane Carcillo and André Zylberberg
https://mitpress.mit.edu/books/labor-economics-second-edition
Dear @Ángel Martín Román
Before I ask the question here, I had checked out that perfect book. The textbook is fabulous and comprehensive, but it doesn't provide the framework as far as I understood.
Thank you.
you can capture education through the theory of human capital and its role in economic growth. there are heaps of literature out there discussing the relationship though human capital
Thank you Taha Chaiechi !
but how to run the whole model in equilibrium? Do you recommend a simultaneous equations or DSGE model?
DSGE is a classical neo-classical model, so if you use that you need to follow specific assumptions. Simultanouse Equation systems on the other hand allows you to follow any theoretical framework. So there is a benefit in that.
I agree with Dr Taha Chaiechi. Human Capital Index could be useful, either produced by the World Economic Forum (the Global Human Capital Report) or the World Bank (the World Development Report).
I think the Human capital theory could be one possible candidate.
Paul: The best method is to compare a person's education level with their income level.
In most cases, there is a direct, positive relationship between a person's education level and their income.
In general, income level ad educational level are related and human capital is usually applied. However, if a more profound perspective is implemented and detailed analysis is carried out, a single theory is hard to find, as the the the quality of employment is related to country-specific and field-specific trends and structures. For example, in countries with high proportion of those having higher education degree, the income of graduates varies strongly with the field of study., with the strong variation of field-specific demand and supply of labour force.
Dear Paul
According some data for European Union countries unemployment is high in educated people.
Hello:
I found this article: "The Relationship Between Unemployment and Education: The Inverted U-Shaped Hypothesis for the Brazilian Labour Market."
I attach the article:
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