ABSTRACT

According to theoretical and empirical evidence, young people are more likely to be
overeducated than adults, especially in countries where educational attainment of young
people is increasing rapidly and the school to work transition is extremely difficult.
Nonetheless, if our schooling were simply a transition phenomenon, an entry condition on the
labour market and expected to disappear during working life, it would not be a crucial
problem. From the statistics, Nigeria’s unemployment persists for years and the rate is highest
among the youths whose ages are between 15 and 24 years. The study is of the opinion that
through entrepreneurial training and skills acquisition programmes, unemployment and
underdevelopment problem can be ameliorated.

OVEREDUCATION, AND ENTREPRENEURSHIP, ANY RELATIONSHIP?

INTRODUCTION

Nigeria has experienced a tremendous increase in investment in the education sector due

primarily to oil boom in the early 1970s. Given an increase in demand for university graduates

in the labour market and the commensurate pay packets, the proportion of tertiary enrolments

increased from 0.74 in 1975 to 10.07 in 2013. In the early 2000s, the new political dispensation

beginning from 1999, allow for licensing of more private universities and polytechnics and

establishment additional public tertiary institutions to accommodate high demand for tertiary

education.

Table 1.0 Institutional Growth in Nigerian Universities

Given this development, there is no doubt of the fact that the demand for graduates has not

kept up with the supply in the labour market. The wide gap between demand for and supply of
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graduates reinforced the claim that a large proportion of graduates are employed in sub-

graduate jobs. This portends that graduates are over-educated for the jobs they are employed

to do. The implications of this development are numerous. Huge sums of money are wasted in

subsidizing public higher education. It is therefore very important to exhaust the extent and

effect of over-education especially this time when unemployment rate has sky-rocketed

coupled with the increasing cost of financing higher education in the economy.

Widening participation in education may lead to an increase in over-education for some

reasons. Employers of labour are faced with a more qualified pool of candidates, may have

upgraded some traditionally non-graduate jobs.

Alternatively, they may recruit graduates for jobs that have basically stayed the same and do

not require graduate skills. In an emerging economy, the proportion of the educated adult

population to the secondary school or tertiary institutions (i.e. the stock of human capital) is

almost the same level with that in advanced economies. Researchers and policy makers often

use education attainment data as one of the key factors to attract foreign investments to the

country. Unfortunately, this indicator can turn out to be a poor means of evaluating the true

stock of human capital. In Nigeria, higher levels of graduate education do not translate to high

levels of productive skills. As the nation transited to democratic system of governance in 1999,

education institutions expanded rapidly as more schools, colleges and universities were

established by both government and private sectors. But the rapidly expanding higher

institutions often fail to equip graduates the necessary skills needed in industrial production

due to low quality of the university graduates and relevance of educational programmes. Today,

there are substantial skills shortages in the relevant sectors of the economy. Substantial skill

shortages co-exist with over-education and structural unemployment and underemployment of

which effects cuts across the teaming population of youths and adults.

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Though, there has been increasing awareness that entrepreneurship development is the only

way out of unemployment and poverty in Nigerian economy, entrepreneurship in Nigeria is

still in its developmental stage. It is believed that through entrepreneurship, employability of

youths including university graduates can be enhanced and that skills acquisition offered by

entrepreneurship training can help reduce skills gap. While the economy gropes with ever

increasing employment rate, there has been shortage of skills among the university graduates

required by industrialists in the relevant sectors. This paper therefore explores the nexus

between over-education and unemployment rate through entrepreneurship training in Nigerian

economy.

Concept of Over-schooling

Van De Meer and Glebbeck (2011) conceptualize over-schooling to emanate due to imperfect

allocation in the labour market, a situation where many workers have jobs which are below

their qualifications. Green, Melutosh and Vingnotes (1999) defined over-schooling as an

excessive turn out of graduates from tertiary institutions thus creating a gap between what is

produced by the educational system and what is demanded in the labour market. In other words,

they see over-schooling as excess supply of labour in the human resource market. Many schools

of thought agree that over-schooling is the same as over-education Ng(2000).

From the foregoing definitions, over-schooling can be seen as a direct result of the tertiary

institutions producing graduates that would not be adequately absorbed in the labour market.

The unemployed persons:

These comprise all those in the labour force that are not in employment during the specific

reference period. In other words, all people in the working-age population who, during the

reference week, were without a paid job, available for work, and had either actively sought for

work in the past four weeks ending with the reference week, had a new job to start within the

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next four weeks, or worked for less than 20 hours a week in the informal sector ending with

the reference week are considered unemployed.

Underemployment

Underemployment is an indicator of labour underutilization, and it therefore represents an

important measure of unused potential which results in productivity and profitability losses and

other socio-economic costs on both micro- and macroeconomic level. The broadly accepted

definition of underemployment is the one from ILO: underemployment reflects

underutilization of the productive capacity of the employed population in relation to an

alternative employment situation in which persons are willing and able to engage (ILO, 1998).

Table 1.2 Labour Force Statistics

Nigerians are witnessing a monumental challenge of the growing rate of underemployment in

today's economy. The question that should be raised here is: how big is the problem of

unemployment and underemployment for modern economy, and how far reach its

consequences? What measures are relevant to reducing the rate of underemployment in the

economy? This paper is an attempt to give answers to those questions.

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Motivation

Every year, graduates are being turned out from Nigerian tertiary institutions in hundreds of

thousands. This, by implication has resulted to a huge gap between labour supply and demand

in the resource market. The wide gap is caused by many factors which include misalignment

of the educational system with the job market needs, underdevelopment of education training

system and continuous economic restructuring to catch up with technological development.

Nigeria is among the emerging economies with ever increasing population estimates of about

190.9 million people. The economy is being structured to transit from public to private led

growth and development. The cost implications of over-education and skills mismatch can be

damaging to workers, business firms and policy makers. The overall effects is ineffective and

inefficient use of the reservoir of human resources in the economy. It is very necessary for

policy makers to understand how individuals and business firms are being affected by over-

education and skills shortages.

Review of Theoretical Literature.

Richard Freeman (1976) was one of the first economists to express concern about the post-war

expansion of higher education in the U.S.A.4 and the potential problem of overinvestment. He

found that the rate of return to a degree had fallen significantly in the U.S.A. in the 1970s and

attributed this to an excess supply of graduates. Freeman’s results were particularly significant

because they questioned the widely held belief that a college degree was a “good investment”

and a virtual guarantee of economic success.

Sabina, Sanja and Lela(2016), list the socio-economic effects of underemployment .

According to their study, they could be determined and measured on different levels:

individuals, families, communities, organizations and nations. The study further revealed that

non-voluntary underemployment situations affect financial, emotional and social well-being of

the individual. There are more negative job and work attitudes among underemployed. They

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report lower job satisfaction, lower life satisfaction, Feldman and Turnley, (1995), Burke,

(1998), Friedland and Price, (2003), Brown et al, (2007), Wilkins, (2007); as in Li et al., (2015)

greater intentions to leave their jobs, and they experience poorer psychological and physical

health, as well as wage penalty (this penalty can continue to depress an individual's earnings

for years afterward). Persistently lower income is the reason for lower access to credits and

lower savings, as revealed by Li et al., (2015). In economic terms, there is already data that

show that the effects of being underemployed directly after graduating from college can linger

for more than 10 years, Alberti, (2011). Although underemployment is not as potentially

detrimental to workers as unemployment, it can nevertheless have long-term consequences for

career progression, earnings potential and the accumulation of retirement income Li et al.,

(2015). The study recommended that creators of education policies should concentrate on

developing skills and programmes that are in line with labour market changes and labour

characteristics.

There are a variety of ways of actually measuring the education needed to do a particular job.

Dolton and Vignoles, (1996), along with most other analysts, use a “self-assessment” technique

Duncan and Hoffman, (1981); Sicherman, (1991); Sloane et al., (1995a, b) whereby survey

respondents are asked directly about the minimum education level needed to do their jobs.

Other researchers have used “external” methods to assess the average required education for a

particular type of job, generally using job analysis data. Rumberger (1987), for example, used

the U.S. Dictionary of Occupational Titles (U.S. Department of Labor, 1965) which provides

information on the educational requirements of a wide range of occupations.

Without doubt, overschooling is rife in Nigeria as could be discerned from such pointers as

employment rates, school enrolments and graduation, and per capita income estimates.

The studies done by Etuk, Akpan and Etuk (2012); and Akpan, Usoro and Udofia view

overschooling as conditions whereby people occupy job positions which are not optimal for

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their qualifications. The theoretical backings for the former study was derived from the Human

Capital, the equity and the two-factor theories of motivation and job satisfaction. The two

studies concluded that stopping overschooling would reduce poverty and increase the national

income leading to faster national development. Akpan, Usoro and Udofia (2013) paper

recommends that skills acquisition should be incorporated into the curriculum of all tertiary

institutions to prevent overschooling.

Unemployment problem has reached a disheartening level to the extent that every family now

questions the relevance of Nigeria’s education system. Despite the increasing cost of education

training in the country, there has been abysmal returns in terms of commensurate paid jobs that

guarantee improved welfare and socio-economic status in the country.

The unemployment situation in the country is alarming and the youths are the most affected as

depicted in the above table. Worst is the state of underemployment rate where most graduates

are employed in substandard jobs. Unfortunately, the GDP growth rate has not kept pace with

growth in population. The population growth rate is over 3,5% while growth in GDP is less

than 1,5% . In other words, the annual growth in the production of goods and services falls

short of population increase. increase in number of graduates being turn out from the tertiary

institution in the country.

Table 1.3 Nigeria Labour Statistics

Nigeria Labour Last Previous Highest Lowest Unit

Unemployment Rate 18.80 16.20 19.70 5.10 Percent

Population 190.89 185.99 190.89 45.14 Million

Living Wage Family 137600.00 135300.00 137600.00 135300.00 NGN/Month

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 Nigeria Labour Last Previous Highest Lowest Unit

Living Wage 43200.00 41800.00 43200.00 41800.00 NGN/Month

Individual

Employed Persons 69090.00 70354.90 70665.90 66951.00 Thousand

Employment 187226.00 155444.00 499521.00 79465.00 Jobs

Change

Employment Rate 81.20 83.80 93.60 81.20 Percent

Unemployed 15998.00 13585.20 15998.00 4672.00 Thousand

Persons

Wages High Skilled 57200.00 57200.00 57200.00 57200.00 NGN/Month

Wages Low Skilled 25500.00 25500.00 25500.00 25500.00 NGN/Month

Youth 33.10 29.50 33.10 11.70 Percent

Unemployment Rate

falls short of population increase. The serious gap has far reaching implications in terms

poverty status and growing unemployment and under-employment in the country. As the

population grows, so does the unemployment rate. In fact, the rate of unemployed youth is over

33% in 2016 from the above table.

The national employment rate in 2014 stood at 93.6 per cent, showing increases of 330 and 170

basis points above the preceding quarter and the corresponding quarter a year earlier,

respectively. While time related underemployment rose to 17.9 per cent from the level a year

ago, full time employment fell to 75.7 per cent from the 79.9 per cent achieved. Over the

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corresponding quarter a year ago the number of (time related) underemployed Nigerians

increased by 4,462,345 persons to 13,052,219 persons.

The trend of underemployment rate indicates that the Nigerian labour market has been

generally dominated with under-employment situation much more than the outright

unemployment phenomenon as the magnitudes of the underemployed outstripped the

unemployed since 2010. This aptly captured anecdotal observations that people generally

engaged themselves in one form

of income generating activity or the other in the absence of full employment or other gainful

employment in the informal sector of the economy. Policies that focus on creating opportunities

for more gainful engagement for people in itinerant activities will further help to ameliorate

the unemployment and under-employment phenomenon in Nigeria.

The State of Youth Unemployment in Nigeria

As indicated in the above table, in terms of age, younger youth struggle even more to find jobs:

At least two-thirds of unemployed youth are between 15 and 24 years of age. And, in terms of

gender, available statistics show that a majority of unemployed youth are female.

The high rates of underemployment within age interval ‘15-24’ years are generally expected,

as this category of labour force are engaged in low-skilled and part-time employment. As

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expected the majority of the citizenry within this age bracket are expected to be undergoing

their apprenticeship. Also, the high rate of underemployment among age ‘25-34’ years

showcased the difficulty associated with youth and graduate unemployment. This is

particularly worrisome because this category falls within the very active labour force

population. Policies that will address youth and graduate unemployment phenomenon in the

country are required.

The Role of Private Sector

The Development Assistance Committee of the OECD (DAC, 1994) defines the private sector

as “a basic organizing principle for economic activity where private ownership is an important

factor, where markets and competition drive production and where private initiative and risk-

taking set activities in motion”

The private sector also refers to all economic institutions, business firms, foundations, and

cooperatives etc that are not owned by the government. The private sector enterprises are often

described by other names such as capitalism, free enterprises system, the voluntary exchange

economy, the market system, and the profit system (Imaga, 2003)

Stressing the importance of the private sector, Professor Osinbajo said: “It is the private sector

that must lead the way in jobs creation. “From day one, President Muhammadu Buhari said our

primary role as government is to provide a business-friendly environment and that industrial

and commercial policies are the joint responsibilities with the stakeholder-private sector. “This

is why he instituted our quarterly Business Forum, the Industrial and Competitiveness Council,

the Presidential Business Enabling Environment Council and MSME Clinics. “So, working

with the private sector is not a preference for us as a government; it is the only way to go.”

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 How The Private Sector Drives Economic Growth and Well-Being

Since the creation of the original Millennium Development Goals in 2000, the crucial role

played by the private sector in delivering economic, social and environmental development has

become better understood. In fact, the private sector in every country is simply the community

at work and, as a part of that community, business today comprehends its impacts better than

ever before. Its influence on economic and social development, respect for the environment,

and efficiently and effectively managing resources represents an important contribution to the

well-being of its communities.

Today, job creation, is the biggest development challenges of Nigerian leaders at all levels

of governance. Existing enterprises cannot absorb the market entrants of today, let alone

those in the future. This means that more entrepreneurs are required – people with ideas,

drive and a willingness to take risks. The big question is: how helpful is the business and

regulatory environment in our country when people take the decision to start a new

business? How helpful is the legal process in registering and sustaining a business? How

adapted is your education system in providing would-be entrepreneurs with the skill-set

needed to be enterprise and employment creators?

In reality few countries do those things well and in Nigeria, the environment is often quite

hostile to such initiatives. If any of the sustainable development goals are going to have any

kind of chance to deliver for our populations beyond 2018, the area of private-sector

development and enterprise growth must also be supported by governments. Jobs are the

best way out of poverty. We need good jobs – formal-sector jobs through formal sector

enterprises, jobs that fit the needs of the modern economy, jobs that through their taxes

contribute to the means of development in any country.

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 If one stands back and looks at the goals we set for our societies, the private sector is the

main engine of economic growth. It is the base upon which social development, education,

health care and social-security systems rely. Let the private sector do its job!

As the core of political and economic transformation in any developing country is the

emergence of a strong private SME sector, the crucial role of both central and state

governments should focus on the creation of an enabling business-friendly environment. A

new macro-level product is therefore industrial policy advice. It uses methodologies and

tools such as competitiveness analysis and technology foresight which benefit from an

active integration of research components at all levels of government.

Building education and skills

Investing in the right skills is very crucial for sustainable growth. It is key for increasing

productivity, attracting investment and creating better job opportunities. The new global

agenda also values developing skills that the labour market demands. SDG Target 4.3 seeks to

“substantially increase the number of youth and adults who have relevant skills, including

technical and vocational skills, for employment, decent jobs and entrepreneurship” by 2030.

This is particularly important in Nigeria, which experiences the most severe mismatch between

skill endowment and employers’ needs. Compared to a global average of 21% and an average

of 15% in OECD countries, over 45% of companies in Nigeria struggle to find properly trained

employees.

Doing business and doing well are not mutually exclusive. Profit-seeking and sustainability

objectives can align. To better mitigate risks and realise the benefits of private sector action,

informed dialogue between policy makers and businesses will be crucial. That is why business

and government leaders are discussing ways multinational corporations can promote economic

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and social development through meetings of the Emerging Markets Network (EMnet)

organised by the OECD Development Centre.

Entrepreneurship as a Panacea to Unemployment

Fardin , et al (2016) summarize the necessity of entrepreneurship as thus: Entrepreneurs are

creative, innovative, risk taking, dynamic, flexible, and brave, opportunity recognizer, and

leadership potentiality, and network builder, independent and self-reliant people. Further, they

say that entrepreneurship is a key factor on (1) Economic Growth and Development of

countries (2) Providing employment and job opportunity (3) Enhancing productivity and

production capabilities (4) Contributing to the high levels of creativity and innovation and (5)

Creating wealth and providing education welfare.

Therefore, entrepreneurship education offers opportunities to convert all new ideas and

knowledge to profitable and useful products and services. And education for creativity,

innovation and entrepreneurship should start from very early stages of childhood

Since the role and effect of entrepreneurship on job creation and economic growth of developed

countries revealed, there has been increasing attempt to educate and teach knowledge and spirit

of entrepreneurship to managers, businessmen, and students. Nowadays, educating and

improving human resources is one of the inevitable responsibilities of organizations and

institutions. Peter Drucker believes that the rarest resource in any organization is efficient

humans. Entrepreneurs make good use of the opportunities, and create new ones by making

changes (Hezar Jaribi, 2004).

The issue of over-schooling addresses the huge gap between the demand and supply of post-

secondary graduates, where there exists persistent excess supply of labour in the market. The

only option left for the graduates is to take up jobs that are not matched with the skills acquired

in the tertiary institutions, which pays far below the level of education and skills acquired.

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From research studies, it has been confirmed that the excess of labour supply may not be the

cause of unemployment but the relevance of the skills to efficient and effective productivity is

the core issue that drives unemployment rate high above the world standard in Nigeria

The following questions that should be raised and discussed by educators are

• How can we make education more relevant and move from increased inputs to improved

outputs?

• How can we improve the links between primary, secondary and higher education when it

comes to entrepreneurship?

• How can we continue to introduce and implement more cross-disciplinary approaches?

Entrepreneurship education – where do we go from here?

Embedding entrepreneurship within education is a challenging task. Entrepreneurship

education has to pass through several filters before it is crystallised as learning within the

student and learning outcomes. This means that what you feed into the system as policy is

considerably diminished by the time it reaches the student. Great care must therefore be taken

regarding the design and content of curriculum, as well the methodologies used by teachers.

What Needs to be Done

Taking the entrepreneurial education agenda and unpacking entrepreneurship education

• The implementation of entrepreneurship education involves many elements and levels. Every

element should be considered independently and consistency should simultaneously be ensured

both horizontally and vertically within the education system Developing a comprehensive

programme of learning outcomes.

Consensus should be achieved regarding relevant and appropriate learning outcomes.

Additionally, a system for assessment should be developed.

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Coherence needs to be ensured between policy objectives and actual learning outcomes

through curricular models and matching materials. These are important tools for teachers, in

addition to policy guidelines

Recommendations

Focus on the deep embedding of entrepreneurship in initial teacher training

• Establish in-service training for established teachers, taking the fact that teacher development

is a lifelong process into consideration

• Create partnerships between agencies, educational institutions and other stakeholders by

taking the entrepreneurial ecosystem approach to enable concrete and sustainable projects, such

as a teacher network, to be established.

Provision of infrastructural facilities has become very necessary and should be pursued without

further delay. This is the only means through which private sector net growth can be enhanced.

Most young graduates who have high skills and values are often constrained by lack of funds

to pursue their dreams. Government at all levels should improve funding of young

entrepreneurs to enhance Small and Medium Enterprises development and consequently

improvement in employment situation in the economy.

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