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