The role of higher education attainment and graduate college majors in shaping employment status in Ethiopia: evidence from pooled cross-sectional and pseudo-panel data

This study investigates the private and social employment returns to higher education in Ethiopia (1999–2021) using pooled labor force surveys. We employ both individual-level multinomial probit and cohort-level pseudo-panel models to disentangle private gains from aggregate social effects. The results show that higher education attainment is associated with a higher probability of paid employment. Using Agriculture and Life Sciences as the reference field, the analysis reveals substantial heterogeneity in employment outcomes across college majors. In addition, engineering and medicine are associated with stronger aggregate unemployment-reducing effects. A strong gender heterogeneity emerges: men realize greater private employment return, while women’s education is associated with greater social returns. Over time, social returns have strengthened, indicating the need for policies to address high impact fields and women’s labor market barriers. This study offers new evidence regarding the influence of higher education on individual job prospects and broader labor market outcomes in Ethiopia. By distinguishing private returns from aggregate social effects, it shows that higher education increases the likelihood of paid employment. Overall, returns vary substantially across fields of study and gender. In particular, engineering and medicine generate stronger economy-wide unemployment-reducing effects, and women’s education produces greater social returns despite lower private gains. These findings highlight the importance of aligning higher education policy with high-impact fields and addressing structural barriers that limit women’s full participation in the labor market.