Transcript Slide 1

Promoting Human Capital: Are
governments effective? The case of
Macedonia
Dr. Nikica Mojsoska Blazevski
University American College-Skopje
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Human capital endowment
“The level of human capital is still low.”
“ The authorities continued to improve both the
physical infrastructure of education and the
regulatory framework …”
“The low level of education and … contribute to a low
general level of productivity” (EC, Progress Report, p.28)
Without well educated workforce Macedonia cannot
become a modern, innovation-driven, export-oriented
economy
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Growth path: neglected human
capital
• Low-skill specialisation, with low-level equilibrium, low
growth, high U, informal work, insufficient technological
change
• Emphasis on school inputs rather than outputs
• Education policy was mainly focused on dealing with
segmented systems of provision, with limited attention
to employability (ETF, 2009)
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Education outputs
• Poor achievements on international assessment
• Low expected years of schooling (12.3)
• High share of early school leavers (1.8 p.p. higher than in
the EU-27, 6 p.p. for females)
• Only 14.3% of 30-34 years-olds with completed tertiary
education (Europe 2020 targets 40%)
• Difficult school-to-work transition
WEF Competitiveness Report
MKD
NMS
Quantity of Education
4.6
5.9
Quality of Education
4.1
4.5
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Education pays-off
• Much higher employment rates and lower
unemployment rate for highly educated persons
• Higher probability of finding a job
• Lower incidence of discouraged workers
• Wage premiums
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Variables
1998
2000
2002
A. Estimated coefficients for dependent variable ln(net monthly
wage)
constant
7.394
8.26
7.772
(90.826)1
(96.839)
(92.262)
age
0.031
0.013
0.024
(8.506)
(3.583)
(6.498)
agesquared
-0.00034
-0.00017
-0.00027
(-7.919)
(-3.960)
(-6.276)
3-year secondary2
0.234
0.171
0.146
(11.234)
(8.194)
(6.938)
4-year secondary
0.367
0.324
0.317
(22.036)
(19.825)
(19.357)
non-tertiary
0.501
0.509
0.427
(18.473)
(20.022)
(15.562)
university
0.808
0.769
0.725
(35.472)
(34.076)
(34.280)
gender
0.151
0.148
0.179
(11.032)
(10.965)
(13.489)
B. Returns to experience, education and other personal
characteristics3
age
3.1%
1.3%
2.4%
agesquared
-0.03%
-0.02%
-0.03%
2
3-year secondary
26.4%
18.6%
15.8%
4-year secondary
44.3%
38.3%
37.3%
non-tertiary
65.0%
66.4%
53.2%
university
124.3%
115.8%
106.4%
Educational reforms
• Recent educational reforms:
- introduction of nine-year primary education,
- compulsory secondary education,
- revised curriculums which promote outcome
oriented and interactive teaching and learning,
- reform of 4-year VET,
- early learning of English language and ICT
skills,
- implementation of Bologna declaration,
- expansion and subsidies to higher education
Improvement of physical capacity at lower education levels and
expansion of provision at university education
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Report: Skills Not Just Diplomas
“Without adequate information on the skills
students acquire and those adults actually
have, policies to address skills gaps operate in
the dark,” Lars Sondergaard, lead author of
the report.
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Vertical mismatch - LFS
2007
2008
E
U
Excess
supply
University
15.5
7.4
-8
14.2
7.8
-6.5
18.6
13.2
-5.4
Higher
4.4
2.1
-2.3
4
2
-2
3.2
2.0
-1.2
4 years secondary 42.1 39.3
-2.7
42.1
39.4
-2.7
41.4
38.2
-3.2
3 years secondary 12.1 15.3
3.2
12.3
13.4
1.1
11.3
11.7
0.4
8.8
22.3
31.5
9.1
20.5
29.6
9.1
0.4
4.3
4.6
0.3
4.3
3.6
-0.7
0.6
0.7
1.5
0.8
0.6
1.8
1.1
Primary and lower
secondary
20.7 29.5
Incomplete
primary
4.2 4.7
Without education 1.1
1.7
E
U
Excess
supply
E
Q2/2011
Excess
U
supply
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Occupational mismatch - ESA
• Planned demand (vacancies) equal to about 1.5% of
current employment (10,060)
• By industry: manufacturing (50%), trade (21.2%),
construction (8%) and 5% in transport and
communications
• Highest demand for secondary educated workers
(62.3%)
• About 10% of total demand for workers with tertiary
education
• Focus on experienced workers, foreign languages, IT,
and soft skills
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Occupational mismatch – ESA (2)
• 10% of firms reported that experienced difficulty in
hiring (experience and soft skills)
• Mainly in manufacturing industry and for secondaryeducated
• Findings are used for designing and implementing
some ALMPs
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Findings - ESA
• Mismatch problem is driven by specific factors at
different educational levels
- at lowest educational level, it is mainly an issue of
low qualifications and lack of specific skills of nonqualified workers;
- at lower and upper secondary education, the
problem is lack of specialization of gymnasium
graduates, and lack of additional skills and working
experience for the rest;
- for highly educated individuals, it is the
occupational choice and surplus of degrees in less
market-oriented sciences
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Skill Demand Survey - WB
About 30 percent of employers claim that hiring a worker with
required skills is difficult
6.3
24.2
37.1
Very easy
Rather easy
Rather
difficult
Very difficult
32.4
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Skill Demand Survey – WB (2)
• Modern and dynamic firms are more seriously
harmed by skill shortages – potential constrain to
growth
• Newly created jobs differ in the skill content from old
destructed jobs: high professional skills, or mediumlevel non-manual skills
• Demand for advanced technical and professional
skills
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Skill Demand Survey – WB (3)
• The aggregate job vacancy rate is 3% (unmet
demand)
• Vacancy duration from 2 weeks (sales worker) to 5
weeks (professional)
Time needed to fill a vacancy
weeks
2009
6
5
4
3
2
1
0
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
Skill Demand Survey – WB (4)
Top 5 most important skills for
employers:
1. Sense of work ethics,
2. Overall literacy,
3. Communication skills,
4. Customer care,
5. Motivation.
Top 5 skills that applicants lack:
1.
2.
3.
4.
5.
Responsibility and reliability,
Motivation and commitment,
Communication skills,
Customer care,
General literacy skills.
Foreign language, ICT, technical /
vocational skills, problem-solving
Unemployment seems more related to work ethics and key
competencies than with technical/vocational and job
specific-skills
Skill Demand Survey – WB (5)
• Lessons for educational policy:
1. Education system and curricula should be made
more responsive to labour market needs –
engage employers
2. More attention should be paid to soft skills –
“beyond the traditional function of the
educational system “
- Soft skills usually acquired outside the school system:
Improve and expand early childhood learning programs,
especially for children from disadvantaged social
background/rural areas.
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011
What do studies show?
• Employers value key competencies and soft skills
• Greater demand for:
- highly educated individuals and those with secondary education,
and
- medium and advanced professional and occupational skills
• Occupations in demand?
- Sectoral skill committees
• Is it effective to invest heavily in higher education?
• The role of institutions
Conference "New Skills for New Jobs",
Sarajevo, 27-28 October, 2011