Showing posts with label unemployment. Show all posts
Showing posts with label unemployment. Show all posts

Tuesday, 9 September 2014

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

Wednesday, 24 July 2013

A skilful approach to employment

by Barbara Ischinger
Director for Education and Skills

WSC2013_skill32_MI_177July 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

Tuesday, 25 June 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

Wednesday, 2 January 2013

Building the knowledge economy

by Justine Doody
Freelance Journalist and Editor, SGI News
Across the world, countries and citizens are taking steps to build and participate in the growing knowledge economy. As low skilled jobs disappear, replaced with smart systems or outsourced to less developed economies, governments are realising that the best way to ensure economic growth and higher employment is to invest in human capital. This means creating education opportunities for as many people as possible.

The OECD has found that throughout the global economic downturn, education level has been a predictor of job security. Between 2008 and 2010, unemployment in OECD countries rose from 8.8 per cent to 12.5 per cent for people with no upper secondary education, and from 4.9 per cent to 7.8 per cent for people with an upper secondary education. For those with tertiary education, unemployment increased from 3.3 per cent to only 4.7 per cent. Even in a time of economic crisis, OECD countries still needed highly skilled employees.

The Sustainable Governance Indicators (SGI) 2011 study of the Bertelsmann Foundation measured education in OECD countries. The top performing countries were Finland, Canada and New Zealand, while among the lowest were Mexico, Turkey and Slovakia. In Finland, SGI found, between 60 and 70 per cent of each annual cohort enter third level education. Canada has the highest proportion in the OECD of population aged 20 to 64 that has completed post-secondary education. Reforms in New Zealand have led to a sharp increase in tertiary education participation, among majority and minority groups. OECD figures from 2012 also show that New Zealand invests the highest percentage of public expenditure of all OECD countries in tertiary education.

In Mexico, according to SGI, things are improving, but slowly. University education is increasing, but it is still open to only a few; OECD data shows that just 17 per cent of 25 to 64 year olds have achieved a tertiary education. Turkey has serious problems in terms of access to and quality of education, and only 29 per cent of 25 to 64 year olds have a secondary education. Slovakia sees regional differences in access to third level, and has the lowest enrolment rate in third level in the OECD.

Education, health, social inclusion: it’s all connected

Not surprisingly, the top countries in education scored highly in most of the indicators measured by SGI, while the bottom countries scored low on many indicators. One of the indicators with a close correlation to education performance was social inclusion. Finland, Canada and New Zealand ranked highly on this indicator, while Mexico, Turkey and Slovakia were among the countries with the worst levels of poverty, inequality and social exclusion.

Completing more years of education has been linked to economic success, better health outcomes and greater social inclusion. Within the European Union, research shows that 24 per cent of families with a low-educated head are in poverty, compared to 13 per cent of families whose head has a secondary education, and 6 per cent of families whose head has completed third level education.

However, across the OECD, young people from families with limited education are far more likely to leave the education system before attaining a third level qualification. So, low rates of social inclusion and poor education participation feed off each other. Failing to educate people equitably and effectively exacerbates inequality, while failing to improve social inclusion means less advantaged people are less likely to obtain higher levels of education.

Early childhood education is important

Higher education is key to achieving higher income and economic security. But to ensure access to higher education, it is essential to intervene early in the student’s academic career. Children from disadvantaged social groups tend to perform better in schools that include students from different socioeconomic backgrounds. But too often, different social groups are separated, or are not provided with the same opportunities.

In Slovakia, for instance, SGI data shows that the Roma population has particularly low rates of participation in formal education. In Mexico, a private system that exists alongside the public system makes sure that those with higher incomes have access to better quality education. And in Turkey, a lack of social security benefits for parents means that girls from low-income families tend to leave education around the fifth grade. Even in the better performing countries, disparities persist. New Zealand’s Maori and Pacific Islander populations still face difficulties in accessing education, as do Canada’s Aboriginal groups.

Best in class: Finland

Finland has successfully implemented one route to ensuring students stay in education, helping to keep up its rates of students entering third level. It offers special interventions for students who are having difficulties: about 40 per cent of students in Finnish secondary education are given some form of extra attention. Each school has a “special teacher”, who can identify struggling students and provide educational support. As a result, just 1 per cent of Finnish 15-year-olds do not have basic reading skills, as compared to an OECD average of 7 per cent.

Finland is helped in its efforts to ensure equitable education by its homogenous society and healthy economy. Even so, countries with more diverse socioeconomic compositions could still benefit from following its example of early and intensive intervention. As countries work to create competitive advantage by building skilled workforces, making early investments in students could be an excellent investment in countries’ future potential for economic success.
Photo credit: Body of Knowledge sculpture, Frankfurt /Shutterstock

Thursday, 4 October 2012

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).

Thursday, 2 August 2012

Making the right connections

by Barbara Ischinger
Director for Education

It’s becoming clear to me that the crisis in youth unemployment around the world is not just one of the aftershocks of the global economic downturn, but may also have roots in education systems that are not adequately preparing students for 21st-century economies. I took that message to a regional conference on Promoting Youth Employment in North Africa,  held in Tunis in mid-July, where I presented not only the OECD Skills Strategy but also discussed the importance of improving the quality of education and of teachers, and of making quality education accessible to all.

Some 41% of 15-24 year-olds in Tunisia are unemployed – a statistic that is devastating in the present and potentially catastrophic for the future of the country and the region. In more than half of OECD countries, the rate of unemployment among young people approaches or exceeds 20%; and many of the underlying conditions are the same as those found in Tunisia. These include not only weak or stagnant economic growth, but education systems that cling to outdated policies and practices and are divorced from the labour market.

Today, education systems are expected to provide graduates not only with foundation skills and knowledge in given disciplines, but also with the skills needed to adapt to changing employment circumstances and to transfer what they have learned to different environments – what are known as generic skills. To do this effectively, there has to be more co-operation between education systems and industry. Without dialogue, education systems will not know which skills are in demand in the labour market, while prospective employers will not know whether graduates are leaving education with the skills they are looking for. Employers, too, have to be willing to invest in further training for their employees; and policy makers need to provide fiscal incentives to make it attractive for employers to do so.

But equally important, education systems need to adopt more innovative, project-focused teaching methods, particularly in science, to spark students’ curiosity and involvement. I’m encouraged to see this already happening in many places: from France’s La Main à la Pâte programme, developed by the French Academy of Sciences, which aims to reinvigorate a hands-on approach to the teaching of science in elementary schools, to the Agastya International Foundation, which dispatches mobile science labs throughout rural India, to the science education company  founded by Sally Ride, the first American woman in space, who died last month, whose aim is to develop and support young girls’ and boys’ interest in science, math and technology.

There are – and will be – many more of these kinds of initiatives. Their value is not only that they help to make science more meaningful to students, but they can also help to make the important connection between what students learn in school and how that knowledge and those skills can be used effectively in the wider world. And if we can also make more connections between education systems and employers, then we may be able to help more young people fulfil their potential – and help more societies prosper – by creating a better match between young people’s skills and the jobs that propel economies.

Links
OECD Skills Strategy
Related blog posts:
“Creativity” is spelled with a “why”
Understanding youth, unemployment and skills in Africa
Photo credit: Stack of pebbles / Shutterstock

Sunday, 24 June 2012

Understanding youth, unemployment and skills in Africa

by Denielle Sachs
McKinsey Social Sector Office

For those working on employment issues, one thing is clear: the tense imbalance between the demands of the labor market and the supply of appropriately skilled workers is reaching its breaking point. Last week, the McKinsey Global Institute launched, The world at work: jobs and skills for 3.5 billion people. The report found that by 2020 there could be as many as 40 million too few high-skill workers and up to 95 million too many low-skill workers out in the job market.
Avoiding such massive imbalances will require a radical approach to accelerate education and skills building, and to boost job creation for less-skilled workers. Anything less and we will see a growing shortage of high-skill workers, persistent joblessness for many low- and middle-skill workers, rising income inequality, and distressingly high rates of youth unemployment. The numbers are clear: by 2030, the world will have as many as 1 billion workers without even secondary education, and most of them will be living in India, South Asia and Africa.

A lot of institutions are looking at these issues , including OECD and their recently launched Skills Strategy. As part of our ongoing research on youth unemployment and the skills-jobs mismatch, we asked a few experts what a solution might look like for young people in Africa where the under 25 represent three-fifths of sub-Saharan Africa’s unemployed population, and 72 percent of the youth population lives on less than $2 a day.

First, we have to understand who we mean when we talk about the young and out-of-work in Africa. Fred Swaniker, Founder and CEO of the African Leadership Academy, tells us that, on average, she is an 18-year-old girl, living in a rural area, literate but not attending school. To his mind, entrepreneurship – both the technical skills and the mindset — is the answer. It should be an integral part of every child’s education whether that schooling be formal or informal.

 For the Chief Economist for the World Bank’s Africa Region Shantayanan Devarajan, the answer lies in productivity. “The challenge of youth employment in Africa is not just to create more wage and salary jobs but to increase the productivity, and hence earnings, of the majority of young people.” This can only happen by “first, increasing their basic skills, which they can take with them when they move to new enterprises; and second, creating jobs in the formal sector by improving the economy’s competitiveness, so that this sector can absorb more qualified workers into a productive workforce.”

In South Africa, a very specific socio-political context post-apartheid, Thero Setiloane, CEO of the Business Leadership South Africa, explains that access to education and the quality of that education (“Only 35 percent of the children in third grade are able to pass the literacy and numeracy tests.”) are major stumbling blocks. His preference is for a joint government-business solution. “Business must work with government to adapt the school curriculum… so that young people leave school ready for work. Training programs must be tailored to demand…We also need to build in incentives for businesses to address the social-capital deficit in poor communities.”

Moataz Al Alfi, CEO of the Egypt Kuwait Holding Company could not agree more. Coming from the Middle East where the “paradox of the labour markets”, as he calls it, is perhaps at its worst, he calls for “a solution that requires a strong partnership between business, with its urgent need for skilled workers, and government, which is charged with educating young people.” The region currently has the highest youth unemployment rate in the world, at 25 percent. And, on the heels of the Arab Spring, and in the midst of the lingering economic crisis, it is only expected to rise.  He too returns to the issue of a failing education system that does not prepare young people for the jobs that the market desperately needs to fill.

Links:

Join the debate and register for our online panel event on June 26th at 8am EDT //2pm CEST , featuring experts from the OECD and IFC
See also: OECD Skills Strategy
Visit our interactive portal on skills: http://skills.oecd.org
OECD Development Centre
Photo credit: African youth / Shutterstock

Tuesday, 3 April 2012

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

Wednesday, 25 January 2012

Higher education: an insurance policy against global downturns

by J.D. LaRock
Senior Analyst, Innovation and Measuring Progress Division, Directorate for Education
During the first two years of the economic crisis, unemployment
was higher among adults with less education, on average across the OECD zone.
With all the economic turmoil of the past several years, have you ever wished you could buy an insurance policy to protect against the effects of a global recession?  Well, such a insurance policy already exists – and it’s called higher education.  During the first two years of the global economic crisis, in country after country, people with a tertiary (higher) education were much less likely to be unemployed, much more likely to be participating in the labour force, and more likely to have higher earnings, compared to their less-educated counterparts.

These and other findings are discussed in the first issue of the OECD’s new education brief series, Education Indicators in Focus.

As the crisis ramped up in 2008 and continued in 2009, unemployment rates increased across the board in OECD countries. However, the impact was much greater for adults without an upper secondary education. Among this group, unemployment rates rose from an already high 8.7% to 11.5%, and jumped five percentage points or more in Estonia, Ireland, Spain and the United States.  Adults with an upper secondary or equivalent level of education fared somewhat better: among this group, unemployment rates rose from 4.9% to 6.8% between 2008 and 2009 across the OECD zone.  However, in Estonia, Ireland, Spain and Turkey, jobless rates reached 10% or more for this group of people – a mark generally regarded as troublingly high territory for unemployment.

By contrast, people with a tertiary education were the best protected against unemployment during the thick of the global recession. Overall, unemployment rates in OECD countries ticked up just 1.1 percentage points for this group between 2008 and 2009, from 3.3% to 4.4%.  Moreover, 2009 unemployment rates remained at 5% or less for tertiary-educated people in 24 out of 34 OECD countries, and surpassed 8% in only two – Spain and Turkey.

Employment figures tell a similar story: during the crisis year of 2009, people with higher education not only had less trouble finding a job, but also had an easier time keeping the job they had.  Across all OECD countries, 83.6% of adults with a tertiary education were employed in 2009, compared to 74.2% of adults with an upper secondary or equivalent education, and just 56.0% of adults without an upper secondary education.  While a number of factors contribute to the level of adults’ participation in the labour force, higher employment rates for people with more education point to a better match between the skills these individuals possess and the skills the labour market demands, even during periods of economic crisis.

What’s more, the sizeable earnings premium that university-educated people typically enjoy in the labour market held strong during the crisis years of 2008 and 2009.  In 2008, among 14 OECD countries with comparable data, the typical employee with higher education earned 56% more than the typical employee with an upper secondary or equivalent education.  Even in the face of the economic crisis, this premium increased slightly to 57% in 2009. By contrast, the typical employee without an upper secondary education earned 23% less than a corresponding worker with an upper secondary education in 2008 – and this earnings penalty remained the same in 2009.

Having a higher education isn’t fail-safe protection from the consequences of a global economic downturn.  But like any good insurance policy, it can help people recover when bad things happen to them.  And with the economic outlook for 2012 looking as uncertain as it does, that’s no small comfort.

For more information
Education Indicators in Focus
Education at a Glance 2011: OECD Indicators www.oecd.org/edu/eag2011
OECD’s Indicators of Education Systems (INES) programme (Brochure PDF 2.3 KB)

Chart source: Education at a Glance 2011: OECD Indicators, Indicator A7.

Wednesday, 14 December 2011

Education does not equal skills

by Julie Harris
Consultant, OECD Department of Education

Mapping skills at the European Youth Forum
I went back 25 years in time yesterday, as I sat with participants at the European Youth Forum, all young, vibrant, educated and driven. I felt as if I were at university with my daughter and 100 of her friends. We discussed the future, skills, and in particular, the skills mismatch, described by Andreas Schleicher as “a lot of unemployed graduates plus a lot of employers looking for skilled workers”.

At the eve of my own career 25 years ago, my current profession did not exist. The Internet did not exist. There were fewer graduates and fewer employers looking for skilled employees. Did we worry about getting jobs? Probably, but back then a degree was the passkey.

Today, as my daughter graduates from college in 2013, the debate for her as well as for the 120 participants we worked with today, centred around jobs, skills and education. Just what is the link? Does a degree guarantee a job? Less and less so. Does work experience play a role? Yes, but the youth in my breakout group felt that unpaid internships amounted to exploitation and rarely provided the learning originally intended. What about the “soft” skills that so many students report are not developed in traditional school settings: clear communication skills, emotional intelligence, problem-solving, collaboration, curiosity, critical thinking and technological skills? How do individuals best acquire these skills – which mean more to long-term professional success than purely occupational skills do – and what do we need to do as a society to develop, value and encourage such skill development?

As Andreas Schleicher pointed out in his introduction to yesterday’s session, we need to build strong generic skills (skills that cross contexts, such as reading, writing, problem-solving, communication and collaboration), better utilise talent pools and skill for future jobs.

So how do we go about that?

Some of the ideas participants in the session came up with were:
  1. Link studies to labour market demand. Should governments regulate entry into study programmes, for example when there is a skills surplus and a jobs deficit?
  2. Improve career counselling to students and involve parents. Help students and parents know what the jobs of the future will be, where some of the shortages may lie and what skills will best help them succeed.
  3. Provide internships/work experience opportunities on a parallel track along with university studies (as in the United States and France).
  4. Put more professional, practical skills training into university education. 
  5. Encourage entrepreneurship and innovation among youth: communicate that small-business owners are important actors in society and that there is room for thinking outside the box, across disciplines and beyond borders.
  6. Build skills locally (rather than outsourcing to cheaper providers).
  7. Keep in mind that skills mismatch can begin at school – tracking can lead to rigidity and close down broader skills development. 
In sum, and as one participant put it, skills is a complex issue. It is more than the ability to “do something” and bigger, much bigger than education alone. Education, both formal and informal, at school and in the workplace, gleaned young and old, is a vital piece of the skills puzzle, but education alone does not skills make.

Learn more:
European Youth Forum: Youth Employment: A Call for Change
OECD Skills Strategy
Participate in the 2012 OECD Global Youth Video Competition