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

What makes a NEET?

by Karinne Logez
Statistician, Directorate for Education and Skills

NEETS - young people aged between 15 and 29 years old who are not in employment, education or training - are a potential problem both for society and for themselves. The proportion of young people neither working nor studying offers an insight into how well economies manage the transition between school and work – better than youth unemployment rates, which do not take into account the numbers in education. It's especially illuminating when the figures are broken down into those who are still looking for work ("unemployed") and those who have dropped out of the labour market altogether ("inactive"). Particularly worrying are those in the very youngest age bracket – aged 15 to 19 – who may not have completed their secondary education and are disproportionately likely not even to be seeking work. There’s a risk they may never catch up with their better educated peers.

So what makes a NEET? And what can governments do to make sure young people successfully make the transition from education into work? The latest edition of Education Indicators in Focus suggests that there are several intertwined factors.

Is it the educational system?
As well as increasing their education participation rates, making the educational system more relevant to the labour market may help reduce NEET rates. Countries with widespread work-experience programmes, offering recognised vocational qualifications, see higher levels of young people in employment and lower NEET rates, although the effect has been more muted in this current economic crisis.

Is it the state of the economy?
NEET rates and employment-to-population ratios tend to mirror the economic cycle. When times are tough it’s harder to find a job or keep the one you have if you’re competing with more experienced workers. Fortunately, many young people react by staying on longer in education instead, so when the economy picks up, they’ve got a head start finding work. As young people are the main source of new skills in the labour force, increasing education participation rates are an encouraging trend.

Is it a cultural thing?
On average, young women are more likely to be NEET across the OECD than young men. In some countries – such as Turkey and Mexico – this effect is particularly marked. It may reflect expectations that women will be concentrating on starting a family than forging a career, particularly where young women are disproportionately inactive rather than unemployed and seeking work.

Is it an age thing?
Generally, the demographics are on the young people’s side – as the population in OECD countries age, and the proportion of young people in the population fall, both employment rates and education participation rates should increase. At the moment, economic stagnation has counteracted the effect of demographics, but once the economy picks up, young people should be well placed to forge ahead.

It’s all of these
Clearly the problem of young people dropping out of education and the labour market is a complex one with no single determining cause. However, the consequences for both individuals and society mean that it’s important to prevent young people becoming NEETs – and help reintegrate them back into work or education if they do.

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
OECD's Actin Plan for Youth
OECD Forum 2013: Give youth a chance
OECD Skills Strategy Spotlight: Apprenticeships and Workplace Learning
OECD Skills Strategy

Chart source: OECD Education at a Glance 2013:  Indicator C5 (www.oecd.org/edu/eag.htm) to be released 25 June, 2013

Getting our youth back to work

by Andreas Schleicher
Deputy Director and Special Advisor on Education Policy to the OECD's Secretary-General

If there’s one lesson we’ve learned over the past few years, it’s that we cannot simply bail ourselves out of a crisis, we cannot solely stimulate ourselves out of a crisis and we cannot just print money our way out of a crisis. But we can become much better in equipping more people with better skills to collaborate, compete and connect in ways that drive our economies forward.

There is no group for whom this is more important than today’s young people. Between 2008 and 2011, the gap in unemployment rates between higher- and less-educated youth widened dramatically. While young people with advanced skills have weathered the crisis reasonably well, those without foundation skills have suffered. Unemployment among young people without a high school education soared 20% in Estonia and Ireland and 15% in Greece and Spain. The short-term impact on individuals, families and communities beg for urgent policy responses; the longer-term impact, in terms of skills loss, scarring effects and de-motivation, will affect countries’ potential for recovery. Without the right skills, people will languish on the margins of society, technological progress will not translate into economic growth, and countries can’t compete in the global economy.

What’s often overlooked amid the grim statistics is that a few countries, like Austria, Chile, Germany and Korea saw a sizeable drop in unemployment rates among their low-skilled youth. What this tells us is that, with the right policies and economic environment, we can do something about this and it seems to boil down to three actions: build the skills that foster employability; give young people the opportunity to make their skills available to the labour market; and ensure that those skills are used effectively at work.

To begin, we need to be able to anticipate the evolution of the labour market: we need to know what skills will be needed to reignite our economies. The coexistence of unemployed graduates on the street, while employers say they cannot find the people with the skills they need, shows clearly that more education alone does not automatically translate into better jobs and better lives.

We need to put a premium on skills-oriented learning throughout life instead of on qualifications-focused education that ends when the working life begins. We need to tackle unacceptable rates of school dropout by offering more relevant education and second-chance opportunities, and by offering work experience to young people before they leave education.

OECD’s Learning for Jobs analysis shows that skills development is far more effective if the world of learning and the world of work are integrated. It’s not difficult to understand why. Skills that aren’t used can atrophy. And, compared to purely government-designed curricula taught exclusively in schools, learning in the workplace allows young people to develop “hard” skills on modern equipment and “soft” skills, such as teamwork, communication and negotiation, through real-world experience. Hands-on workplace training can also help to motivate disengaged youth to stay in or re-engage with the education system.

But building skills is the relatively easy part of the plan; far tougher is providing opportunities for young people to use their skills. Employers might need to offer greater flexibility in the workplace. Labour unions may need to reconsider their stance on rebalancing employment protection for permanent and temporary workers. Enterprises need reasonably long trial periods to enable employers giving those youth who lack work experience a chance to prove themselves and facilitate a transition to regular employment. And some countries may need to review the minimum wage for younger workers to make it easier for low-skilled young people to get their first job and discourage early school leaving by lowering the opportunity cost of staying on at school.

Last but not least, if all of this is about more than getting young people temporarily off the street, we need to ensure that talent is used effectively. Skills mismatch is a very real phenomenon that is mirrored in people’s earnings prospects and in their productivity. Knowing which skills are needed in the labour market and which educational pathways will get young people to where they want to be is essential. High-quality career guidance services, complemented with up-to-date information about labour-market prospects, can help young people make sound career choices.

We also need to maintain and expand the most effective active labour-market measures, such as counselling, job-search assistance and temporary hiring subsidies for low-skilled youth; and we need to link income support for young people to their active search for work and their engagement in measures to improve their employability.

But none of this is going to work unless everyone is involved: governments, which can design financial incentives and favourable tax policies; education systems, which can foster entrepreneurship as well as offer vocational training; employers, who can invest in learning; labour unions, which can ensure that investments in training are reflected in better-quality jobs and higher salaries; and individuals, who can take better advantage of learning opportunities and shoulder more of the financial burden. This week OECD will launch an Action Plan for Youth to be presented at the Organisation’s annual Ministerial Meeting in Paris in order to step up government’s efforts to tackle high youth unemployment and strengthen their education systems to better prepare young people for the world of work. It’s time for all of us to take the lessons we learned through the crisis and turn them into a sustainable plan to get our young people back on the path to prosperity.

Links:
OECD Forum 2013: Give youth a chance
skills.oecd: Working with youth
OECD Skills Strategy Spotlight: Apprenticeships and Workplace Learning
OECD Skills Strategy
OECD Survey of Adult Skills (PIAAC)
Photo credit: Young adult looking for work / Shutterstock

Earmarking Justice

by Justine Doody
Freelance Journalist and Editor, SGI News

In his State of the Union address on 12 February 2013, US President Barack Obama proposed a new initiative to improve access to high-quality early childhood education. The action is much needed: according to OECD figures from 2010, only 51 per cent of US children were enrolled in pre-primary education at age three, rising to 69 per cent at age four.

By comparison, in New Zealand, which became in 1986 the second country in the world to have its ministry of education take responsibility for early childhood education, 95 per cent of children in 2012 had been through an early childhood education programme before starting school at five years old.

Early childhood education is linked to improved prospects for future learning and employment. And, as the new Intergenerational Justice Index (IJI) study from the Bertelsmann Foundation's Sustainable Governance Indicators (SGI) project shows, it can help to level the playing field in terms of allocating resources fairly between older and younger generations.

As demographic changes lead to ageing populations in many OECD countries, the increased weight of older people in voting systems means they have more power than ever before to direct policy preferences. So, more than ever, it is important that countries take steps to ensure their policies provide future generations with at least the same chances that their parents and grandparents had.

Estonia Ranks Top, the United States Bottom

To find out which countries best provide for younger and future generations, SGI's Intergenerational Justice Index (IJI) measured OECD countries on several indicators: ecological footprint, child poverty, public debt per child and spending bias towards older generations.

The best performing country, SGI found, was Estonia, while New Zealand achieved a creditable fourth place. The United States ranked bottom of all the 29 countries studied, followed by Japan and Italy. If these countries do not change their current policy directions, their young people will grow up facing burdens of injustice, in terms of public debt, ecological degradation, and social immobility, that will be difficult, if not impossible, to overcome.

IJI offers policy recommendations that could help to shift the balance and help countries to improve their levels of intergenerational justice. The study suggests intergenerational earmarking as a way to rebalance public spending towards the young. Revenues raised in addressing one form of intergenerational justice, for example, environmental taxes, could be used to mitigate other areas of injustice, for instance by offering child tax credits or family allowances.

Proxy Votes for Children Could Foster Intergenerational Justice

Another interesting, albeit potentially controversial, recommendation is the introduction of proxy voting for children. Parents would be given the right to vote on behalf of their children, with a child's vote equalling one-half of an adult vote. In this way, children would be given a voice in politics, and parents would be rewarded for their societal contribution.

High-quality early childhood education is especially important. Research has found that children who participate in early childhood programmes are more likely to graduate from high school, hold down jobs, and earn more money. They are less likely to find themselves on state welfare or to go to prison.

The experience of high-quality early childhood education particularly benefits children from disadvantaged backgrounds, which means that providing early childhood programmes could work as a corrective social justice measure as well as an intergenerational rebalancing.

In New Zealand, beginning in 2007, three-year-olds were offered two free years of pre-school. Children attend programmes for 20 hours a week, 48 weeks of the year. The government hopes that by 2016, 98 per cent of children will receive early childhood education.

But despite this excellent record, there are concerns about the programme's future. Education unions complain that funding cuts are affecting the quality of early childhood education. Recently, the word 'free' was removed from the government strategy; now, almost half of early childhood education providers, hit by increasing costs and lower subsidies, are asking for extra fees from parents. Shifting costs onto parents could limit the availability of high-quality education for disadvantaged families.

Prospects for the US Seem Bleak

The US government says that in the United States, only 3 in 10 four-year-olds have access to high-quality early childhood education programmes. Socio-economically disadvantaged children are least likely to be in early childhood education programmes: just 59 per cent of the poorest US children are in pre-kindergarten, as compared to 90 per cent of children from wealthier homes. The president's programme is to implement free access to high-quality pre-school for all four-year-olds from families at or below 200 per cent of the poverty line.

To receive federal funding, states would have to meet strict requirements. All teachers must have a bachelor’s degree and be given access to on-going professional development. Teachers’ salaries should be comparable to those for teachers in higher levels of the education system. Class sizes should remain small and activities should cover the entire school day. Curricula should measure up to state standards and programmes must be continuously evaluated. As it stands, few states would be able to meet these strict standards and qualify for federal money.

However, it is unclear how the US programme would be financed. The president’s 2014 budget proposal includes a plan to pay for universal preschool by increasing taxes on cigarettes, which could have positive public health outcomes as well as providing a revenue stream for the programme. But even if the tax succeeded in getting past the vested interests that would oppose it, such “sin taxes” have diminishing returns over time, raising questions about future funding.

Any new federal funding is supposed to be matched by state funding. But because of budget constraints, many states have already cut funding for their existing early childhood education programmes, casting doubt on their willingness to provide more dollars for a new federal initiative.

And the larger, on-going struggle between those who wish to cut government spending in the name of austerity and those who favour Keynesian expansion seems to be resolving itself in favour of the budget-cutters.

So, even in the face of the overwhelming evidence that early childhood education has economic benefits that go beyond the moral claims of social and intergenerational justice, the future of the US initiative is uncertain. Absent new will to act from both sides of the US political divide, the prospects for the United States improving its dismal rating on intergenerational justice seem bleak.

Links
Find out more on OECD work on Early Childhood Education and Care
Education at a Glance 2012
Starting Strong; Starting Strong II; Starting Strong III
Doing Better for Families
Photo credit: Bulb idea with human hand / Shutterstock

The “urban advantage” in education

by Marilyn Achiron
Editor, Directorate for Education and Skills

Nearly half the world’s population now lives in urban areas. What does that mean for education? Results from PISA indicate that that could be good news for students who go to school in those areas. As the latest edition of PISA in Focus points out, an “urban advantage” in student performance is evident in nearly every country and economy that participated in the PISA 2009 assessment. 

PISA has shown that while large cities can be a challenge to educators, they are mostly a boon, particularly when all students can take advantage of the wealth of cultural and social opportunities that big cities offer. PISA results also show that schools in urban areas differ from schools in less-populated areas – in ways that are usually associated with better student performance.

On average across OECD countries, students who attend schools in cities of more than 100 000 people perform better in PISA than students who attend schools in villages, rural areas, or towns with up to 100 000 inhabitants. This difference in performance translates to about 20 PISA score points – the equivalent of half-a-year of schooling. In many countries and economies, the performance difference between the two groups of students reflects families’ decisions about housing and employment, which, in turn, influence how students’ socio-economic status is distributed geographically.

In all countries and economies except for Austria, Belgium, Germany, Israel, Korea, the Netherlands, the United Kingdom and the United States, students who attend schools in urban settings come from more advantaged socio-economic backgrounds. In Denmark, on the other hand, students whose parents have high levels of education and high-status occupations are more likely to attend schools in rural locations or in towns of up to 100 000 people. 

But the socio-economic status of students is only one of the factors that is associated with the better performance among students who attend school in cities. These schools have certain characteristics that PISA shows are positively related to performance. Urban schools are usually larger, enjoy greater responsibility for resource allocation, are less likely to experience staff shortages, are more likely to have a higher proportion of qualified teachers, and have higher student-teacher ratios than schools in rural areas and towns, especially in partner countries and economies.

An analysis of questionnaires distributed among students participating in PISA 2009 also finds that in Australia, Dubai (UAE), Estonia, Iceland, Israel, Montenegro, New Zealand, Qatar and Sweden, students who attend schools in urban areas tend to enjoy a better disciplinary climate in their classes than students who attend schools in less-populated areas (in Brazil, Mexico, Poland, the Slovak Republic, Slovenia and Tunisia, the opposite is true). In 15 countries, students who attend schools in urban settings are more likely to be able to choose from among a greater number and wider range of extracurricular activities.

What this tells us is that some of the conventional wisdom about big city schools may be a little off. Given the heterogeneity of the student population, large schools might actually offer students more, not less, stimulation and inspiration; and with more autonomy in allocating resources, urban schools may be better able to meet the needs of all their students.

Links:
For more information on PISA: www.oecd.org/pisa/
PISA in Focus No. 28: What makes urban schools different?

Photo credit: Urban Globe/ Shutterstock

2much 2handle? Schools, social networks, and cyber bullying

by Tracey Burns
Analyst and Project Leader,  Innovation and Measuring Progress Division, Directorate for Education and Skills

“I’m really worried but I don’t know how to react” my friend told me over coffee the other day. Her daughter, 11, had told her that she was being bullied online, but would not say by whom.

“What can I do? And how do I know if it’s serious or not?”

A just released OECD publication looks at how rapid technological development has changed the way we interact with each other and our communities. Despite the enormous potential of the Internet to reshape our world, there is a downside to infinite connectivity. Internet fraud, privacy concerns and identity theft are all part of the online world. For parents and children, worries about cyber bullying and protecting children from explicit content and online predators are crucial.

Cyber bullying occurs when a child, preteen or teen is threatened, harassed, or embarrassed by another young person using the Internet. A number of high–profile tragedies, for example teens who committed suicide as a result of cyber bullying, have brought this topic to the top of policy, education, and parental agendas. However the extent of cyber bullying is hard to estimate, varying from more than 10% of surveyed internet users aged 9 16 years in Australia, Estonia, Denmark, Sweden and the Russian Federation to between 2- 3%, in Italy, Portugal and Turkey. While cyber bullying is worrisome, bullying offline is still reported to be more common.

Interestingly, the bully and victim roles are often interchangeable and related: those who admitted bullying others were more likely to report being bullied themselves, both online and offline. Guides to protecting Internet users make it clear that the best preventive strategies involve awareness, constant vigilance, and keeping an open dialogue about children’s concerns and online lives. For education, this poses a series of tough questions. What responsibilities do educators have in monitoring student’s time online during school hours? How can different parental standards of safety be accommodated?

The advent of cyber bullying is just one example of technological changes sweeping OECD countries. Trends Shaping Education 2013 looks at 14 of these trends and their possible impact on education, including:

• Social networking: Founded in 2004, Facebook had over 1 billion active users by September 2012. Should schools see social network sites as an opportunity to extend the learning process/experience beyond the classroom?
• Increasing diversity of local content: Since the mid 2000s the diversity of languages on the Internet has increased dramatically. There are now over 250 languages online, with English, Chinese, Japanese, Portuguese, and Spanish comprising the top five. Does local diversity of Internet content lead to better or worse quality of information available for students?
• The evolution of the Internet: In January 2009, there were 15 000 downloadable applications, or “apps” available. By September 2012, this figure had grown to over 1.5 million. Is there a market for educational apps to improve learning in the classroom and extend it beyond?

The transformation of the Internet is felt throughout the entire world, including the poorest regions. Trends Shaping Education 2013 provides a powerful snapshot of these trends and links these data to the evolution of our classrooms and schools. How can educators develop their students’ critical capacity to use and contribute to the wealth of information available at the click of a button? What kind of quality control should we expect from e-learning? How can teachers make the best use of ICTs for teaching and learning?

These are just some of the questions we must ask ourselves when planning for the medium and long term of technology in our education systems. Our world is changing. The question is: are our schools evolving too?

Links:
Trends Shaping Education 2013

This is the second of a series of blogs issued for the release of Trends Shaping Education 2013. You can find the first one here:
The weight of nations: the shape of things to come?

Photo credit: Cyber bullying concept/ Shutterstock.com

The weight of nations: the shape of things to come?

by Tracey Burns
Analyst and Project Leader, Innovation and Measuring Progress Division, Directorate for Education and Skills

At lunchtime, Marco can be found in the bathroom stall of his secondary school. He is not ill. Rather, he is eating his lunch away from the eyes of his peers, sensitive to his weight problem and hoping to avoid being teased and targeted by bullies. Like many obese children, he struggles with poor self-esteem, anxiety, and depression.

Growing affluence has had positive influences on the health of OECD citizens. Less premature death and infant mortality, and longer and healthier lives have all been associated with our increased economic well being. But, does affluence lead to indulgence? A just released OECD publication shows that obesity among adults and children threatens to grow into a severe public health crisis.

Across all countries, the average   Body Mass Index  (BMI) increased between 1980 and 2008. This trend is universal, and it is swift. In 1980, just under half of countries had an average BMI classified as “overweight”. By 2008, this figure had grown to 87% of countries, with Mexico and the United States at the top of the list. Only China, India, Indonesia, Japan, and Korea still fall within the “normal” range, but their averages are also on the rise. Given the speed and uniformity of the trend, it is not an exaggeration to label it an epidemic for OECD (and increasingly BRIC) countries.

What does this mean for education? Schools can teach reading and writing, but combatting obesity requires learning about healthy behaviours and tools for managing one’s body, including non cognitive skills such as impulse control. Reducing junk food in school cafeterias is a start, but challenging negative assumptions and stereotypes that can shape teacher and student expectations is crucial. On a practical level, even simple details like the size of desks, chairs, and yes, washrooms, will need to be rethought.

Rising obesity is just one example of profound changes sweeping OECD countries, trends that are shaping the way we live and the future of education. Trends Shaping Education 2013 looks at 70 of these, including:

• Aging populations and the need for lifelong learning to develop and reinforce skills across the lifespan;
• An increasing divide between the rich and the middle class and the role of education in reducing (or reinforcing) inequity;
• The growing number of single-person households and the role of schools in building a sense of community and combating alienation in urban environments;
• A decline in voter turnout and the role of schools and universities in fostering civic literacy.

It is astonishing just how universal these trends are. In 100 pages this book provides a powerful snapshot of globalisation at work and links this data to the evolution of our classrooms and schools. It captures the transformation of our societies, and asks hard questions about how these trends will affect our education systems and what they mean for teaching and learning.

What role can education and schools play in improving civic participation and well-being in our modern societies? What does it mean for education that our societies are becoming more diverse? How might schools continue to foster a greater sense of community for their students and families in urban environments? These are just some of the questions we must ask ourselves when planning the future of our education systems. Policy makers, school leaders, teacher educators, and teachers can and should take an active role in this critical reflection, as well as parents and students. Behind every graph in Trends Shaping Education 2013 there is a Marco (or Maria, or Stan) hidden from sight in school, waiting for the weekend to come.

Links:
Trends Shaping Education 2013
Obesity and the Economics of Prevention: Fit not Fat
Education and Social progress

Photo credit: Obesity in Children / Shutterstock.com

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

Older, wiser, better: ageing workforce and fast-track societies

by Julie Harris,
Consultant, Directorate for Education

Simple fact: older workers are leaving the labour force earlier than they did in the 60s and 70s. The retirement age declined steadily across OECD countries from the 1970s to the early 2000s. Over the past decade this drop has levelled off, with some countries experiencing a slight upturn. Despite this, apart from Japan and Korea, it is still significantly lower than in the 1960s and 1970s.

At the same time retirement age has been declining, life expectancy has been increasing. In many OECD countries, workers who retire can expect to live another two decades.

If this situation does not change, there will be twice the number of retirees per worker in OECD countries by 2050. You don't need to be an economist to understand that such an eventuality would pose a serious threat to living standards and tear deeply into the fabric of the social safety net.

So, what to do? How can governments move to remedy this situation? And what can companies do to better take advantage of senior employees' skills?

The OECD Skills Strategy states that both governments and companies should work to discourage early retirement. To keep older workers in the labour market, many countries have eliminated early retirement schemes, increased the official pensionable age and corrected distorted financial incentives to retire early. To tackle demand-side barriers to employing older workers, some countries have tried to balance labour costs with productivity by reducing employers’ social security contributions or providing wage subsidies for older workers. Lifelong learning and targeted training, especially in mid-career, can improve employability in later life as well and discourage early withdrawal from the labour market. A rise in the pensionable age also lengthens the period of time over which employers could recover training costs; hence, an attractive incentive to motivate more employers and older employees to invest in training.

Anne-Sophie Parent, Secretary General of AGE Platform Europe, an NGO that promotes the interests of people over 50 across Europe, is convinced that scrapping the mandatory retirement age is key to increasing the employability of older workers. This fixed age, she explains, is like the expiry date on a pot of yoghurt: the closer it gets, the more you're inclined to think of it as no good.

According to the OECD, employees between 25 and 54 are twice as likely to take part in job training as those over 55, confirming employers’ unwillingness to invest in senior staff. Removing the mandatory age would help make employers see older employees as valuable, she argues, giving them an incentive to invest in their skills through training.

Participation in job-related training over the last month, by age group, 2009
(As a percentage of the employed in the age group)

If doing away with the mandatory age is crucial, governments must also address certain significant workplace problems to help older workers get a foothold in the job market. Rodolphe Delacroix, Senior Consultant at consulting firm Towers Watson, cites the case of Finland, which pushed back the average retirement age three years by tackling work-related stress, strenuousness of work and work-life balance.

Delacroix adds that governments can use social and fiscal incentives to entice companies to hire people over 50 and set up progressive retirement plans that allow older employees to reduce their working hours over a number of years. These could replace early retirement plans, which have been the norm in countries such as France.

Companies, for their part, must make career planning an integral part of their human resources policy early on, he maintains. They need to manage the end of employees' careers well to ensure that knowledge and skills are passed on to younger employees.

Older workers are perfectly positioned to help countries maximise the use of skills, as outlined in the OECD Skills Strategy. They can develop relevant skills of younger workers, supply their skills to the labour market and put them to effective use. Indeed, it is hard to imagine how they can't be a boon to our crisis-ridden economies.

Links:
OECD Employment Outlook
Ageing and Employment Policies
Ageing and Skills: A Review and Analysis of Skill Gain and Skill Loss Over the Lifespan and Over Time
Data visualisation: Labour force participation by gender and age, 2010
Live Longer, Work Longer: Statistics on average effective age of retirement
Learn more about ageing societies on: http://www.skills.oecd.org
Photo credit: Young and old businessman / Shutterstock
Chart source:  Calculations based on the EU-LFS.

Higher education: a good long-term investment?

by J.D. LaRock

Senior Analyst, Innovation and Measuring Progress Division, Directorate for Education

As any student can attest, pursuing a higher education requires an investment in time, effort – and in a number of OECD countries, significant financial resources.  But the economic costs of higher education go beyond tuition fees.  Because people with higher education tend to have higher earnings, they’re likely to pay more in income taxes and social welfare contributions.  There’s also the “opportunity cost” of foregone earnings when people enter university instead of the labour market.

Given these long-term economic costs, do the long-term economic benefits of having a higher education make it worthwhile?  As the latest issue of the OECD’s brief series Education Indicators in Focus details, analyses based on the most recent year of available data – 2007 for most countries – suggest that the return on investment is very good.

For example, the long-term economic advantage of having a tertiary degree instead of an upper secondary degree, minus the associated costs, is over USD 175 000 for a man and just over USD 110 000 for a woman, on average across OECD countries. The payoff is particularly strong for men in Italy, Korea, Portugal and the United States, where obtaining a higher education degree generates a long-term benefit of more than  USD 300 000 for the average man, compared to a man with an upper secondary education only.

Meanwhile, the advantage for women is strongest in Ireland, Korea, Portugal, Slovenia, the United Kingdom, and the United States, where having a tertiary education yields an average long-term benefit of USD 150 000 or more, compared to a woman with an upper secondary education.

As the chart above shows, OECD analyses also find that the long-term payoff on the amount of taxpayer funds used to support people in higher education generates a strong return.  Taxpayer costs include funds used to lower the direct costs of higher education to individuals, as well as support for grant and loan programs.  They also include indirect costs, such as foregone tax revenues and social contributions to the government while people are in university.

On average, OECD countries directly invest more than USD 30 000 in public sector funds to support an individual pursuing higher education.  However, they’ll recoup this investment – and then some – through greater tax revenues from these higher-educated people, as well as savings from the lower level of social transfers these people typically receive.

On average, OECD countries will receive a net return of USD 91 000 on the public costs to support a man in tertiary education – more than three times the amount of the public investment. In Belgium, Germany, Hungary, Slovenia and the United States, this return is especially high, topping USD 150 000.  The net return on the public costs to support a woman in higher education is somewhat lower – USD 55 000, on average – but are still positive in almost every OECD country.

Of course, the fallout from the global economic crisis will likely change this cost-benefit equation – but whether it will make it better or worse overall is unclear. For example, the higher unemployment rates spurred by the crisis are likely to have reduced the opportunity cost of foregoing work in order to attend university.  However, they also may have reduced some of the benefits of having a higher education, because unemployment rates rose among tertiary-educated people during the crisis.

Likewise, the continued global expansion of higher education could have different effects.  As the supply of highly-educated individuals grows, the relative economic benefits of having a tertiary education may go down over time.  However, if economies continue to become more knowledge-based – increasing the demand for highly-educated people even more – the economic benefits of higher education could continue to expand.

For more information

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
See also: IMHE General Conference 2012 "Attaining and Sustaining Mass Higher Education", Paris, 17-19 September 2012


Chart Source: Education at a Glance 2011: OECD Indicators, Indicator A9 (www.oecd.org/edu/eag2011).
Note: Data for Australia, Belgium and Turkey refer to 2005. Data for Italy, the Netherlands, Poland,
Portugal and the United Kingdom refer to 2006. All other data refer to 2007.
Countries are ranked in descending order of the net present value.

Better skills and better policies lead to better lives for women

by Michelle Bachelet
United Nations Under-Secretary-General and Executive Director of UN Women

The global economic crisis, with high levels of unemployment, especially among youth, and rising inequality, with large wage gaps between high- and low-skilled workers, has added urgency to the need for better skills. This is especially important for women, who already face barriers to participating fully in the economy. Investing in their skills from early childhood, through compulsory education, and throughout their working life can transform women’s lives and drive economies. Equally important are better policies to promote equal rights and opportunities and women’s full participation in public life.

Investment in skills is particularly important during these tough economic times.  Skilled workers play a crucial role in generating future jobs and economic growth. Women’s entry into the labour market has been an important driver of European economic growth in the past decade. Research finds that closing the female-male employment gap would have positive economic implications for developed economies, boosting US GDP by as much as 9% and euro area GDP by as much as 13%. A 2011 report by the International Labor Organization and the Asia Development Bank revealed that a gender equality gap in employment rates for women cost Asia USD 47 billion annually – 45% of women remained outside the workplace compared to 19% of men.

It is time to remove the barriers to women’s full participation in the economy. The OECD has found that the main reason 25-39-year-old women cite for choosing to work part-time is their care responsibilities. The same reason is given when inactive women are asked why they don’t participate in the labour market at all.  Globally, women are still responsible for 60% to 80% of household chores and childcare. Worldwide, women account for 58% of unpaid work.

Although 552 million women joined the global labor force between 1980 and 2008, and research shows that reducing the gender employment gap improves economic growth, millions of women remain marginalised from the formal economy. In Egypt, Jordan, Libya, Morocco and Tunisia, only about one-quarter of adult women were in the labour force in 2010, compared with 70% to 80% participation rates among adult men.

An agenda for equality is needed that includes better skills and better policies so that women can exercise their economic, social, cultural and civil rights and economies can be healthier and more inclusive. Policies are urgently needed to help women and men reconcile work and family responsibilities, through the provision of childcare and maternity and paternity leave, and flexible working hours. Tax and pension systems also need to be revisited and revised to encourage equality.

When it comes to promoting women’s economic empowerment, we are not starting from scratch. There are many important initiatives taking place in all regions, including in low- and middle-income countries, to ensure economic justice and security for women. These include flexible childcare that enables women to participate in the labour force, fair pensions to ensure that older women do not live in poverty, cash transfers to enable families to send their girls to school, and training that gives women skills in entrepreneurship and new technologies. Our challenge is to make the equality agenda universal. In 2013, UN Women will use our flagship report, Progress of the World’s Women, to present evidence on the policies that work, to enable countries to learn from one another and drive the change we want to see.

Links:
UN Women
For the OECD Skills Strategy go to: http://skills.oecd.org
See also OECD work on:

OECD Work on Gender via www.oecd.org/gender

Gender equality and women's empowerment
Early Childhood Education and Care
OECD Forum 2012
Photo credit: Girl with balloons /Shutterstock