A Brief Review of the Literature on HEC and Higher Education in Pakistan

ABSTRACT

There is no debate that higher education has an important role in enhancing productivity at individual and national level. Owing to this importance higher education expansion appeared as a major societal change of 20th century. Pakistan following the suit converted its institute dealing with higher education i.e. University Grant Commission (UGC) in 2002 to HEC Higher Education Commission (HEC) to step ahead in making higher education’s access easy for a large number of people. Therefore, this study reviews in detail the reforms taken so far by HEC to advance the purpose of its creation and what impact it had on quality and demand of higher education and does this higher education materialise itself in the form of earnings and returns for the individuals. So, for this purpose, we reviewed the most relevant studies that have brought to light the aforementioned issues and have tried to summarise these studies’ most critical findings. For presenting a clearer picture of the scenario we also estimated some facts and figures from latest datasets pertaining to Pakistan and also from crosscountry analysis. The overall finding shows that although HEC has introduced many reforms to improve the quality of higher education, however due to budget constraint and many other hurdles, it could not achieve its objective up to the desired level. Moreover, regarding the impact of higher education expansion on employment opportunities it is observed that unemployment of higher education has reached 18 percent and over education is 40 percent according to LFS 2020-21. Although, returns to education are high, as highly educated people crowd out low educated, however when we compare returns across the cohorts, we see that these have declined as young, educated cohorts are getting low returns compared to their older cohorts. One of the reasons for these low returns could be the stagnant demand of highly educated people and second the lack of skills which are required by the labour market. Therefore, this literature review concludes that without developing the labour market and without improving the quality of higher education, further investment in higher education expansion would be a waste of public and private resources.

INTRODUCTION

According to Growth and household production theories human capital is crucial for economic growth at both at individual and national level. Competences, skills, knowledge, education, and training represent the storehouse of human capital. Accumulated human capital at the individual level boosts productivity through knowledge, which in turn serves to enhance earnings (Becker, 1964). At the national level, endogenous growth theories (Lucas, 1988) also highlight the notion that a nation’s economic growth can be significantly aided by enhancing its innovative ability.

The Human Capital hypothesis states that there is a pure productivity component to any investment made in human capital (McMahon, 1999). Human capital theorists have long held that education increases labour productivity by enhancing workers’ cognitive capabilities. Research has demonstrated that increased labour productivity is positively correlated with educational attainment. The positive impact of human capital on households as well as the economy contributed to an increased enrollment in educational institutions across the world as many countries adopted education enhancement as a public policy. There has been seen a considerable increase in the average level of education across the world during the past several years (Barro & Lee, 2001; OECD, 2014). This in turn led to the spread of education at all levels with more emphasis on the expansion of higher education. The enrollment rate in higher education saw an increase of 200 percent by the end of last century

Many other views also prevail in literature regarding this higher education expansion. Some researchers are of the opinion that the spread of industrial revolution throughout the world increased demand for highly skilled labour, which in turn resulted in the expansion of tertiary education (Keep & Mayhew 1999; Beduwe & Planas, 2003). Also, the Industrial Revolution increased the demands for engineering and management professionals and, more recently, for Information Technology (IT) experts and the phenomenon is termed as Skill-Biased Technology Change (SBTC) in the literature (Goldin & Katz, 2009; Kristal, 2013). Another reason proclaimed for this increase in higher education is the political struggle among different community groups in the world to ensure better mobility chances for their children. These groups fought for securing better educational opportunities for their children, especially higher education, perhaps without taking into consideration the changes labour markets would undergo in the future (Collins, 1971). Another strand of literature suggests that this education expansion is due to public policy rather than driven by free markets (Haim, et al. 2019). Whereas, Schofer & Mayer (2005) are of the opinion that education expansion is not a need of the labour market. Rather, it is the effect of institutional change.

In any case, we see that education expansion is one of the most important societal changes of the twentieth century, with more emphasis on higher education (Calderon, 2012). The major expansion took place in the middle of the century, both in developed and developing nations, impacting them differently. Ransom (1993), examining the growth of higher education in developing nations, contends that resources—public and private—have not kept up with the rising costs and enrolment rates. Rising demand and enrollments, unequal access policies, exclusive public funding, underutilisation of professional staff, excessively theoretical curricula, and inappropriate teaching methods have resulted in high unit costs, high dropout and repeat rates, low graduate completion rates, and the production of graduates whose specialisations and skills do not match those required in the labour market in many countries, especially in developing nations (Tansel & Tai, 2010). Because of this, the majority of higher education institutions in developing nations are having trouble producing and using the knowledge required to keep up with the quickly evolving demands of scientific and technological innovation. Even though there is a widespread crisis in the effectiveness and quality of higher education in developing nations, there are notable regional differences in higher education as well as institutional differences within a single nation. This suggests a wide range of potential policy solutions for advancement and creativity.

In Pakistan too this phenomenon resulted in the conversion of UGC, institute dealing with higher education matters, into HEC to increase the scope of this institution and to make higher education access easy for all. Although HEC has implemented numerous reforms to modernise institutions and raise the standard of higher education, the outcomes have not been up to par (Khan, et al. 2021). Enhancing learning skills, behaviour, and lifetime empowerment as critical and logically reflective individuals is the primary goal of higher education investment at the household and national levels, which aims to improve job and life prospects (Khan, et al. 2021). However, higher education did not prove to be very beneficial because of the discrepancy between the skills graduates acquired and what the labour market wanted.

Moreover, due to the poor economic performance of the country, job markets were unable to absorb graduates passing out from higher educational institutes. As a result, this caused graduates to remain unemployed or to work as overeducated in occupations where their education was above the required level.

So, it is imperative to analyse that either this higher education expansion was really a need of the labour market, or it was due to SBTC or a result of some political struggle. Keeping these questions in consideration many studies have been done in Pakistan too which evaluate the role of HEC and expansion of higher education, quality of higher education, demand of higher education and its impact in terms of employment opportunities and earnings with reference to Pakistan. Therefore, this study is an attempt to evaluate the argumentative review of the literature that has been contributed so far for evaluating these different aspects of HEC and higher education expansion in Pakistan. For this we have considered mostly those research papers that have been published in HEC recognised journals both locally and on an international level. Secondly, I also included the studies that have been conducted in PIDE in this context. Moreover, for presenting a clearer picture of the scenario we also estimated some facts and figures from latest datasets pertaining to Pakistan and also from cross-country analysis.

The study deals with HEC and education step by step. Section 2 will discuss the literature contributed so far regarding HEC and its reforms. Section 3 will discuss the studies that have been conducted for the quality of higher education. While Section 4 analyses the demand of higher education at household level and impact of higher education in terms of employment opportunities and earnings has been discussed in Section 5. Whereas Section 6 presents conclusions and policy recommendations for future work.