The Effect of Education in Labour Market: Case Study of Kosovo

One of the major challenges of the post war Kosovo has been establishment and reform of education system and education institutions. Thus, this research aims to address effect of education in labour market outcomes for the period 2009 until 2013, through a theoretical discussion of four main points: the process of establishing the education system in Kosovo in post war period, the effect of education in labour market, participation of education in Kosovo's GDP and countries in the region, investments on education as the main opportunities for reduction of unemployment in Kosovo. In the methodology of this research paper are used secondary data and they are calculating by STATA program. The main analyses in this research paper are: descriptive statistics, regression method and correlation matrix. The results of analyses have shown that in one side education has positive impact on employment and youth employment rate, but it has shown negative impact on job seekers rate; then, on the other side vocational training has shown negative impact on employment but it has positive impact on youth employment rate and job seekers rate. In T-statistical analysis, all analyses have shown non-significance on both variables (education and vocational training) during the period 2009 - 2013. In this research paper is concluded that Kosovo has high unemployment rate 35.3% (KAS Report, 2015) and most of Kosovo population is constituted by young people, thus this remains one of the biggest challenge for Kosovo state. Education (including vocational trainings) is shown as the best opportunity to reduce unemployment, especially at younger people, and to integrate them in domestic and international labour markets. Thus, the authors conclude that in order to reduce the high level unemployment rate, Kosovo institutions should focus constantly in creating and improving the education policies. DOI: 10.5901/mjss.2015.v6n6s4p3