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 These include not only weak or stagnant economic growth, but education systems that cling to outdated policies and practices and are divorced from the labour market.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

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.

Everybody into the talent pool

by Marilyn Achiron 
Editor, Directorate for Education

The OECD has just formulated a Skills Strategy to help countries make the most of their peoples’ talents.

How does one even begin to consider an issue as complex as skills? We found that visualising the supply of skills as a talent pool helps. The idea is to create a larger and larger pool of people who have fully developed their skills, encourage those people to supply their skills to the labour market, and then ensure that those skills are used effectively on the job. This new animated video will show you what we mean. 

Links:
To download the report:  Better Skills, Better Jobs, Better Lives: The OECD Skills Strategy   – and much find out more about skills and skills policies around the world – visit our interactive skills web portal: http://skills.oecd.org

Follow the launch of the Skills Strategy and join the debates on @OECD_Edu  #OECDSkills

It all starts with building the right skills

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

Skills transform lives and drive economies. Without the right skills, people are kept on the margins of society, technological progress does not translate into economic growth, and countries can’t compete in today’s economies. But the toxic co-existence of unemployed graduates and employers who say that they cannot find the people with the skills they need, shows that skills don't automatically translate into better economic and social outcomes. The OECD has put together a strategy that helps countries transform skills into better jobs and better lives.

It all starts with building the right skills. Anticipating the evolution of the demand for labour is the essential starting point. We then need to improve the quality of learning outcomes, by putting a premium on skills-oriented learning throughout life instead of qualifications-focused education upfront. That’s about fostering relevant learning. Skills development is far more effective if the world of learning and the world of work are linked. 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 education and smooth the transition to work. Data from our new Adult Skills Survey (PIAAC) provide powerful evidence of that. While you learn when you are in education between the ages of 16 and 25, the learning curve is even steeper if you combine education with work.

All of this is everybody’s business; and we need to deal with the tough question of who should pay for what, when and how, particularly for learning beyond school. Social partners can help in developing curricula that include broader, transferable skills and ensuring that good-quality training is available to all. Employers can do a lot more to create a climate that supports learning, and invest in it. Some individuals can shoulder more of the financial burden. And governments can do a lot to design rigorous standards, provide financial incentives and create a safety net so that all people have access to high quality learning.

But even the best skills simply evaporate if they aren’t maintained and upgraded to meet the changing needs of societies. There are people who are highly skilled who have decided not to work. Why? They may be too busy caring for children or elderly parents; they may have health problems; or they may have calculated that it just doesn’t pay to work. The answer is that we need to make better use of our talent pool.

Equally important, we need to ensure that skills are used effectively at work. OECD data show the link between how skills are used on the job and people’s earnings prospects and productivity. If you have great skills and have a demanding job, you’re fine, and your earnings continue to increase. If you don't yet have the skills but your job is demanding, you’ll see progress too. But if your employer does not use your skills, the earnings over your lifetime tend to deteriorate.

So what can we do about this? Quality career guidance is essential. People who have the latest labour-market information can help steer individuals to the education or training that would best prepare them for their prospective careers. Helping young people to gain a foothold in the labour market is fundamental too. Vocational training is a very effective way to achieve this. Coherent and easy-to-understand qualifications help employers identify potential employees who are suitable for the jobs they offer. And reducing the costs of moving within a country can help employees to find the jobs that match their skills and help employers to find the skills that match their jobs.

There may be young people just starting out who are well educated but have trouble finding jobs that put their education and training to good use. What most people don’t realise is that we can shape the demand for skills. Often we think that the demand for skills is as it is, and we just need to educate people to meet existing demand. That is a big mistake. There is much that governments and employers can to do promote knowledge-intensive industries and jobs that require high-skilled workers. Adding these kinds of high value-added jobs to a labour market helps to get more people working—and for better pay.

Last but not least, education that fosters entrepreneurship can help create jobs. Indeed, education is where entrepreneurship is often born.

In short, we’re all in this together – and there’s a lot more that we all can do to develop the right skills and turn them into better jobs and better lives.

Links:
To download the report:  Better Skills, Better Jobs, Better Lives: The OECD Skills Strategy   – and much find out more about skills and skills policies around the world – visit our interactive skills web portal: http://skills.oecd.org

Follow the launch of the Skills Strategy and join the debates on @OECD_Edu and @SchleicherEdu #OECDSkills

Knowledge and skills are infinite – oil is not

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

As the bible notes, Moses arduously led the Jews for 40 years through the desert – just to bring them to the only country in the Middle East that had no oil. But Moses may have gotten it right, after all. Today, Israel has an innovative economy and its population enjoys a standard of living most of its oil-rich neighbours don't offer. More generally, countries with greater total rents from natural resources tend to be economically and socially less developed, as exports of national resources tend to appreciate the currency, making imports cheap and the development of an industrial base more difficult. And as governments in resource-rich countries are under less pressure to tax their citizens they are more prone to autocratic leadership.

But there is more to this: OECD’s PISA study shows that there is also a significant negative relationship between the money countries extract from national resources and the knowledge and skills of their school population (see figure): Israel is not alone in outperforming its oil-rich neighbors by a large margin when it comes to learning outcomes at school, this is a global pattern that generally across 65 countries that took part in the latest PISA assessment. Exceptions such as Canada, Australia and Norway, that are rich of natural resources but still score well on PISA, have all established deliberate policies of saving these resource rents, and not just consuming them. Today’s learning outcomes at school, in turn, are a powerful predictor for the wealth and social outcomes that countries will reap in the long run.

One interpretation is that in countries with little in the way of natural resources - other examples are Finland, Singapore or Japan - education has strong outcomes and a high status at least in part because the public at large has understood that the country must live by its knowledge and skills and that these depend on the quality of education. So the value that a country places on education seems to depend at least in part on a country’s view of how knowledge and skills fit into the way it makes its living. Placing a high value on education may be an underlying condition for building a world-class education system and a world class economy, and it may be that most countries that have not had to live by their wits in the past will not succeed economically and socially unless their political leaders explain why, though they might not have had to live by their wits in the past, they must do so now.

The most troubling implications of these data relate to the developing world. Many of the countries with below-average GDP succeeded to convert their national resources into physical capital and consumption today, but failed to convert these into the human capital that can generate the economic and social outcomes to sustain their future.

But there is an important message for the industrialised world too. Particularly in these times of economic difficulties, it is tempting to resource our standard of living today through incurring even greater financial liabilities for the future. But in the long term, there is no way to stimulate our way out or to print money our way out. The only sustainable way is to grow our way out, and that requires giving more people the skills to compete, collaborate and connect in ways that drive our economies forward. Without sufficient investment in skills people languish on the margins of society, technological progress does not translate into productivity growth, and countries can no longer compete in an increasingly knowledge-based global economy.

In short, knowledge and skills have become the global currency of 21st century economies. But there is no central bank that prints this currency, you cannot inherit this currency and you cannot produce it through speculation, you can only develop it through sustained effort and investment by people and for people.

Moreover, this new ‘currency’ depreciates as skill requirements of labor-markets evolve and individuals lose the skills they do not use. The toxic coexistence of high unemployment and skill shortages in many countries today illustrates that producing more of the same graduates is not the answer. To succeed with converting knowledge and skills into jobs, growth and social outcomes which nations require, we need to develop a better understanding of those skills that drive strong and sustainable economic and social outcomes; we need to ensure that the right mix of skills is being taught and learned over the lifecycle of people; we need to develop effective labor-markets that use their skill potential; and we need better governance arrangements with sustainable approaches to who should pay for what, when and where. OECD’s new Skills Strategy is now providing a framework to support countries with building, maintaining and using their human capital to boost employment and growth and promote social inclusion.
Links:
Figure: The negative relationship between national resources and skills
OECD Skills Strategy
Presentation: Skills matter: Developing an OECD Skills Strategy
PISA: www.pisa.oecd.org
Follow Andreas Schleicher on twitter @SchleicherEDU
Photo credit: © diez artwork / Shutterstock