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).