Transcript Education and the Labor Market in the Western Balkans

Education as an Investment
Competencies, Jobs, and Growth
The
World
Bank
Gordon Betcherman
World Bank
Education as a Strategic Investment Conference
February 14, 2009
Serbia’s employment rate lags well below
successful transition countries and EU targets
80
Lisbon target
70
60
50
40
30
20
10
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The
World
Bank
2
2
Currently, skills are not the major
barrier to growth and jobs…
% of firms that reporting as a significant constraint
Skills/education of workers
Anti-competitive practices
Tax rates
Cost of financing
Macro instability
The
World
Bank
Regulatory uncertainty
0
BEEPS 2005
20
40
60
80
100
3
3
So why worry about skills?
Experience of EU new member states
 Already some evidence of shortages in Serbia
Labor market rewards skills
Education combats social and economic
exclusion
Population aging
The
World
Bank
Interplay of skills and innovation is key to
Lisbon Agenda
4
4
% of firms that reporting as a significant constraint
50%
40%
30%
20%
10%
EU 8
BEEPS 2005
Romania
Bulgaria
Turkey
Serbia
Macedonia
BiH
Croatia
Latvia
Lithuania
Czech
Poland
Estonia
Hungary
The
World
Bank
Slovenia
0%
Slovakia
% of firms reporting S&E as a major constraint
Skills will become a more important barrier
with further development
SEE
5
5
Modern firms demand higher skills
Percentage of workforce with tertiary education
35
30
“Modern” firms
“Traditional” firms
25
20
15
10
5
The
World
Bank
0
EU10+Croatia
SE Europe
Serbia
6
6
Education leads to better labor
market outcomes
Adjusted wage premium relative to basic education
Non-agriculture workers under 35
80
secondary
post secondary
70
wage premium
60
50
40
30
20
The
World
Bank
10
0
Albania
Bosnia
Macedonia
Serbia
7
7
Early investments are the most
critical
The
World
Bank
Source: Heckman and Masterov
8
8
Skills can bring marginalized into
the labor market
Labor market status of Czech Roma
The
World
Bank
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Out of labor force
Unemployed
Employed
Special or less
Primary
Vocational
9
9
The
World
Bank
Tajikistan
33 35
Uzbekistan
Turkmenistan
Turkey
Kyrgyzstan
Azerbaijan
Albania
FYR Macedonia
Kazakhstan
Slovakia
Bosnia & H
Serbia & M
Poland
Slovenia
Czech
Croatia
Armenia
Moldova
Hungary
Estonia
Romania
Lithuania
Russia
Latvia
-18 -17
Belarus
Georgia
Bulgaria
Ukraine
Aging places a premium on education
% Population Change, 2000-2025
42
38
27
18
14
2
-3 -3 -2 -2
-5 -4 -4
-5
-6
-9 -8 -7
-10
-11
-14 -13 -12
-24
10
10
Most workers in EU need to be prepared
to do non-routine tasks
Proportion of all workers reporting to be…:
The
World
Bank
11
11