What the expansion of higher education means for graduates in the labour market

by Markus Schwabe
Statistician, Directorate for Education and Skills

A university degree has always been considered as key to a good job and higher wages. But as the share of tertiary-educated adults across OECD countries has almost doubled over the last two decades, can the labour market absorb this growing supply of skills? At first glance, the answer isn’t encouraging: the number of unemployed tertiary-educated adults has been increasing across OECD countries for many years. However, a closer look reveals that the unemployment rate for these adults is still much lower than for those without a university degree.

The latest Education Indicators in Focus policy brief analyses long-term trends in employment outcomes of adults based on their highest level of educational attainment. The figure above shows that, in all OECD countries, adults with tertiary education still enjoy higher employment rates than those without by 10 percentage points, on average, and this advantage has changed little over the past two decades.

While this might seem reassuring, in some countries the reality is more troubling. In Korea, for example, labour market demand has not kept pace with an ever-increasing supply of tertiary graduates. As a result, the employment advantage of tertiary-educated adults decreased slightly, by 0.6 point, between 1995 and 2006. In 1995, tertiary-educated adults in Korea were 13% more likely to be employed than those with an upper-secondary or post-secondary non-tertiary education; today they are only 6% more likely to have a job. With 70% of young adults in Korea holding a tertiary degree, some might wonder whether tertiary expansion has reached its limit. But with populations of school-aged children shrinking across OECD countries, the worry about too many university graduates competing for too few high-skilled jobs might prove to be misplaced.

The “knowledge economy” has increased the demand for better-educated and well-skilled workers. But in many countries, even as enrolments in higher education have grown, companies still report that they cannot find workers with the skills they are looking for. While technological progress and globalisation continue to challenge education systems, automation and digitalisation will be, in the words of two Harvard economists*, an ongoing “race between education and technology”. Countries should thus worry less about the share of tertiary-educated adults in the labour force and more about the skills that education provides. Ensuring that the skills students graduate with are relevant to the labour market will go a long way towards making the expansion of higher education sustainable – and beneficial for all.

*Claudia Goldin and Lawrence F. Katz in their book The Race between Education and Technology (2008), Cambridge, MA: Harvard Univ. Press, Belknap.

Links

Education Indicators in Focus No. 57 - Is labour market demand keeping pace with the rising educational attainment of the population?
Education at a Glance 2017 - OECD Indicators

Join our OECD Teacher Community on Edmodo

The fork in the road towards gender equality

by Simon Normandeau
Statistician, Directorate for Education and Skills

Gender biases can be persistent. Too persistent. A simple exercise to illustrate the point: Picture a doctor or a professor. You will most likely think of a man. Now think of nurses and teachers and you are likely to imagine a woman. This unconscious gender bias is rooted in years of associating male and female attributes to specific roles in society. Inevitably, it also influences students’ career choices.

Gender differences in career aspirations are set early on. Children tend to mimic the social environment in which they grew up: boys are more drawn towards male-dominated fields while girls aspire to careers held by inspirational role models of their own gender. By the age of 15, boys and girls have already been regularly exposed to one of the most strongly gender-biased professions: teaching. On average across OECD countries, 83% of primary teachers are women; and this proportion shows no sign of shrinking anytime soon. 

Careers in science show the opposite trend. Data from the Programme for International Student Assessment (PISA) show that even if boys and girls have similar scores in science, girls are less likely than boys to envision themselves in a science-related career when they are 30. This demonstrates that aspirations to pursue a career in science are not necessarily determined by students’ aptitude in these fields.

Data on fields of study released in Education at a Glance 2017 and analysed in a new Education Indicators in Focus confirm that the gender disparities observed in career aspirations in the PISA study are alive and well in tertiary education too. Three out of four students entering the field of education are women; but only one out of four entering the field of engineering, manufacturing and construction is female. Moreover, the share of women entering a programme in engineering, manufacturing and construction is even smaller than the share of 15-year-old girls who aspire to work in science and engineering, showing the effect of social norms over just a few years, and their impact on all-important career decisions. 

From school to university, gender disparities then spill over into the labour market. The figure above shows that the field of study a young woman selects has consequences for her employment after graduation. Women who graduated from health and welfare and education programmes are more likely to be employed than women who graduated from male-dominated programmes, such as engineering, manufacture and construction. But the figure also shows that no matter which field of study they choose, women are always less likely than men to be employed – and the widest gender gaps are found among graduates from science-related fields.

Gender disparities accumulate throughout life. Thus, ensuring equal opportunities to girls and boys to pursue the field of study of their choice, regardless of stereotypes and societal gender imbalances, is a critical step towards more equity in the labour market. Gender diversity in professions also creates value by encouraging a variety of thought and opinion in the workplace. Studies have shown that gender diversity in companies brings higher financial returns, a better reputation and improved internal communication. 

Gender diversity is at the heart of Goal 5 of the Sustainable Development Goals, which aims to achieve gender equality and empower all women and girls by 2030. While some progress has already been made, gender equality is still a target to be reached, and gender bias, whether conscious or unconscious, still a barrier to be dismantled. Education systems have a role to play in promoting and valuing the success of girls in different career paths, to encourage them to pursue their studies in fields that are increasingly valued in the labour market – and currently dominated by men. 

Links 

Education Indicators in Focus No. 55: What are the gender differences and the labour market outcomes across the different fields of study?

The Programme for International Student Assessment (PISA)

Join our OECD Teacher Community on Edmodo

“Youth are not the future; they are the present”

Interview with Oley Dibba-Wadda, Executive Secretary of the Association for the Development of Education in Africa (ADEA) 

by Marilyn Achiron, Editor, Directorate for Education and Skills

Oley Dibba-Wadda is the dynamic (and first female) Executive Secretary of the Association for the Development of Education in Africa (ADEA). The organisation’s mission is to assist in “the transformation of education and training to drive Africa’s accelerated and sustainable development”. We spoke with Dibba-Wadda in June when she participated in the OECD Forum in Paris.

Marilyn Achiron: What do you consider to be the greatest challenge facing African youth today? 

Oley Dibba-Wadda: The challenge that youth are facing, first and foremost, is skills for employability. It is a fundamental issue. What we have realised in education is that going to school has not necessarily translated into quality learning. The learning being taught in schools does not resonate with the current job market. Then there is the issue of financing capital investment for youth who want to go outside of the formal employment system, to go into small and medium enterprises, to go into agriculture, to start their own little businesses.

MA: Do you feel that these challenges are qualitatively different from the challenges facing youth in Europe or America right now?

OD-W: I don’t think they’re qualitatively different. Youth in Europe have better opportunities; but the mindset, the needs, the wants, the thinking, the aspirations are the same. There are better opportunities here [in Europe] than on the African continent, and for me, that’s what the difference is.
All youth are asking for is opportunities, opportunities, opportunities. They know what they want, they know where they want to go, they know how to get there. What they’re challenged with is the financing to do what they want to do, and to have youth champions: adults in influential positions who can be champions to advocate for [them]. Youth want agency: they want to be able to do things the way they want to. We keep saying “they are the future”. They’re not the future; they are the present. We need to acknowledge and appreciate that.

MA: What would be needed to improve the alignment between what students are learning in school and what the labour market demands?

OD-W: First of all, we have to appreciate that the African continent is very diverse. The education system in Francophone West Africa is completely different from the education system in Francophone Central Africa; the education system in Anglophone West Africa is different from that in Anglophone East Africa. We need to contextualise each system of education. What type of education is required? What I was taught when I was going to school was education for a white-collar job: going to school, holding a briefcase, having a suit and tie. That’s what we were trying to instil in our own children, and that’s what [today’s youth] is thinking. What we need is a paradigm shift of mindset to get our kids to look at being self-employed, to start thinking outside of the box, to start learning to do, learning to be more innovative. But also to learn to find jobs that resonate with their interests.

I mentor a lot of youth in Africa, and one thing that comes up is not just the issue of hard skills for employment and employability, but soft, emotional life-skills, such as the ability to speak in public, to express themselves, to read and write basics… to be able to take risks and jump, to express themselves, to feel motivated and inspired. A+ students might not be able to prepare themselves for the world of work because they lack self-esteem, they do not have the confidence to be assertive, to ask questions.

MA: Is that something that can be taught in school?

OD-W: It should be; it has not been done. Our education systems are preparing our youth for examinations; they are not preparing them for work.

MA: As the head of a pan-African organisation, how do you hope to shape each individual country’s approach towards education?

OD-W: Our role is to engage more with policy makers. We do not implement activities, per se; we engage at a higher political level. We engage with the policy makers, ministers, heads of state, the permanent secretaries, administrators within the ministries of education. ADEA also provides capacity-building support to these ministries on best practices. So we say, for example, to a country like Angola: “Rwanda is doing something fantastic. You may want to go there and explore what they’re doing and see how you can adapt that to your context” because the environments are different; you cannot cut-and-paste. We also explore what is happening in other parts of the world. Finland has a very good education system. We engage with the minister in an African country and encourage the minister to go and do a study tour in Finland.

MA: Do you feel that African countries can learn lessons from countries in other parts of the world, and vice versa?

OD-W: They can and they could and they should. But what they shouldn’t be doing is transferring the same model from there and expecting it to work. We have a lot of donor agencies and partners who come in and say “We’re interested in supporting early childhood education; this is something we have done in South America and we want to do it in a particular country in Africa”. And we just take that model and do it because there is money attached to it. So what we have been doing in Africa is following the money, rather than using our own blueprint and saying, “You have this plan, but this is what we feel would be beneficial to us.”

We need to encourage our countries not to follow the money, but to have their own blueprint and then go out and invite [assistance from outside countries]. What we’re trying to think of now at ADEA is how to get countries to take responsibility for education as a global public good….ADEA is trying to engage with all stakeholders, both within the African continent and outside, to set up an African education fund [the African Development Bank is supporting a feasibility study for this fund]. There are so many funds out there that are being used for education in Africa and it’s just not working. So if we have an African education fund that is managed for Africans, by Africans, and [countries] take responsibility for this, then they can invite other stakeholders to contribute money so we can create an education system for Africans that resonates with the current state of the job market…If we continue to have funding coming from the outside, of course: he who pays the piper determines the tune. That’s what we are struggling with now.

Links

OECD Forum 2017

Programme for International Student Assessment (PISA)

Photo credit: @shutterstock 

What does a country average actually mean?

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

The institutional framework of the international community was created in the period following the Second World War. The building blocks for international organisations, including the OECD, were and are the nation-states of the post-World War and post-colonial order. However, nation-states are not fixed entities, but historical constructions. Hence, they take many different forms and change as a consequence of socio-political transformations. Few states correspond to the ideal form of a nation – identified by a common history, language and religion – or state. In a complex and diverse world, national identities change and become less homogeneous. Today, many states are confronted with political pressures originating from regional aspirations for more autonomy. Sometimes such pressures lead to a separation of political entities and the creation of new states, as was the case in the former Yugoslavia, the former Czechoslovakia and the republics of the former Soviet Union. No one can predict the future, but it would be illusory to expect that the current global order will not continue to evolve during the 21st century.

The international statistical system, one of the great achievements of international organisations, has mirrored the evolution of the nation-state. International statistics – and those related to education are no exception – were tuned towards comparing and benchmarking countries against each other. National averages thus became the dominant data. Most of the data points in Education at a Glance, for example, are national averages. However, the expansion and increased sophistication of data collection and data processing have allowed for the development of many more measures than just national averages. Indeed, averages without more detailed measures of how indicators are distributed across various subpopulations offer little added value when it comes to understanding the real world.
Through its “New Approaches to Economic Challenges” initiative, the OECD is working to highlight distributional measures in its statistical apparatus. In Education at a Glance, for example, our analyses increasingly focus on the distribution of education indicators by gender, age, socio-economic status and immigrant background around the national average.

So far, little effort has gone into exploring regional variations within countries. Technical shortfalls, such as the lack of regional data in existing data collections, but also political sensitivities, have hindered the analysis of regional variations. After a few years of hard work, a pilot project under the auspices of the INES Working Party has gathered a range of interesting regional data on some key education indicators. The most recent edition of Education Indicators in Focus (EDIF) explores subnational variations in educational attainment and labour market outcomes.

The chart above shows clearly the relevance of subnational variations. For one of the key measures of a country’s human capital, the tertiary attainment rate in the adult population, the subnational variation in some countries is almost as wide as between-country variations. This is true, obviously, for large countries, such as Canada, the Russian Federation and the United States, but also for Germany, Spain and Sweden. Smaller countries, such as Belgium, Ireland and Slovenia, show less variation, but differences are still significant.

In all countries, the capital region, which attracts a large share of the nation’s human capital for the government and the industries and services concentrated around it, has a larger population of tertiary-educated adults than most other regions. This observation in itself is relevant for education policy: the civil servants and advisors designing those policies often live in environments that bear no resemblance to other parts of the country.

A better understanding of the magnitude of subnational variations in education indicators prompts a range of policy-relevant questions. Huge disparities in human capital between regions call into question the validity of uniform nation-wide education and skills strategies. Regional variation calls for policies that are adapted to the regions’ specific contexts and realities. But nation-states might also have an interest in promoting educational inclusion in the country by taking the steps necessary to help regions at the bottom of the distribution move closer to the average. Significant regional variation might also signal the need for continuing involvement of the central state to ensure that regions have similar capacity and resources to support skills development.

From a statistical point of view, exploring subnational variations raises doubts about the meaningfulness of national averages in international statistics. It is necessary to understand what the country average is and the magnitude of the regional variation around it. After all, an average is just an average, a statistical construct, not a reality.

Links: 

Education Indicators in Focus No. 43 Subnational variations in educational attainment and labour market outcomes, by Markus Schwabe, Rachel Dinkes, Tom Snyder.
Chart source: OECD/NCES (2015), Education at a Glance Subnational Supplement, http://nces.ed.gov/surveys/AnnualReports/oecd/.

Career education that works

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

The benefits of employers engaging with education has long been reported and promoted within policy circles. The UK’s Department for Education, for example, has recently produced guidance for schools stating the need for student learning from the world of work within careers provision. Internationally, the Organisation for Economic Cooperation and Development (OECD) has reported the benefits associated with employer involvement in education. (See, for example: Learning for Jobs).

Despite international interest surrounding the topic, research has failed to keep pace with policy instincts that career education will benefit young people going into the labour market. In a new article, published in the peer-reviewed, international Journal of Education and Work, Elnaz Kashefpakdel and Chris Percy offer new insights into the relationship between career talks with outside people experienced whilst in school and later earnings. They draw upon the limited work that already exists in the area - particularly that of Mann and Percy (2014), which surveyed 1,000 young adults aged 19-24 recalling their school days and found a significant wage premium linked to the degree of exposure young people had with school-mediated employer engagement activities.

This new work analyses data from the British Cohort Study (BCS70), which tracks 17,000 individuals throughout their lives. It provides a rich and reliable set of measurements including socio-economic factors which could potentially affect income, i.e. parental social class, academic ability, home learning environment and demographics. Through statistical analysis, it is possible to take account of such factors in assessing the impact of specific interventions in determining economic outcomes.

The BCS survey offers an interesting data set for analysis related to career interventions due to the timing of its questioning in 1986, when respondents were teenagers. During the 1980s in the UK, government was rolling out the Technical and Vocational Education Initiative (TVEI). The Initiative aimed to help prepare young people for entry into the labour market and served to drive greater activity within schools. The nature of the Initiative often meant that young people were obliged to attend career talks and related sessions, though these activities varied considerably across schools and local authorities.

Data was collected during 1986 regarding young people’s opinions of any careers talks they encountered and was compared to their earnings aged 26, using statistical analysis techniques. Results revealed that, on average, for each career talk with someone from outside of the school experienced at age 14-15 young people benefited from a 0.8% wage premium when they were 26. These findings are statistically significant at 5%, meaning that there is a 95% certainty this correlation did not occur by chance. This relationship was not found for those aged 15-16, which implies that career talks had a greater value for the younger cohort.

Analysis also found a statistically significant relationship between student perceptions of the career talks that they experienced and later earnings. Students who found career talks to be ‘very helpful’ at age 14-15 were compared with those who found careers talks ‘not at all helpful/not very helpful’. Findings demonstrated that for students aged 14-15 who found career talks ‘very helpful’ witnessed a 1.6% increase in earnings per career talk they attended. This also proved significant for young people aged 15-16; with a smaller affect size, they benefited from a 0.9% earnings boost.

These findings provide a clear relationship between the number of career talks attended, and their helpfulness, and relative earnings at age 26. This provides a solid evidence-base for increasing the volume and quality of career talks with outside speakers in education.  Findings revealed that the impact of careers talks were more pronounced for the younger age group, 14-15, than they were for the elder group, 15-16. The authors argue that at the older age group young people may be more focused on examinations, while the younger group may have been more likely to be receptive to career talks due to the year group being more of an explorative period. Thus, perhaps the most desirable age group to deliver career talks to is 14-15 year-olds.

The authors hypothesis that it is difficult to gain new knowledge and skills, known as human capital, through such short duration episodes of engagement with the labour market. However, they could gain access to new, useful and trusted information and networks while interacting with professionals in an episodic manner. It is in this realm of social and cultural capital accumulation that enables young people to gain resources of meaning from the activities, such as career talks. Additionally, the findings are in line with the argument that through the repeated encounters with people from outside schools, young people are able to find helpful information about pathways to their career ambitions.

To read more about the study, visit the website of the Education and Employers Research.
Photo Credit: Careers bulb word cloud, business concept @Shutterstock

Long-term wellbeing of European societies is at stake

By Natália Mazotte
Freelance Journalist, SGI News

Child and youth opportunities

Children and young people are among the biggest losers in the European economic and debt crisis. What do the staggering numbers in youth unemployment and child poverty in Europe mean for the future of this generation – and the continent as a whole?

While Europe continues to struggle to leave the legacy of the financial crisis behind, an entire generation is feeling the effects of the economic fallout most directly. The remarkable increase in youth unemployment since 2008 is perhaps the most disturbing sign of this scenario. In over a dozen European economies, youth unemployment remains today above 20%, and more than one in three unemployed young people have been looking for work for more than a year, according to the Global Employment Trends for Youth.

If you live in Spain or Greece, are between 15 and 24 years of age, and look for work, you are just as likely to be unemployed as to enjoy the privilege of a work contract. The situation does not improve much in other EU countries, where unemployment rates among young people grew from about 15% in 2008, before the crisis, to 22.2% in 2014, affecting 5.3 million young people. 7.5 million Europeans between 15 and 24 are not in employment, education or training. As such, these young people have dropped off the radar of their country’s education, social and labour market systems, as underlined in the OECD 2015 Skills Outlook on Youth, Skills and Employability.

In the crisis-battered southern European countries, life opportunities have declined while the risk of poverty among children and youth has increased since 2007/08, according to the latest EU Social Justice Index of the Bertelsmann Stiftung.

The study contains dramatic numbers, such as 35.8% – more than one third – of children and youth today who are at risk of poverty and social exclusion in Spain. The rate is 31.7% in Portugal. In Greece, it stands at 36.7%, while the share of children living under conditions of severe material deprivation has more than doubled from 9.7% in 2007 to 23.2% in 2014.

Poor labor market and economic deprivation foster mistrust in political institutions

In a study published in 2011, David N. F. Bell and David Blanchflower show that long-term youth inactivity leaves a heritage of reduced lifetime earnings, a large risk of future periods of unemployment and a high likelihood of precarious employment, and it results in poorer health and well-being and lower job satisfaction more than twenty years later.

Additionally, this situation impacts the political scene, where young Europeans appear highly skeptical that those in power are able to address their needs. The shakiness of the labor market and the threat of economic deprivation and social exclusion are all contributing to a growing mistrust of institutionalised politics. Displeasure and frustration are the driving forces behind new forms of political participation, such as Los Indignados, a grassroots protest movement that has grown into the Podemos political party, which won over 20% of the votes in the Spanish general elections last December.

No wonder then that leaders and European institutions consider this one of the most important issues to tackle. In France, where youth unemployment is at a distressing 25.1%, the government recently unveiled new plans, to train young jobseekers and encourage job creation. The same objectives are integrated in the Europe 2020 strategy.

Although the scenario is grim for most EU countries, some of them have managed to go against this trend. Countries such as Germany and the Netherlands remained under 12% youth unemployment in 2015. According to Alain Dehaze, head of the world's largest recruitment company, this is because those countries are better at blending formal education, apprenticeships, work and international experience.

The EU Social Justice Index points out that in Europe as a whole “governments must seek to improve vocational training, reduce the number of early school leavers and improve the transition from the education system to the labor market.“

Poverty is a vicious circle

Whereas young people face hardships transitioning to independence and adulthood in a post-crisis economic context, children are among the biggest losers in countries where the recession has hit hardest.

The most recent Innocenti Report Cards, a UNICEF publication devoted to the living conditions and well-being of children in economically advanced countries, reveals a strong correlation between the extent to which the recession ravaged national economies and the decline in child well-being since 2008.

Some 1.6 million more children were living in severe material deprivation in 2012 (11.1 million) than in 2008 (9.5 million) in 30 European countries. The largest increase in child poverty has been in southern Europe – in Greece, Italy and Spain – as well as in Croatia.

According to the study, children from families who have experienced difficulty remaining in the labor market and satisfying their most basic material and educational needs suffer the stress directly. “Poverty is a self-reinforcing cycle. A child with unemployed parents may do less well at school. Doing less well at school may bring more stress at home. And so on. The longer a child is locked in the cycle, the fewer the possibilities of escape,” the report says.

The EU Social Justice Index does not present a more comforting picture but it highlights some of the ways which can reduce child poverty in Europe: governments should set priorities so that those disadvantaged in society “receive targeted support through a functioning tax and transfer system (e.g., effective child benefit and allowance schemes, housing benefits).” However, “combating poverty is not only a question of monetary support, it also depends on sound policies in other areas, such as education and employment,” the experts warn.

Measures to reverse the deterioration of children’s quality of life are urgently needed to avoid highly disturbing future prospects, not only for this generation, but also for Europe as a whole.

Links:
OECD Skills Outlook 2015: Youth, Skills and Employability
Europe 2020 strategy
EU Social Justice Index
UNICEF Innocenti Report Cards
Global Employment Trends for Youth 2015: Youth employment crisis easing but far from over
Graph source: @ BertelsmannStiftung