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OECD Skills StrategyTranslating better skills into better economic and social outcomes

Israel Accession Seminar

22-23 November 2011

Deborah Roseveare

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Skills matter

for individuals because skills have an increasing impact on labour market

outcomes and social participation

for economies because failure to ensure a good skills match has:

short- term consequences (skills shortages) longer-term effects on:

economic growth equality of opportunities

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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 we know what skills matter and drive outcomes the right mix of skills is being taught and learned in

effective, equitable and efficient ways labour markets and societies fully utilise skills 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

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The world has changed A dramatic expansion in higher education

Younger cohorts are more highly educated

Geographical distribution has shifted towards China

Age group Tertiary qualified

aged 25-34 years 81 million

aged 55-64 years 39 million

% 25-34 years 55-64 years

United States 35.8 20.5

Japan 12.4 10.9

China 6.9 18.3

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

Integrates work on skills across the Organisation

Supports countries in developing better skills policies for economic growth and social inclusion

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

Contextual factors

Economic level & structure TechnologyDemographics Work organisationMaternal & child health Institutional settings

Skill supply

Educational attainmentLevel of cognitive skillsMigration & participation Matching

Education mismatchSkills & informal workHard-to-fill vacancies

Skill gaps

Outcomes

Growth & productivityLabour force statusEarningsIncome inequality & health

Skill demand

Employment by educationEmployment by occupationJob-task measures of skill

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Developing and maintaining stock of skills

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Producing an appropriate mix of skills

What are the drivers of current and future demand of skills/competencies?

Which instruments ensure responsiveness of education provision to labour market demand?

Which competencies should be developed?

How can access to education and training throughout lifetime be optimised?

What is the impact of migration and international labour mobility on skills formation systems?

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Key findings on skills supply and demand

Labour demand characteristics more important than labour supply characteristics in explaining earnings differentials

Skills matter but only if they are required by the job

Extent of text-based processing tasks at work is among the strongest determinants of earnings and skill formation

Skill formation also depends on work tasks and work organisation

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Optimising use of skills

Under-utilisation of skills mismatch between workers’ skills and those demanded

by the job non-participation in the labour market 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)

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Skills shortages can also exist technological shifts demographically-driven demand (e.g. health care) long training pipelines

Economic output lost if: employers can’t hire people with the skills they need employees cannot perform the tasks expected of them

.....and incentives to develop missing skills are weak

→ global competition for talent and to fill shortages

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Low-equilibrium skills outcomes can occur

low supply of skills matching low demand for skills lower incomes lower productivity slower growth

Most often occurs in: rural areas countries where mobility between regions is limited

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Optimising use of skills

Which measures help optimise the utilisation of skills on the job?

How can workforce participation be boosted?

Which tools facilitate the recognition of skills?

How can transparency of skills systems be ensured (role of assessment and qualifications frameworks)?

What information is necessary to facilitate matching of skills (e.g. career guidance)?

Labour-market responsiveness• Education systems are flexible and responsive• Preparing for future labour market needs• Curricula and provision is informed by labour

market needs

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

Open and equitable access• No barriers to participation in education • Easy re-entry and second chance options• Labour market participation (including

marginalised groups)

Leveraging synergies• Co-ordination at all levels of government• Engagement of social partners and education

stakeholders• Co-ordinating policy fields (skills, labour,

family, migration)

Strengthening skills

systems

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Strengthening skills systems

How to achieve a coordinated whole of government approach?

What is the role of different agents including social partners?

Who should pay for what, when and how?

What are good models of policy evaluation to ensure efficiency/continuity of skills policies?

Which is the right level of intervention (regional and local dimension)?

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Local Skills Strategies (‘ecosystems’)

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Thank you!

Ministerial Council Meeting

23-24 May 2012