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School-to-work Transitions in a Liberal Economy Alison Wolf King’s College London The Modern Economy • Free Trade • Free Movement in some regions (notably most of the EU), though heavy restrictions in global context • Non-directed labour • Minimal industrial policy • Shift, in developed world, from fast growth in class 1 and 2 occupations to slow growth/steady state • Decline in skilled manual trades – move to the hourglass economy The modern education system • Increased average length: completion of upper secondary normal in all developed countries • Rapid rise in higher education numbers • Delayed specialisation • High returns to formal qualifications, absolutely and relatively • Wide variations in nature and status of apprenticeship. Full-time ‘vocational’ pathways generally common and rarely high-status pre-18 University enrolments at either end of the twentieth century Modern labour markets • European countries and Japan marked by dual labour markets: core of full-time jobs with security and high benefits and periphery of low-security, low-paid, short-term jobs • North America: more fluid labour market, much less job security, high levels of churn, greater movement in numbers of jobs year on year The specific case of the UK • Very low apprenticeship numbers for under18s: apprenticeship almost destroyed in 1980s, very partial return to health in 2000s • Very high levels of regional inequality • General stability in upper secondary academic route and constant reform of upper secondary vocational route • Open access for EU accession state nationals as well as longer-standing EU members Employers’ view of where the formally qualified are to be found: 1950 Graduates Low ability High ability Employers’ view of where the formally qualified are to be found: 2000 Graduates Low ability High ability Employers’ perceptions of the labour market: 2050? Graduates Low quality High quality 16-17 unemployment 40 ILO Unemployment Rate ILO Unemployment as a proportion of age group 35 30 Per cent 25 20 15 10 5 0 1992 1993 Source: ONS 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 16-17 employment 80 Employment rate for those not in Full Time Education Employment rate as a proportion of age group 70 60 Per cent 50 40 30 20 10 0 1992 1993 Source: ONS 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 18-24 year olds Employment rate for those not in FTE Employment rate as a proportion of age group 90 80 70 60 50 % 40 30 20 10 0 1992 1993 source: ONS 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Overall figures conceal huge variations Between and within regions and counties or cities August 2012:16-24 years: % claiming Northumberland 8.4 County Durham 8.2 Caerphilly 10 Derry 13 Sandwell 12.1 Mid Suffolk 4.7 Wiltshire 3.7 South Oxfordshire 2.2 % 16-24 claiming: London area 8.12 Thurrock 6.2 Ashford 5.2 Reigate 3.1 Lewisham 7.5 Brent 6.5 Newham 7.5 Camden 3 Greenwich 6.4 Returns to vocational awards • Poor to specific occupational awards obtained in fulltime training/education • Middling to ‘quasi-vocational’ (eg BTEC) • Good to ‘proper’ apprenticeships: - reflects return to work experience, demonstrated persistence as much as to specific skills – • Change in trade/occupation the rule rather than the exception Apprenticeship numbers 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2005 2006 2007 16 years 2008 17 years 2009 18 years 2010 prov 16-18 Level 3 starts 30 25.4 25 23.5 22.5 23.6 23.3 20 15 14.2 13.7 11.9 11.2 11.2 10 5 0 2005/6 2006/7 2007/8 as % total starts for this age group 2008/9 as % all apprenticeship starts 2009/10 Intermediate apprenticeship starts: proportional change 300 250 200 2009-10 150 2010-11 (to date) 100 50 0 Under 19 19-24 25+ total Advanced apprenticeship starts: proportional change 250 200 150 2009-10 2010-11 to date 100 50 0 Under 19 19-24 25+ 125 The challenge • Improve apprenticeships • Increase value of FT-based vocational • Recognise reality of modern labour market – need to retrain/move between sectors • Address disappearance of youth labour market – can decline be reversed?