The effects of higher education on interdependent multidimensional working poverty in Ethiopia

This study examines the effect of higher education on multidimensional in-work poverty in Ethiopia, combining microlevel and cohort level analyses of the 2013 and 2021 national labor force surveys. We conceptualized working poverty across three interrelated dimensions—income, time, and multidimensional deprivation to allow for a more comprehensive assessment of how education shapes the lived economic conditions of workers. At the individual level, estimates from a multivariate probit (MVP) model indicates that higher education significantly reduces the likelihood of experiencing all three forms of deprivation. However, at the cohort level, a pseudo panel fixed effects model reveals that higher education attainment gains associated with lower aggregate income poverty, the effects on time and multidimensional poverty are modest, pointing to persistent structural constraints within the labor market. Furthermore, we find significant heterogeneity in outcomes by college major, demonstrating that the protective role of higher education is not uniform across academic disciplines. The findings suggest that although higher education is a powerful tool for reducing working poverty, its effectiveness is constrained by labor market dynamics, job quality, and the alignment between academic training and economic demand.