1 OECD Skills Strategy Translating better skills into

1 OECD Skills Strategy Translating better skills into better economic and social outcomes Israel Accession Seminar 22 -23 November 2011 Deborah Roseveare 1

Skills matter for individuals q because skills have an increasing impact on labour market outcomes and social participation for economies q because failure to ensure a good skills match has: § short- term consequences (skills shortages) § longer-term effects on: § economic growth § equality of opportunities 2

Better skills do not automatically translate into higher incomes and higher productivity Success with converting skills into jobs, growth and social outcomes depends on whether q we know what skills matter and drive outcomes q the right mix of skills is being taught and learned in effective, equitable and efficient ways q labour markets and societies fully utilise skills q governments build effective skills systems and strong coalitions with the social partners to find sustainable approaches to who should pay for what, when and where 3

The world has changed q A dramatic expansion in higher education q Younger cohorts are more highly educated Age group Tertiary qualified aged 25 -34 years 81 million aged 55 -64 years 39 million q Geographical distribution has shifted towards China % 25 -34 years 55 -64 years United States 35. 8 20. 5 Japan 12. 4 10. 9 China 6. 9 18. 3 4

Many systems have done well in getting more people to higher qualifications But qualifications are not the same as skills. . . …because we continue to learn after obtaining a degree… …and because we lose skills that we do not use

OECD Skills Strategy q Integrates work on skills across the Organisation q Supports countries in developing better skills policies for economic growth and social inclusion q Defines three key areas of focus: § developing and maintaining the stock of skills § optimising the productive use of a population’s skills § strengthening skills systems

Developing and maintaining stock of skills 8

Producing an appropriate mix of skills Ø What are the drivers of current and future demand of skills/competencies? Ø Which instruments ensure responsiveness of education provision to labour market demand? Ø Which competencies should be developed? Ø How can access to education and training throughout lifetime be optimised? Ø What is the impact of migration and international labour mobility on skills formation systems? 9

Key findings on skills supply and demand q Labour demand characteristics more important than labour supply characteristics in explaining earnings differentials q Skills matter but only if they are required by the job q Extent of text-based processing tasks at work is among the strongest determinants of earnings and skill formation q Skill formation also depends on work tasks and work organisation 10

Optimising use of skills Under-utilisation of skills q mismatch between workers’ skills and those demanded by the job q non-participation in the labour market q inefficient use in informal production Waste of resources invested to develop these skills … …and can lead to skill atrophy The crisis has exacerbated under-utilisation of skills. . . especially for some groups (e. g. youth) 11

Skills shortages can also exist q technological shifts q demographically-driven demand (e. g. health care) q long training pipelines Economic output lost if: q employers can’t hire people with the skills they need q employees cannot perform the tasks expected of them. . . and incentives to develop missing skills are weak → global competition for talent and to fill shortages 12

Low-equilibrium skills outcomes can occur low supply of skills matching low demand for skills q lower incomes q lower productivity q slower growth Most often occurs in: q rural areas q countries where mobility between regions is limited 13

Optimising use of skills Ø Which measures help optimise the utilisation of skills on the job? Ø How can workforce participation be boosted? Ø Which tools facilitate the recognition of skills? Ø How can transparency of skills systems be ensured (role of assessment and qualifications frameworks)? Ø What information is necessary to facilitate matching of skills (e. g. career guidance)? 14

Labour-market responsiveness • Education systems are flexible and responsive • Preparing for future labour market needs • Curricula and provision is informed by labour market needs Leveraging synergies Strengthening skills systems • Co-ordination at all levels of government • Engagement of social partners and education stakeholders • Co-ordinating policy fields (skills, labour, family, migration) Open and equitable access • • • No barriers to participation in education Easy re-entry and second chance options Labour market participation (including marginalised groups) Attention to quality • Setting high performance standards • Quality assurance at all levels of the system • Preparing, attracting and retaining good quality teachers Effective skill use • Good quality career guidance • Transparent skills systems (recognition, assessment, qualification frameworks) • Effective HRM in firms

Strengthening skills systems q How to achieve a coordinated whole of government approach? q What is the role of different agents including social partners? q Who should pay for what, when and how? q What are good models of policy evaluation to ensure efficiency/continuity of skills policies? q Which is the right level of intervention (regional and local dimension)? 16

Local Skills Strategies (‘ecosystems’) 17

Ministerial Council Meeting 23 -24 May 2012 Thank you! 18