How should our schools respond to the changing demands of the twenty first century?

by Anthony Mann
Director of Policy and Research, Education and Employers Taskforce

This is the question addressed in a new publication featuring interviews with eight leading commentators on the relationship between education and employment.*

A number of common themes from the eight interviews are picked out in an introductory essay by editors Anthony Mann (Education and Employers Research) and Prue Huddleston (University of Warwick). Contributors note the ways that in the UK (and other OECD countries) the labour market has become notably more hostile to young people over the last generation with lower levels of qualification especially vulnerable.  A number of distinct trends relating to technological change, globalisation, competition from older workers and changes in recruitment practice have all worked to the structural disadvantage of young people. With an hour glass labour market hollowing out, the risk of becoming stuck in low skill, low pay employment has increased for young people.

Interviews highlight ways in which schools can, and should respond, to specific changes in the relationship between education and employment.

Firstly, as the labour market has become more complex, it has become more difficult for young people to make informed investment decisions about the education and training (human capital) they accumulate, contributing to significant mismatch between skills demanded by the labour market and those possessed by young people, increasing the importance of high quality careers provision informed by real workplace contacts.

As Ewart Keep argues: It is absolutely apparent that if we want to do anything to make transitions into an increasingly complex working world easier for young people, it is essential that high quality careers information advice and guidance is available.  Without that, we might as well give up, it is that important. …We need to help young people become far more discerning consumers of the provision available to them.

Secondly, dynamic, deregulated labour markets demand new skills from young people both in terms of what is needed to successfully navigate ever more fractured transitions from education into sustained employment, and with regard to skills (crucially, in the effective application of knowledge) associated with the most successful transitions.

As Andreas Schleicher argues: Schools need to stop preparing young people for the jobs that existed a generation ago and start preparing them for jobs which do not yet exist. For example, entrepreneurship education is much more important now than it was a generation ago because it teaches those skills and personal attributes which oil the modern labour market.  It should not be taught separately but written into every subject.  

The interviews tell a story of a labour market undergoing considerable change over the last generation, changing the character of work in ways which make young people less attractive propositions to employers.  In a youth labour market characterised by growing complexity, increasingly fractured transitions and employers demanding new skills, there is a call on schools to respond, notably, through improved careers education advice information and guidance, by the introduction of better preparation for recruitment and embracing approaches which enhance personal resiliency and the ability to apply knowledge effectively in unfamiliar situations.  In all of this, there is a very simple proposition: that for young people to go into the labour market with better prospects, the distance between the classroom and the workplace needs to be narrowed.

* The OECD’s Andreas Schleicher; Professor Chris Husbands (head of the UCL Institute of Education); Professor Ewart Keep, chair of Education, Training and Skills at the University of Oxford; Professor Lorna Unwin of the Journal of Vocational Education and Training; Professor Hugh Lauder of the Journal of Education and Work; David Pollard (of the Federation of Small Businesses); Peter Cheese (of the Chartered Institute of Personnel and Development); and Kay Carberry of the Trades Union Congress.

Links:

OECD work on skills: Skills.oecd
How should our schools respond to the demands of the twenty first century labour market? Eight perspectives. 
Skills beyond School Synthesis Report
Skills Outlook
How does educational attainment affect participation in the labour market?
Photo credit: Are you ready? Written on the road @shutterstock

Boosting growth through better foundation skills

by Andreas Schleicher
Director, Directorate for Education and Skills

The links between income inequality and economic growth are fairly well established: If income inequality becomes too high, large numbers of people no longer have the means to participate in the economy and economic growth suffers, nor will people be able to invest in their skills to climb up the social ladder. If income inequality is too low, no one goes to work and growth suffers too. A conventional way to move between these two undesirables is to redistribute income, e.g. through taxes. But wouldn't it be much smarter if, instead of dealing with the consequences of income inequality, we could address the root of the problem and moderate the sources of income inequality? Then things would not be a zero-sum game but everyone would win.

One such source of inequality in wages is inequality in the skills of people. Our parents told us that we should study hard to get a good job and a decent salary. And that wisdom has never been more true than today. As you can track with our annual publication, Education at a Glance, the highly educated never had better life chances than they enjoy today, while those without baseline qualifications have never faced a greater risk of social and economic exclusion than today. And the rapid rise in knowledge workers in advanced economies has not led to a decline in their pay, which is what happened at the low end of the skills distribution.

Data from OECD’s Survey of Adult Skills, which measures not just the formal qualifications people have attained, but also what they actually know and can do, allow us now to study this in new ways. An OECD Working Paper has just done that and found several things. If all adults were simply to complete an additional year of education (which no doubt would be good for each of them, as well as for the overall economic and social well-being of their country) top earners would actually benefit much more than those with lower wages. So wage inequality would rise. The red line in the chart above shows the increase in wages if people would increase the length of their education by one standard deviation for each part of the wage distribution. Essentially, it shows that the more people earn, the more further improvements in their education boosts their earnings. The data* also show that the financial returns to tertiary education would increase more steeply at the top end of the wage scale, while returns to secondary education would actually decline. This may be because higher education is where individuals acquire the specialised knowledge and skills that are more highly rewarded in the labour market. Another explanation is that technological advances mainly benefit the most skilled individuals, boosting their earnings most. In a nutshell, raising overall levels of educational attainment alone could actually increase the wage gap.

There is another angle to this. The data also show that countries were people are more highly skilled, on average, are also those where skills proficiency is spread more evenly across the population*. So better and more equitable skills actually go together.

The most worrisome finding from the paper is that countries with greater inequality in skills are also those where parents’ education has a stronger impact on their children’s skills**. In other words, where skills are less evenly distributed in the population, young adults are less likely to attain better skills than their parents – and thus inequality in both skills and wages become more firmly entrenched

But the data also show that ensuring that more people acquire essential foundation skills, whatever their skills or formal qualifications, can be an effective way to lead to a more equitable increase in earnings. This is shown by the blue dotted line in the chart above. So increasing investment in foundation skills – by raising the quality of basic education across the board – would not only result in higher productivity and greater employability among adults, but would also ensure that the benefits of economic growth are more equally shared across the population.

* Figure 2, page 10 of the OECD Working Paper "Skills and wage inequality: Evidence from PIAAC"
** Figure 3, page 11 of the OECD Working Paper "Skills and wage inequality: Evidence from PIAAC"

Links:
Education at a Glance 2014: OECD Indicators
OECD Skills Outlook 2013
Skills and wage inequality: Evidence from PIAAC
New Approaches to Economic Challenges (NAEC)
Chart source: © OECD

How many young people leave school without any qualification?

by Dirk Van Damme

Head of the Innovation and Measuring Progress division, Directorate for Education and Skills

More education yields better job prospects and higher average levels of income, and is also associated with better (self-reported) health, social capital and political engagement. Year after year Education at a Glance provides the evidence that links educational attainment to these various economic and social outcomes. The economic crisis has underlined the relevance of such findings. The social cost of the crisis, in terms of unemployment and poverty, has been particularly high for those who lacked the risk insurance that education seems to guarantee for the highly educated.

The latest unemployment data from the OECD (November 2014) show that unemployment rates remain virtually unchanged at very high levels and that there is little prospect for real improvement. The recently published Education at a Glance Interim Report , which includes 2013 data, shows that the relative risk of unemployment among low-educated adults continues to be very high. On average across OECD countries, 13.7% of those without an upper secondary qualification were unemployed, compared to 5.3% for tertiary-educated individuals and 8% among those with upper secondary or post-secondary non-tertiary education.

Countries have every good reason to lift as many young people as possible out of the trap of having to enter the labour market and adulthood without a good qualification. Indeed, many countries have identified the problem of early, unqualified school leavers as a major educational challenge. One just has to glance at the chart above to understand how big the problem is. On average across OECD countries with available data, 16.8% of 25-34 year-olds have to start life without a minimum level qualification. At least one in six young people in 13 OECD countries – including Denmark, France, Italy, the Netherlands, New Zealand and Norway – lacks qualifications. This is a major risk for these labour markets and societies.

Many countries have expanded their tertiary education systems and have seen the share of tertiary-educated individuals in the 25-34 year-old cohort grow year after year – but the share of low-educated youth does not diminish at an equivalent rate. Between 2005 and 2013, the average annual growth rate in the share of tertiary-educated youth was almost twice as high as the rate of decline in the share of young people who did not have an upper secondary qualification: .94 percentage points compared to .50 percentage points. This also means that the relative share of mid-educated 25-34 year-olds has decreased as well, by .46 percentage points per year, on average.

Some countries have both a large share of highly educated youth and a large share of low-educated youth. In Spain, for example, 41.1% of 25-34 year-olds are tertiary educated and 34.9% of individuals that age do not have an upper secondary qualification. Austria, the Czech Republic, the Slovak Republic and Slovenia have the opposite profile, with small proportions of low-educated youth, a large share of young people with an upper secondary qualification, and a comparatively small proportion of tertiary-educated youth.

Sure, there is progress: the group of young people without any qualification grows smaller year after year; but progress is slow and unevenly distributed among countries. In Greece, Luxembourg, Portugal, Turkey and the United Kingdom, the share of young people without any qualification decreased by an average of more than 1.2 percentage points between 2005 and 2013. But in Denmark, Estonia, Norway and Switzerland, the share of young people in the workforce who had no qualification increased during the same period.

The message is clear: if countries want to achieve sustainable and inclusive economic growth and social progress, they should not only expand their tertiary education systems, they should also work to reduce the share of low-educated youth. Leaving a large share of young adults behind without any educational protection against the risks of unemployment, insecure jobs and social exclusion might, in the end, eat into most of the growth dividend acquired through higher educational attainment. Progress has to be achieved across the educational spectrum.

Links: 
OECD Press release: Success of education reforms threatened by lack of oversight, says OECD
Education at a Glance
Education at a Glance Interim Report: Update of Employment and Educational Attainment Indicators
Explore Education at a Glance data on GPS
Chart Source: OECD (2015), Education at a Glance Interim Report: Update of Employment and Educational Attainment Indicators, Table 1.4, available for consultation on line only

Hungry for some education data? Go no further…

by Dirk van Damme
Head of the Innovation and Measuring Progress division, Directorate for Education and Skills

The 2014 edition of Education at a Glance: OECD Indicators is released today. Find out how your country compares with others in such areas as who participates in education, and to what level; the wage premium for workers with higher education; how much of the public budget is devoted to education; what teachers earn; which countries are most attractive to international students; how education, skills and employment are inter-related; and much, much more. To whet your appetite, try our interactive data charts below.


Links:
Education at a Glance 2014: OECD Indicators
Download the publication
Download the highlights
Read free online
Press release: Educational mobility starts to slow in industrialised world, says OECD 
Wednesday September 10 at 17h Paris time - OECD Education and Skills webinar presenting Education at a Glance: 2014 OECD Indicators (registration required. Password: OECDEDU)
Follow #OECDEAG on Twitter:  @OECD_Edu @OECDLive @EAG_Indicators
See full listing of media events
Photo credit: ©OECD

Education Policy Outlook: Vocational Pathways in Denmark, France, Germany and Spain

by Andreas Schleicher
Acting Director and Special Advisor on Education Policy to the Secretary-General

As Helen Keller said “alone we can do so little; together we can do so much”. In classrooms around the world, teachers encourage peer-to-peer learning in order to enhance student learning outcomes.  In the same way, fellow peers learn from each other on how to improve their educational systems.

Since early 2012, the OECD Education Policy Outlook series has produced profiles for Australia, Chile, the Czech Republic, Finland, Ireland, Mexico, New Zealand, Norway, and Turkey. Today, four new country profiles are being added to the roundtable discussion: Denmark, Germany, Spain and France. While each of these countries face specific educational challenges, they each have successes that can serve as a lesson for others.

Every country assessed is concerned with similar reform domains. Vocational education and training programmes (VET) is a common area to all four countries that could stand to see improvements. According to the Education Policy Outlook on Denmark, for example, VET programmes see high enrolment rates, but also high dropout rates. In 2012, only 52% of VET students completed their programmes. Denmark responded with recent reforms that improved flexibility and attractiveness so that students can tailor the programmes to fit their needs. Further educational reforms will enter into force in 2015, which aim to improve the quality and attractiveness of current programmes through increased apprenticeships and professional development.

Germany also faces challenges to their long-established VET programmes. The dual functioning system consists of 3-4 days a week spent in hands-on training in a firm and 1-2 days a week spent in the classroom. Contrary to Denmark, where the challenge lies in students’ completion of programmes, the challenge in Germany lies in the transition from compulsory education to VET programmes. Germany has already implemented a few initiatives to address this challenge. A vocational orientation programme has been implemented early on in a students’ education path as preventative support. The goal is to facilitate job creation prospects, avoid early dropout and ensure a smooth transition into VET programmes.

Education in Spain has also been faced with some challenges regarding enrolment. Spain, similar to Denmark, is seeing high student dropout rates. In order to tackle this challenge, policy makers in Spain are proposing to introduce a new reform that will allow for greater flexibility in students’ educational path. At age 15 and 16, students could be able to choose to continue with general academic courses or pursue more vocationally oriented courses. At the end of the school year, the student, again, could have the choice to take an exam to earn a traditional diploma or choose to take an exam that would allow transitions into a VET programme.

France has also implemented educational reforms geared towards VET programmes. Social inequalities are a reality that France has been faced with and in order to level the playing field somewhat, these reforms aim for increased individualism in education. Accompanying the learning experience better prepares students for higher education, ensures academic success and allows for a better understanding of the appropriate career choice after school. France, similar to Denmark, Germany and Spain, also struggles with students’ transition from education to the labour market.

Denmark, Germany, Spain and France all face challenges to transitions in different ways. Among other hurdles discussed in the reports, each country is faced with challenges to their vocational education and training programmes, such as transitions to and from VET programmes, high dropout rates, or inflexible paths.  Each country has implemented note-worthy reforms, but would be well-served to make additional improvements. The Education Policy Outlook series are valuable because they  enable countries to learn from each other. But, more importantly, recognition from peers is a positive way in which we can congratulate others on their achievements, and encourage future progress.

Links:
Education Policy Outlook
Country profiles
OECD Work on Vocational Education and Training (VET)
Image credit: © Copyright Sasha Chebotarev

A skilful approach to employment

by Barbara Ischinger
Director for Education and Skills

July brought some good news and some bad news. The good news is that vocational and technical skills are flourishing and I watched young people with those skills competing to find who’s best in the world at the WorldSkills Competition held in Leipzig, Germany, earlier in the month. Over a thousand young people, representing 65 countries and regions across the world, were demonstrating their skills in everything from welding to web design. Korea topped the medal table (including gold for confectionery/pastry making with chocolate sculptures too impressive to eat) with Switzerland in second place. The level of technical expertise on show was astounding, but what impressed me more than anything was the poise and self-confidence along with the commitment to excellence and professionalism of all the competitors. And it wasn’t just for the competitors — it was a big festival of vocational skills for the general public. Anyone could try their hand at a new skill at a workbench or computer while young people could also seek advice on their choice of job and planning their career.

Now the bad news: OECD announced last week that unemployment in OECD countries is expected to  remain high throughout 2014, with young people and the low-skilled hit hardest . Unemployment can have long-lasting repercussions on young people.  Even when they do eventually get a job, they are likely to face an ongoing penalty in the labour market, earning significantly reduced wages over the course of their lifetime. And the psychological impacts can also be long lasting, as young people become discouraged, de-motivated and worried about their prospects for attaining economic independence in the future. And yet…in many OECD countries, there are thousands of jobs that remain unfilled, often requiring technical and vocational skills or providing the opportunity to learn them.

What these observations imply is that we have to do more to connect employers and prospective employees together. One way to do that is through vocational education and training (VET). Germany , Austria  and Switzerland have a strong VET tradition. But many OECD countries have not developed their VET systems as extensively as they might or their VET system is not responding effectively to the needs of employers. Indeed, employer representatives’ top priority for vet reform is to encourage closer partnership with employers . Another key obstacle to overcome is that many people see VET as only a second-best option for those who are not suited to academic education, so more able students are reluctant to pursue this path towards a career or they may even be actively dissuaded from doing so.

This must change. One way we can promote such a change is by communicating to students and parents alike that a high-quality VET education can be the ticket into the labour market and a good career path, even during an economic downturn. As this year’s Education at a Glance shows, across the OECD, individuals with a vocationally-oriented secondary education are more likely to be employed (76%) than those with a general upper secondary education (70%); they are also less likely to be unemployed.  Another way to encourage students to consider vocational training is by making the pathways between general and vocational education more flexible, so that at any point a student in vocational education can transfer to an academic programme and vice versa, without finding all their options closed off.  And of course, all VET programmes need to focus providing quality skills that are relevant in the labour market – equipping young people not just for their first job but for their longer-term employability. 

On 8 October, the OECD will release the first results from the Survey of Adult Skills (PIAAC) . The first-of-its-kind survey will give us a direct assessment of the literacy, numeracy and problem solving skills people have, together with information on the skills they use at home, in the workplace and in their communities and a great deal of background information, including their education pathways, qualifications and labour market experience. The survey results will provide countries with new evidence about the actual skill level and distribution of their 16-65 year olds as well as insights into where mismatches between skills supply and demand lie. These results will provide OECD and countries with new evidence we can use formulate better policies to help people to develop their skills, offer them to the labour market, and ultimately use them productively.

Yes, it’s going to be another tough year for a lot of people in OECD countries, particularly young people; but we must all work together – using our own unique set of skills – to turn the bad news into an opportunity to create something much better.

Links:
OECD work on skills
OECD Skills Strategy
OECD work on Vocational Education and Training
Skills Beyond School Report: United States
View Dr Barbara Ischinger’s keynote speech on Better Skills, Better Lives at the International Skills Standards Organisation conference “Tackling the Global Talent Gap”
Photo credit: WorldSkills Leipzig 2013

Education: The best protection against an economic crisis

by Dirk Van Damme
Head of the Innovation and Measuring Progress division, Directorate for Education and Skills

The insight that education is valuable both to individuals and to countries is not new. Using continuously improving data and statistical tools, we have come to understand and appreciate the magnitude of education’s impact on employment, income, health and life opportunities in general. From a purely economic point of view, private returns on investment are well beyond 10% per year, and public returns are only slightly below that figure. Fears that increasing participation and greater numbers of graduates – resulting in ever-increasing numbers of highly qualified people in the work force – would result in some kind of inflation, in diminishing returns and burgeoning graduate unemployment could not be confirmed by the data.

When the financial crisis erupted in 2007-08, rapidly turning into a global economic recession and a fiscal crisis in the Euro-zone and other countries, it was very difficult to predict its impact on education. Data for the years 2008 and 2009 showed that in the first years of the crisis, the impact on education remained limited and was confined to countries in severe crisis, such as Ireland, Iceland and Greece. Education is generally protected from shocks to the economic system because of its intrinsic slow pace of change. Individuals and families did not drastically alter their patterns of participation in education; and in the first years of the crisis, governments used stimulus packages and deficit spending to try to soften the blow, leaving education budgets more or less untouched. But we know that things started to change dramatically from 2010 onwards, when unemployment – especially among youth – climbed steeply and governments turned into austerity mode.

Education at a Glance 2013, the OECD’s reference on education indicators and statistics, for the first time provides a comprehensive set of data covering the years 2010 and 2011. The data convey a consistent, but also somewhat surprising picture. A great deal of the economic and social hardship caused by the crisis fell chiefly on less-educated individuals. The unemployment gap between well-educated young people and those who left school early widened during the crisis. On average across OECD countries, 5% of those with a tertiary education were unemployed, against 13% of those without an upper secondary education. Between 2008 and 2011 the unemployment rate for the latter group increased by 4%, while it rose by only 1.5% among the highly educated. The earnings gap widened as well: the average difference in earnings between highly educated and low-educated individuals grew from 75 percentage points to 90 percentage points between 2008 and 2011.

The message is clear: it is a person’s education that determines whether he or she will be extremely or only moderately exposed to the economic and social risks in times of crisis. Those without a minimal level of education, and certainly those of them without a stable job, find themselves without any shelter from the storm. Meanwhile, the relative returns on higher education increase. Some might argue that this is largely due to structural changes in the labour market: highly educated people taking the jobs of the middle-educated individuals, who, in turn, drive low-educated workers into unemployment. The earnings data do not seem to confirm this hypothesis: if tertiary-educated individuals were to take medium-skilled jobs en masse, their relative wage premium would not have increased as much as it did. In addition, the wage premium increases with age, which suggests that the higher level of skills among tertiary-educated workers is compensated in their salaries. In times of crisis and tough competition in the labour market, employers would certainly not be willing to value skills as much as they seem to do if there was no good reason to.

In short, the value of education increases during an economic crisis. Those who lack education, stand to lose a lot; those who have invested in it, can still reap its benefits.

Links:
For more information, and to download a copy of the book, visit the Education at a Glance website at: www.oecd.org/edu/eag.htm

Browse and share the book

How much do teachers cost?

by Eric Charbonnier and Etienne Albiser
Analysts, Directorate for Education and Skills

Can increasing the salaries of teachers lead to better learning outcomes? Does reducing class size have a positive effect on learning outcomes? Given the current background of tight public budgets, governments seeking to ensure value for money must ask themselves these questions before increasing the salary cost of teacher per student, as teachers account for a major part of education expenditure.

The latest edition of Education Indicators in Focus highlights that the salary cost of teacher per student is a combination of four factors: teachers’ salary, class size, the number of teaching hours in front of a classroom and the number of hours of instruction received by students.

Countries that have similar levels of expenditure on education do not necessarily have similar educational policies and practices. A given level of expenditure may result from a different combination of these factors. One country may pay higher salaries to teachers while another may have smaller class sizes and thus more teachers to pay.

Between 2000 and 2010, increases in the salary cost of teacher per student were mainly influenced by changes in teachers’ salaries and class size
 With the exception of France and Italy, the salary cost of teacher per student at the primary and lower secondary levels increased between 2000 and 2010, and on average it increased by one-third and one-quarter, respectively (for countries for which data is available). In the majority of cases, this increase was due to an increase in the level of teacher compensation (16% at the primary level and 14% at the lower secondary level). The largest salary increases (more than 50%, in constant prices) were seen in the Czech Republic, Estonia and Turkey.

During the same period, class size decreased, by 14% (primary) and 7% (lower secondary), but this was often the result of changing demographics and not of a change in education policies.

Little change in instruction time and teaching time
With the exception of a few countries, there was little or no change with respect to the two other variables (instruction time and teaching time) during the same period. This may be due to the political sensitivity of reforms in these areas. At the primary level, teaching time increased most significantly in the Czech Republic (200 hours) and instruction time increased the most in Iceland (by nearly 200 hours).

The higher the level of education, the higher the salary cost of teacher per student, with great disparities between countries
Spending on education rises sharply with the level of education. The OECD average salary cost of teachers is USD 2 307 per primary student, USD 2 856 per lower secondary student and USD 3 301 per upper secondary student. In some countries, the differences between the different levels of education is quite small (in Chile and Hungary it is less than USD 50) while in others it is quite important (exceeding USD 2 000 in the Flemish Community in Belgium).

In general, teachers of higher levels of education earn more money than teachers at lower levels. In addition, teaching time generally decrease as the level of education increases (meaning that more teachers are necessary to teach the same number of students).

Wrapping up
Reforms relating to these four factors have an impact on education expenditure and may also affect learning outcomes. However, the link between expenditure and outcomes is not straightforward. PISA results show that between 2000-2009, the performance of 15-years olds did not vary significantly in the majority of countries, regardless of the changes we have seen in instruction time, teaching time, class size and teacher compensation. What is more, changes relating to pedagogy may have an impact on outcomes without necessarily having an impact on expenditure.

The bottom line is that in the past ten years, increasing teachers’ salaries and reducing class size have not led to better learning outcomes in the majority of countries. This raises the question: has all of the additional money been well spent?

For more information
On this topic, visit:
Education Indicators in Focus: www.oecd.org/education/indicators
On the OECD’s education indicators, visit:
Education at a Glance 2012: OECD Indicators: www.oecd.org/edu/eag2012
Chart source: OECD Education at a Glance 2012:  Indicator B7 (www.oecd.org/edu/eag2012)

What are the social benefits of education?

Elisabeth Villoutreix
Communications Officer, Directorate for Education

The link between education and social benefits has long been recognised, as far back as Ancient Greece when Aristotle and Plato pointed out that education is central to the well-being of society. More recently, in the past few decades, research has supported this conventional wisdom, revealing that education not only enables individuals to perform better in the labour market, but also helps to improve their overall health, promote active citizenship and contain violence.

So how can education predict social outcomes such as life expectancy, civic engagement and general life satisfaction?

The latest issue of Education Indicators in Focus seeks to answer this question by comparing the social benefits of education in selected OECD countries.

Data show that life expectancy is strongly associated with education. On average, among 15 OECD countries with available data, a 30-year-old tertiary-educated man can expect to live eight years longer than a 30-year-old man who has not completed upper secondary education.

Data also show that adults who have attained higher levels of education are generally more likely than those with lower levels of educational attainment to report stronger civic engagement, in terms of voting, volunteering, political interest, and interpersonal trust.

Apart from raising  income levels, education has the potential to help individuals develop skills, improve  social status and gain access to networks that could lead to enhanced social outcomes.  By fully recognising the power of education, policy makers could better address diverse societal challenges.

For more information
On this topic, visit:
Education Indicators in Focus: www.oecd.org/education/indicators 
On the OECD’s education indicators, visit:
Education at a Glance 2012: OECD Indicators: www.oecd.org/edu/eag2012 
On the OECD’s Indicators of Education Systems (INES) programme, visit:
INES Programme overview brochure
Chart Note: e figures describe the differences in the expected years of life remaining at age 30 across education levels.
1. Year of reference 2009.
2. Year of reference 2005.
3. Year of reference 2006.
4. Year of reference 2008.
5. Year of reference 2007-10.
6. e OECD average is the average for those countries shown in the chart.
Countries are ranked in descending order of the difference in life expectancy among men at age 30.
Chart source: Education at a Glance 2012: OECD Indicators, Indicator A11 (www.oecd.org/edu/eag2012) 

Are countries educating to protect against unemployment?

by Dirk Van Damme
Division Head, Innovation and Measuring Progress (IMEP) and Head of Centre for Educational Research and Innovation (CERI)

More people than ever before now reach a level of educational attainment equivalent to upper secondary education. The available evidence is very conclusive: this level of education can be considered a minimum level to ensure a job and a living wage. As the latest issue of the OECD’s Education Indicators in Focus details, the difference in unemployment risks in OECD countries between individuals with and without an upper secondary qualification is significant. In 2010, across OECD countries, 19.1% of 25-34 year-olds without an upper secondary qualification were unemployed, compared with 9.8% of young adults of the same age who had an upper secondary qualification. And without an upper secondary qualification, the risk of poverty is looming: some 27% of people without an upper secondary education earn less than half the median income – around 10 percentage points more than the proportion of people who do have that level of education.

The negative effects of lacking an upper secondary qualification are excacerbated during the crucial phase of transition from education to work. Among NEETs  (not employed nor in education and training) in 2010, there were 8 percentage points more 20-24 year-olds without an upper secondary education than 20-24 year-olds with that level of education. In 2010, in Estonia, France, Ireland, the Slovak Republic and Spain, at least 25% of the 20-24 year‑olds who had not attained an upper secondary education were neither in school nor employed.

So, countries have very good reasons to ensure that as many young people as possible graduate from upper secondary education. Over the past decades almost all OECD countries have seen dramatic increases in educational attainment from one generation to the next. The average difference between the 25-34 and 55‑64 year‑old generations in OECD countries was 20 percentage points, but in Chile, Greece, Ireland, Italy, Korea, Portugal and Spain the difference was 30 percentage points or more.

Most OECD countries – especially European ones – have increased their upper secondary graduation rates over the past ten years. As the graph above indicates, this trend coincided with declining numbers of 20-24 year-olds who were neither in education nor employed. But the start of the economic crisis in 2008 was a turning point: the size of the NEET population started to swell again. The wage gap between people with an upper secondary qualification and individuals with a tertiary level qualification increased. The evidence suggests that the crisis has accelerated job polarisation based on skills levels. People without an upper secondary qualification are highly vulnerable to unemployment, while those who have an upper secondary education are working for less money. In today’s unstable economy, an  upper secondary qualification no longer provides sufficient insurance against unemployment and low income.

For more information
On this topic, visit:
Education Indicators in Focus: www.oecd.org/education/indicators 
On the OECD’s education indicators, visit:
Education at a Glance 2012: OECD Indicators: www.oecd.org/edu/eag2012 
On the OECD’s Indicators of Education Systems (INES) programme, visit:
INES Programme overview brochure
Chart source: Education at a Glance 2012: OECD Indicators, Indicators A1 (www.oecd.org/edu/eag2012).

Investing in people, skills and education for inclusive growth and jobs

by J.D. LaRock
Senior Analyst, Innovation and Measuring Progress Division, Directorate for Education

As the spectre of another economic downturn looms large in many countries and is already a reality in others, new data from the 2012 edition of Education at a Glance: OECD Indicators – released today – provides powerful insights into the link between education, economic progress and social mobility around the world.

For example, as detailed in the book’s new indicator on education and economic growth, more than half of the GDP growth in OECD countries over the past decade is related to labour-income growth among workers with higher education.  Indeed, even as GDP across all OECD countries shrank by 3.8% during the global recession year of 2009, growth in labour income among people with higher education contributed nearly 0.4% to the GDP of these countries overall. In contrast, the contraction of labour income that year among people with a medium level of education reduced the GDP by 0.8%, while shrinking incomes among people with lower levels of education trimmed another 0.5% off GDP.

In light of the substantial role education can play in promoting economic growth, countries’ success in assuring that younger people achieve a higher level of education than their parents – what is known as intergenerational mobility in education – is especially important. The new indicator on educational mobility in this year’s Education at a Glance shows that many countries are making good progress in this regard.  On average across all OECD countries, 37% of 25-34 year-old non-students have surpassed their parents’ level of education, while only 13% have achieved a lower level.  Half of younger adults in OECD countries have achieved the same level of education as their parents: 13%, a low level of education; 21%, a medium level, and 16%, a high level.

Meanwhile, as detailed in the new indicator on early childhood education, many OECD countries are working hard to expand schooling opportunities for their youngest children. For example, among OECD countries with data for both years, 81% of four-year-olds were enrolled in early childhood programmes in 2010, up from 77% in 2005.  What’s more, enrolments among three-year-olds rose from 64% to 69% during this same period. Since participation in early childhood education is linked to better performance later on in school, these developments bode well for a future in which improving young people’s skills will be more important than ever.

At the same time, this year’s Education at a Glance also shows that many OECD countries need to address the growing problem of youth who are not in employment, education or training. After several years of decline, the so-called “NEET” population began to rise in 2009 and spiked to nearly 16.0% in 2010 – a sign of the particular hardship young people have borne as a result of the global recession. As such, OECD countries would do well to examine measures that can productively engage people in this crucial age group, such as vocational education and training programmes and opportunities for non-formal education and training.

As always, the 2012 edition of Education at a Glance contains a rich array of indicators on educational attainment, graduation and completion, education financing, enrolment trends and the globalisation of higher education, and schools and teachers. In addition to the data discussed above, this year’s edition contains a number of other new indicators, including information on how the career aspirations of boys and girls compare to the fields young men and women study in higher education ; the factors that influence immigrant students’ performance in school ; who makes key decisions in education systems ; and the pathways and gateways to gain access to secondary and tertiary education.

For more information, and to download a copy of the book, visit the Education at a Glance website at: www.oecd.org/edu/eag2012
Browse and share the book
Education at a Glance Highlights
Watch the video interview with Andreas Schleicher
Photo credit: Digital Vision/Inmagine

What will the global talent pool look like in 2020?

by Pedro Garcia de León, Corinne Heckmann, and Gara Rojas González 
Innovation and Measuring Progress Division, Directorate for Education

The “global talent pool” can be described in a lot of different ways.  But in an era in which having a higher (tertiary) education is increasingly a minimum requirement for successful entry into the labour force, one way to quantify it is to look at the number of people around the world who are obtaining a higher education degree.

As the latest issue of the OECD’s series Education Indicators in Focus details, by that measure, the global talent pool is exploding across OECD and G20 countries. What’s more, it’s likely to grow far larger by the year 2020.

In the last decade alone, the number of younger adults with higher education degrees has grown at a remarkably fast clip. This is particularly true for non-OECD G20 countries like Argentina, Brazil, China, India, Indonesia, the Russian Federation, Saudi Arabia and South Africa, where the number of 25-34 year-olds with a higher education degree increased from 39 million in 2000 to an estimated 64 million in 2010. By contrast, the number of younger adults with higher education degrees in OECD countries increased from 51 million to an estimated 66 million during the same period.

In addition, the rapid expansion of higher education in non-OECD G20 countries has significantly altered the distribution of the talent pool among countries. A decade ago, one in six 25-34 year-olds with a higher education degree was from the United States, and a similar proportion was from China. Twelve percent came from the Russian Federation, and about 10% each were from Japan and India. But by 2010, China was at the head of the pack, according to OECD estimates, accounting for 18% of 25-34 year-olds with a tertiary education.  The United States followed with 14%, the Russian Federation and India each had 11%, and Japan had 7%. 

These trends are likely to intensify further in the years ahead. According to OECD projections, there will be more than 200 million 25-34 year-olds with higher education degrees across all OECD and G20 countries by the year 2020 – and 40% of them will be from China and India alone. By contrast, the United States and the European Union countries are expected to account for just over a quarter of young people with tertiary degrees in OECD and G20 countries. 

In fact, these figures may underestimate the future growth of the global talent pool, because a number of countries – notably China, the European Union countries, and the U.S. – are pursuing initiatives to increase higher education attainment rates even further. 

The explosive growth of the  talent pool raises a key question: With all of these highly-educated people emerging around the world, will the global labour market be able to absorb the increased supply?  
Evidence from science and technology occupations – key “knowledge economy” jobs – suggests that it can. Between 1998 and 2008, employment in science and technology occupations increased at a faster rate than total employment in all OECD and G20 countries with available data. The average annual growth rate was uniformly positive, ranging from 0.3% in China to 5.9% in Iceland. 

This consistently upward trend signals that the demand for employees in this knowledge economy sector hasn’t reached its ceiling. Applied to the overall labour market, the implication is that individuals from increasingly better-educated populations will continue to have good employment outcomes, as long as national economies continue to become more knowledge-based.  

As such, countries may be well-advised to pursue efforts to build their knowledge economies, in order to avoid skills mismatches and lower returns on education among their higher-educated populations in the future.

For more information
On this topic, visit:
Education Indicators in Focus: www.oecd.org/education/indicators 
On the OECD’s education indicators, visit:
Education at a Glance 2011: OECD Indicators: www.oecd.org/edu/eag2011 
On the OECD’s Indicators of Education Systems (INES) programme, visit:
INES Programme overview brochure (link)
See also: IMHE General Conference 2012 "Attaining and Sustaining Mass Higher Education", Paris, 17-19 September 2012
Chart source: OECD Database, UNESCO and National Statistics websites for Argentina,
China, India, Indonesia, Saudi Arabia and South Africa.

How can education help tackle rising income inequality?

By Ji Eun Chung
Innovation and Measuring Progress Division, Directorate for Education

See instructions below for how to read the chart

The gap between the rich and poor has widened in OECD countries over the past 30 years. As the latest issue of the OECD’s new brief series Education Indicators in Focus describes, the average income of the richest 10% of people in OECD countries was about nine times greater than the income of the poorest 10% before the onset of the global economic crisis. This ratio was 5 to 1 in the 1980s.

What’s more, existing income inequality may also limit the income prospects of future generations in some countries. In countries with higher income inequality – such as Italy, the United Kingdom, and the United States – a child’s future earnings are likely to be similar to his or her father’s, suggesting that socio-economic background plays a large role in the development of children’s skills and abilities. Meanwhile, in countries with lower income inequality – like Denmark, Finland, and Norway – a child’s future income is not as strongly related to his or her family’s income status. In these countries, the development of children’s skills and abilities has a weaker link with socio-economic factors.

The implications for education policy are clear. Education policies focusing on equity in education may be a particularly useful way for countries to increase earnings mobility between generations and reduce income inequality over time. Countries can work towards this goal by giving equal opportunities to both disadvantaged and advantaged students to achieve strong academic outcomes – laying a pathway for them to continue on to higher levels of education and eventually secure good jobs.

Four top performers on the 2009 PISA reading assessment show the potential of this approach. Canada, Finland, Japan, and Korea all have education systems that put a strong focus on equity – and all have yielded promising results. In each of these countries, relatively few students performed at lower proficiency levels on the PISA reading assessment, and high proportions of students performed better than would be expected, given their socio-economic background.

Yet while each of these countries focuses on equity, they’ve pursued it in different ways. In Japan and Korea, for example, teachers and principals are often reassigned to different schools, fostering more equal distribution of the most capable teachers and school leaders. Finnish schools assign specially-trained teachers to support struggling students who are at risk of dropping out. The teaching profession is a highly selective occupation in Finland, with highly-skilled, well-trained teachers spread throughout the country. In Canada, equal or greater educational resources – such as supplementary classes – are provided to immigrant students, compared to non-immigrant students. This is believed to have boosted immigrant students’ performance.

Income inequality is a challenging issue that demands a wide range of solutions. In a world of growing inequality, focusing on equity in education may be an effective approach to tackle it over the long run.

For more information
On this topic, visit:
Education Indicators in Focus: www.oecd.org/education/indicators
Equity and Quality in Education - Supporting Disadvantaged Students and Schools
On the OECD’s education indicators, visit:
Education at a Glance 2011: OECD Indicators: www.oecd.org/edu/eag2011
Divided we stand: Why inequality keeps rising: www.oecd.org/els/social/inequality
On the OECD’s Indicators of Education Systems (INES) programme, visit:
INES Programme overview brochure

Chart source: Source: D'Addio (2012, forthcoming), “Social Mobility in OECD countries: Evidence and Policy Implications”; OECD (2008), Growing Unequal?, www.oecd.org/els/social/inequality/GU; OECD Income distribution database.


How to read the chart: This chart shows the relationship between earnings mobility between generations of a family, and the prevalence of income inequality in different countries. Overall, countries with higher levels of income inequality tend to have lower earnings mobility between generations, while countries with lower levels of income inequality tend to have higher earnings mobility.

Bridging the skills gap

by Kathrin Hoeckel
Analyst, Skills Beyond Schools Division, Directorate for Education

If you were to ask someone which countries tend to bear the brunt of a shortage of skills in this era of globalised trade, you couldn't fault them for thinking of developing countries.

While this is certainly true, the problem is by no means limited to poorer countries. Indeed, even in countries at the forefront of the developed world and consistently at the top of the PISA rankings, skills shortages can plague the economy.

Two such countries are Australia and Canada.

The Canadian Council on Learning says there is a clear “gap between the demand for workers with strong literacy and numeracy skills and the supply of Canadians who possess them.” They point out that the growth in the information communication technology industries, coupled with the reduced demand for unskilled workers due to foreign outsourcing, has only served to intensify the need for skilled workers. The question is why there is such a gap when Canadian teenagers do so well on tests such as PISA's. The answer, they posit, lies in the failure of adults to keep up with the “demands of the emerging knowledge society and information economy”. In other words, lifelong learning is as essential to a strong economy as successful schools (as can be seen in the OECD’s Education at a Glance statistics on adult participation in education and learning, job-related training is comparatively low in Canada).

Australian companies are also hard hit by the skills gap. The Australian Institute of Management recently released a study that found 82% of organisations admit to a skills shortage in their workplace, with middle management lacking particularly in leadership and technical skills.

Brian Schmidt, Australia's 2011 Nobel Prize winner for Physics, feels that a key problem is the lack of skilled teachers, particularly in maths and science. He points to the OECD’s Education at a Glance statistics on teacher salaries, which indicates that there tends to be a correlation between well paid teachers and students that excel.

The country's mining industry is suffering, in Mr Schmidt's opinion, from a direct consequence of this. He says that the industry's lack of highly trained engineers threatens the resource boom currently under way in Australia. He relates how the chair of the mining company BHP Billiton told him the biggest problem his company faces is finding highly skilled employees competent in mathematics.

The consequences could be dire for Australia. BHP Billiton predicts that the mining industry alone will require an additional 150 000 workers over the next five years.

Furthermore, Chris Evans, Australia's Minister for Tertiary Education and Skills, estimates that Australia will need over 2 million additional workers by 2015 with higher vocational education and training (VET) qualifications. To meet this challenge, Australia drew up ambitious plans just last year to improve its existing VET system (which, as Learning for Jobs: OECD Reviews of Vocational Education and Training shows, is already quite strong) by investing up to €15 billion by 2020.

In Latin America, an altogether different region of the world, the economic pain from the skills gap – evocatively known in Spanish as “la brecha”, or the breach – is also acutely felt. According to the Inter-American Development Bank (IDB), youth unemployment has increased across Latin America more than any other region in the world, and this can be directly attributed to young people lacking the skills required by the labour market. Not surprising when time and time again the research shows that poor skills go hand in hand with economic hardship.

In a study released earlier this month, the IDB stated that the youth in Latin America have a long way to go in developing the “interpersonal skills the market requires, such as responsibility, communication and creativity”. Its research shows that the majority of young workers across the region have informal jobs and lack social benefits.

One thing that is common to all these countries is that children from disadvantaged socio-economic backgrounds are disadvantaged when it comes to foundation skills in reading, mathematics and science (see OECD’s Education at a Glance statistics on equality in educational outcomes and opportunities). However, countries with the very best scores in PISA tend to have schools that are more inclusive. In other words, students can score well regardless of their socio-economic background. This in turn benefits the economy and society as a whole.

For if knowledge and skills are the global currency of the 21st century, countries will do well to stock up on their reserves. They can do so by encouraging people to learn, enticing skilled people to enter their countries, encouraging people to use and build their skills at work, retaining skilled people, matching skills to demand, and finally increasing the demand for high-level skills. That goes for economic heavyweights and flyweights alike.

Interested in learning more? Watch out for the OECD Skills Strategy, coming in May 2012, where we will lay the land for bridging the skills gap, turning brain drain into brain exchange, coping with ageing societies and declining skills pools and more.

Links:
OECD Skills Strategy
Education at a Glance 2011: OECD Indicators
Programme for International Student Assessment (PISA)

Photo credit: © olly / Shutterstock

Women’s outcomes in education and employment: strong gains, but more to do

by Éric Charbonnier and Corinne Heckmann
Innovation and Measuring Progress Division, Directorate for Education

There’s no denying it: when it comes to education and employment, women are on a roll, all over the world.  As described in the latest issue of the OECD’s new brief series Education Indicators in Focus, the achievement gap between boys and girls has narrowed so much at lower levels of education that the focus of concern is now on the underachievement of boys.  On the 2009 PISA reading assessment, for example, 15-year-old girls outperformed boys in every OECD country, on average by 39 points – the equivalent of one year of school.

Young women are also making strong progress in higher education in OECD countries.  In 2000, 51% percent of women could be expected to enter a university-level programme at some point in their lives; today, the number is 66%.  In fact, the proportion of women who hold a university-level qualification now equals or exceeds that of men in 29 of the 32 OECD countries for which data are comparable. This figure is below 50% only in China, Japan, Korea and Turkey.

At the same time, still more can be done to improve outcomes for girls and young women in the classroom.  In mathematics, for example, 15-year-old boys tend to perform slightly better than girls in most countries, while science performance is more variable.  And in higher education, women remain under-represented at the most advanced levels.  Across all OECD countries, less than half of advanced research qualifications such as doctorates were awarded to women in 2009.  In Japan and Korea, the figure is only around 30%.  This pattern holds in all countries except Brazil, Finland, Iceland, New Zealand, Poland, Portugal and the United States.

In addition, some fields of study are still branded as “masculine” or “feminine”. In 2009, more than 70% of higher education students in the field of education were women, and an average of 75% of the degrees in the fields of health and welfare also went to women. By contrast, in most countries, fewer than 30% of all graduates in the fields of engineering, manufacturing and construction were women.

Nonetheless, women’s strides in education have led to improved labour market outcomes for women overall. For instance, the gender gap in employment narrowed from 25 percentage points in 2000 to 21 percentage points in 2009 among those without an upper secondary qualification, and from 19 percentage points in 2000 to 15 percentage points in 2009 among those with an upper secondary qualification. And it’s narrower still among those with a higher education qualification, shrinking from 11 percentage points in 2000 to 9 percentage points in 2009.

Increasingly, OECD countries are doing more to address gender gaps – both in education and employment.  For example, in the Czech Republic, Germany and the Slovak Republic, the proportion of women graduating with science degrees grew by more than 10 percentage points between 2000 and 2009.  As a result, these countries are now closer to the OECD average of 40% -- a figure that has remained stable over the past decade. In 2000, the European Union announced a goal to increase the number of university graduates in mathematics, science and technology by at least 15% by 2010, and to reduce the gender imbalance in these subjects. So far, however, progress toward this goal has been marginal.

On the employment side, the Nordic countries, Germany and Portugal have instituted policies allowing fathers to receive parental leave and income support so their spouses can remain in the workforce.  In Iceland, Norway and Spain, some firms are required to have at least 40% of their boardroom seats assigned to women. Meanwhile, other companies, such as Deutsche Telekom, have introduced voluntary quotas for women in management and family-friendly practices such as flex-times and tele-working.

The bottom line is clear: while girls and women have made strong gains, it’s time to finish the job.  To promote gender equality even further, policymakers should be encouraged to pursue policies to increase mathematics and science performance among girls – as well as reading achievement among boys.  Meanwhile, initiatives to break down gender stereotypes in fields of study and progressive corporate policies can do more to increase women’s employment opportunities.

For more information
On this topic, visit:
Education Indicators in Focus
OECD Gender Initiative
www.oecd.org/gender/equality
On the OECD’s education indicators, visit:
Education at a Glance 2011: OECD Indicators
www.oecd.org/edu/eag2011
On the OECD’s Indicators of Education Systems (INES) programme, visit:
INES Programme overview brochure
Chart source: OECD Education Database

Increasing higher education access: one goal, many approaches

by J.D. LaRock
Senior Analyst, Innovation and Measuring Progress Division, Directorate for Education

Few would dispute that having a higher education is more important than ever to help people build positive economic futures and strengthen the knowledge economies of countries. Yet as the second issue of the OECD’s new brief series Education Indicators in Focus explains, OECD countries have adopted dramatically different strategies for increasing higher education access – both in terms of how higher education is financed, and in the level of financial support they provide to individuals seeking a degree.

For example, in countries with more progressive tax structures, such as Denmark, Finland, Iceland, Norway and Sweden, students pay low or no tuition fees and have access to generous public subsidies for higher education. Tuition fees are much higher in Australia, Canada, New Zealand, the Netherlands and the United States, but students in these countries also have access to significant financial support.

Before recent reforms in Japan and in Korea, students paid comparatively high tuition fees, but had relatively low access to public subsidies. Meanwhile, in Austria, Belgium, the Czech Republic, France, Ireland, Italy, Portugal, Switzerland, Spain and Mexico, students pay little or nothing for higher education, but have limited access to financial aid.

At a time when most OECD countries are experiencing surges in higher education enrolments – but also face significant budget constraints – which model stands a better chance of promoting higher education access and positive outcomes for students in the most equitable way? As it turns out, there’s something to be learned from several of them.

As detailed in the OECD’s thematic review of higher education, charging a moderate level of tuition fees – while simultaneously giving students opportunities to benefit from comprehensive financial aid systems – is an effective way for countries to increase access to higher education, stretch limited public funds, and promote equity by acknowledging the significant private returns that students receive from higher education.

In particular, access to robust financial aid seems to be the key.  For example, countries with especially well-developed student support systems – like Australia, New Zealand, the United Kingdom and the United States – all have above-average university entry rates, even though they also have comparatively high tuition fees.

At the same time, the type of financial aid countries offer is also critical. The OECD’s review suggests that financial aid systems that couple means-tested grants and loans that have income-contingent repayments not only promote access and equity at the front end of higher education, but also lead to better outcomes for students at the back end. Australia and New Zealand have used this approach to mitigate the impact of high tuition fees, encourage disadvantaged students to enter higher education, and reduce the risks of high student loan indebtedness. Other OECD countries that use this strategy include Chile, the Netherlands, the United Kingdom, and the United States.

Increasingly, countries are adjusting their higher education financing and support systems in other ways as well. For example, more countries have raised tuition fees for international students in recent years, in part to shore up the finances of their higher education systems. At least 14 OECD member and partner countries differentiate tuition fees among fields of study to account for the higher cost of operating some academic programmes.  Some countries like Australia have even attempted to link higher education charges to labour-market opportunities by lowering tuition fees for fields with skills shortages.

In an era of booming enrolments and tightening belts, it won’t be surprising if still more changes are on the horizon.

For more information
On this topic, visit:
Education Indicators in Focus
On the OECD’s education indicators, visit:
Education at a Glance 2011: OECD Indicators  www.oecd.org/edu/eag2011
On the OECD’s Indicators of Education Systems (INES) programme, visit:
INES Programme overview brochure

Related blog post:
Higher education: an insurance policy against global downturns

Chart excludes OECD countries for which specific data on public subsidies is not available.
Source: Education at a Glance 2011: OECD Indicators, Indicator B5 (www.oecd.org/edu/eag2011).