Educated youth unemployment and the structural disconnect between economic growth and tertiary expansion

This policy brief examines the growing crisis of educated youth unemployment in Bangladesh despite sustained economic growth and rapid expansion of tertiary education. Using recent labour-market data, comparative regional evidence and interdisciplinary literature, the study analyses the structural and institutional factors underlying the disconnect between economic growth and graduate employment generation. The analysis applies human capital, structuralist and institutional perspectives to evaluate the limitations of conventional skills-mismatch explanations and existing policy responses. The study finds that Bangladesh's low-productivity, export-concentrated growth model has failed to create sufficient high-skilled formal employment opportunities for an expanding graduate population. Weak employment elasticity, limited industrial diversification, fragmented governance, informal recruitment systems and persistent gender disparities further constrain labor-market absorption. Comparative evidence from Vietnam, India and Indonesia demonstrates that education and training reforms alone are insufficient without coordinated industrial transformation and stronger labor-market governance. To address these challenges, the brief proposes a phased ten-year National Productive Employment Strategy integrating industrial diversification, education and skills reform, entrepreneurship support and institutional restructuring. The study concludes that resolving educated youth unemployment requires coordinated structural transformation capable of aligning higher education expansion with productive formal-sector employment and sustaining Bangladesh's long-term demographic and economic development.