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Human Capitalization and Labor Market Absorption Capacity


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  • Rasheed, Farooq
  • Khan, Aliya H.
  • Khan, M. Wali


This paper examines the changes of the degree of job absorption over time in job categories of Engineering, Computer Sciences, Business Administration and General subjects. We estimated a time-delay index explaining time-delay to get the first job after completing studies in the respective disciplines. Applying convergence criteria on the time-delay series in each category, surprisingly, the longest delay was found to be in the case of graduates from computer science, but as expected the undergraduates and graduates from general group showed little absorption capacity. On the other hand, engineers were found to be preeminent with least delay in getting the job. Business graduates were second specifically due to high market absorption capacity for those who major in marketing. Overall there was weak correlation found across the selected specialized groups, except for engineering and business graduate groups. Our study shows that market absorption capacity of graduates from business and general fields has become healthier. In case of Business graduates, a highest convergence rate is observed. Computer Science graduates do not show good signs in building the labor market absorption capacity as the delay index of this group increases over time. General group, considered as underdogs, found satisfactory tendency to labor market joining capabilities particularly from the share of graduates from mass communication and journalism. With such findings,balanced labor and educational policies can be grafted, such that each area of skills and knowledge demand gets its due share in the job market and the absorption capacity for one category does not remain low.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43401.

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Date of creation: 15 Jan 2009
Date of revision: 25 Aug 2009
Publication status: Published in Journal of Business & Economics 2.1(2010): pp. 143-159
Handle: RePEc:pra:mprapa:43401

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Keywords: Human Capital; Labor Market; Absorption Capacity;

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  1. Farooq Rasheed & Eatzaz Ahmad, 2006. "An Evaluation of the Performance of Government of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, Pakistan Institute of Development Economics, vol. 45(4), pages 831-841.
  2. G. M. Arif & M. F. Kiani & Khalid H. Sheikh, 2002. "Labour Market Dynamics in Pakistan: Evidence from the Longitudinal Data," The Pakistan Development Review, Pakistan Institute of Development Economics, Pakistan Institute of Development Economics, vol. 41(4), pages 701-720.
  3. Lippman, Steven A. & McCall, John J., 1976. "Job search in a dynamic economy," Journal of Economic Theory, Elsevier, Elsevier, vol. 12(3), pages 365-390, June.
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