Future of Skills in Europe: Convergence or Polarisation?

Ilaria MaselliCEPS

Milano, Fondazione Feltrinelli13 Marzo 2015

In this presentation

• Why not enough graduates from STEM disciplines?

• Is job polarisation happening in Europe?

• What does it mean to be a low-skilled?

• What happens when higher education is extended to the masses?

What can we learn from the universalisation of secondary

educ?• Expansion lower for the leaders (SE,

UK)• Faster for the laggards• As enrollment exceeds 80% =>

demand for educ differentiates• + value of different degrees not the

same (liceo vs. istituto tecnico)

And for tertiary educ? I

• Does it make sense to speak about returns from tertiary education in general when more and more enroll into higher educ?

• Need to take into account the investment (actual + opportunity cost – hours/years)

• Need to differentiate by discipline

What we do practically

• Earnings 5 yrs after graduation – • cost of education, discounted

= actual cost of educ + opportunity cost – hours worked

Results (1): in absolute numbers - F

Educ & Hum/art Social s., business, law

Stem Health & Related Services

-2,000 €

0 €

2,000 €

4,000 €

6,000 €

8,000 €

10,000 €

12,000 €

-547 €

4,728 €

-1,189 €

9,740 €

Educ & Hum/art Social s., business, law

Stem Health & Related Services

0 €

2,000 €

4,000 €

6,000 €

8,000 €

10,000 €

12,000 €

14,000 €

16,000 €

18,000 €

10,277 €

16,708 €

4,022 €

10,965 €

Italy

Slovenia

Source: Authors’ elaboration

Results (2): in absolute numbers - M

Educ & Hum/art Social s., business, law

Stem Health & Related Services

-15,000 €

-10,000 €

-5,000 €

0 €

5,000 €

10,000 €

15,000 €

20,000 €

-9,981 €

10,146 €

2,025 €

14,786 €

Educ & Hum/art Social s., business, law

Stem Health & Related Services

5,000 €

7,000 €

9,000 €

11,000 €

13,000 €

15,000 €

17,000 €

19,000 €

7,920 €

19,307 €

15,414 €14,458 €

Italy

Slovenia

Source: Authors’ elaboration

Costs and Benefits Compared

Source: Authors’ elaboration

And for tertiary educ? I I• Cost of education matters: via hours

studied, hours worked, length of studies

• STEM case in FR and IT • and for women in general• Worth studying social science and

medicine!

And for tertiary educ? II

• So….what to Study …Matters! Signaling power Within inequality – like with expansion of

secondary education

• A rational decision? Go to STEM only if wealthier and

smarter (or both) Policy-makers can play with incentives

…yet

• No need to worry of high-skilled unempl

2003 2013 202360

65

70

75

80

85

67.0

70.072.5

75.1

78.180.1

Activity Rates in 2023 - No Policy Scenario

Act

ivit

y r

ate

s

10 15 20 25 30 35 40 4550

55

60

65

70

75

80

85

2007 2013

Employment rate

Share

of

ISC

ED

5-8

• Eventually over-education BUT..

On the demand side

What job polarisation looks like in the EU

Why is that?

• Technology

• Globalisation

• Feminisation of the LM

What does it mean to be a low-skilled?

• Workers can BE low skilled (Isced 0-2)

• But also BECOME– Technological change– Job polasization– Long-term unemployment–Migration

Convergence or polarization?

• Net effect not clear–Convergence between groups (less low-skilled, more high-skilled)–Polarisation within groups (ex. graduates)

Challenges for policy-making I

• What will the future look like?• “I never make predictions, especially about the future” Sam

Goldwyn

=> challenge for policy-making = build resilient labour market– Early childhood education?

Challenges for policy-making II

• Il mistero italiano: migliori fattori di produzione e crescita 0 !!!???

4 4.5 5 5.5 6 6.5 7 7.5 8 8.5400

420

440

460

480

500

520

540

560

580

Reading_M Math_M Reading_F Math_F

Expenditure on Education, % of GDP, 2011

PIS

A S

core

20

12

• Quality and quantity of education– Weak

relationship between expenditure and PIIAC results!

Domanda

• 3 riforme attualmente in discussione – Jobs act– Istruzione– Pubblico impiego

• Come si configurano rispetto a questi trend?