Transcript The OECD’s Programme on Institutional Management in Higher

Overview of Higher Education
Trends: Returns and Financing
Highlights from EAG 2014
29 September 2014
Patricia Mangeol
OECD Higher Education Programme
Directorate for Education and Skills
Key Questions on OECD Trends
• Higher education attainment and returns
– What is the relationship between HE and Skills?
– Is higher education still a strong protection against
unemployment?
– What are some of the non-financial returns?
• Financing higher education
– How much do countries spend per student across the OECD and
who pays?
– How have funding models and student aid systems evolved?
• Impact of the crisis and key challenges:
– Impact of crisis on returns and financing
– How to make HE high quality and relevant to the labour market,
while maintaining affordability and expanding access?
2
The Rate of People with HE Still Rises
25-34 and 55-64 year-olds with tertiary education, and percentage-point difference between these groups
Difference between the 25-34 and 55-64 year-old population with tertiary education (right axis)
Proportion of the 25-34 year-old population with tertiary education (left axis)
Percentage
points
Proportion of the 55-64 year-old population with tertiary education (left axis)
%
70
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
-10
Chart A1.3 – EAG2014
Korea
Poland
Japan
Ireland
Luxembourg
France
Spain
Slovenia
Belgium
Portugal
Latvia
United Kingdom
Czech Republic
Netherlands
Hungary
Norway
OECD average
EU 21 Average
Sweden
Greece
Australia
Iceland
Slovak Republic
Canada
New Zealand
Switzerland
Mexico
Denmark
Italy
Turkey
Chile
Finland
Russian Federation
Austria
Estonia
Brazil
Germany
United States
Israel
- 10
3
Educational Upward Mobility in Many
Countries – With Large Variations
Percentage of 25-64 year-old non-students whose educational attainment is higher than
(upward mobility) or lower than (downward mobility)
Russian Federation*
Korea
Finland
Flanders (Belgium)
France
Ireland
Poland
Netherlands
Canada
Estonia
Sweden
Japan
Australia
Average
Spain
England/N. Ireland (UK)
Denmark
Norway
Italy
Slovak Republic
United States
Austria
Germany
Czech Republic
Chart A4.3 – EAG 2014
-
Upward mobility
Downward mobility
4
10
20
30
40
50
60
70
But Mobility Did Not Trickle Down to the
Disadvantaged
Percentage of 20-34 year-olds in tertiary education, by parental attainment (2012)
Parents with tertiary education
Parents with educational attainment below upper secondary education
Parents with upper secondary or post-secondary non-tertiary education as highest level of attainment
%
100
90
80
70
60
50
40
30
20
10
Italy
Spain
Czech Republic
Slovak Republic
Poland
Korea
France
Ireland
Austria
England/N. Ireland (UK)
Average
Finland
Russian Federation*
United States
Australia
Netherlands
Denmark
Germany
Flanders (Belgium)
Chart A4.1 – EAG 2014
Estonia
Sweden
Norway
Canada
Japan
-
5
HE AND SKILLS
6
HE and Skills: A Rocky Relationship
Mean literacy score, by educational attainment (2012)
Below upper secondary education
Upper secondary or post-secondary non-tertiary education
Tertiary education
320
300
280
260
240
220
Russian Federation
Italy
Spain
Estonia
Canada
Korea
Ireland
Denmark
Germany
France
Slovak Republic
Austria
Poland
Average
United States
Norway
Flanders (Belgium)
Czech Republic
England/N. Ireland (UK)
Chart A1.4 – EAG 2014
Australia
Sweden
Finland
Netherlands
Japan
200
7
Proportions of Highly Literate, Tertiary
Educated Adults Vary Across Countries
Percentage of adults scoring at literacy proficiency Level 4/5 in the Survey of Adult Skills, by educational
attainment (2012)
Below upper secondary education
Upper secondary or post-secondary non-tertiary education
Tertiary education
%
40
35
30
25
20
15
10
5
Italy
Spain
Korea
Slovak Republic
Estonia
Denmark
France
Ireland
Germany
Austria
Canada
Poland
Average
Czech Republic
United States
England/N. Ireland
(UK)
Flanders (Belgium)
Norway
Russian Federation
Chart A1.5 – EAG 2014
Australia
Sweden
Netherlands
Finland
Japan
0
8
And Skill Levels Matter for Earnings,
Even Within the Same Education Level
Mean monthly earnings, by educational attainment and literacy proficiency level – Average
Hundreds
Equivalent USD
Level 4 or 5
Average
50
Level 3
Level 2
40
Level 1 or below
30
20
10
0
Below upper
secondary
education
Chart A6.4 – EAG 2014
Upper secondary Tertiary education
or post-secondary
non-tertiary
education
All levels of
education
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RETURNS TO HIGHER
EDUCATION: RECENT
FINDINGS
10
Iceland 18
Norway 25
Switzerland 21
Sweden 25
Germany 30
Netherlands 25
Austria 31
Denmark 25
Latvia 34
Brazil 19
Slovenia 38
Israel 38
Luxembourg 22
Poland 45
Belgium 37
Australia 18
France 29
Finland 29
Chile1 24
United Kingdom 27
New Zealand 16
Czech Republic 43
OECD average 28
Russian Federation 33
Estonia 32
Portugal 19
Canada 25
Mexico 16
United States 27
Slovak Republic 49
Ireland 36
Japan
Hungary 41
Italy 28
Spain 28
Korea 12
Turkey 25
Greece 24
Individuals with HE Have Higher
Employment Rates …
%
Below upper secondary education
Chart A5.1 – EAG 2014
Upper secondary or post-secondary non-tertiary education
Tertiary education
100
90
80
70
60
50
40
30
20
Percentage point
difference in
employment rates
between people
with below upper
secondary and
tertiary
qualifications
11
Chart A6.1 – EAG 2014
New Zealand
Norway
Estonia
Belgium
Denmark
Sweden
Japan
Australia
Korea
Spain
United Kingdom
Netherlands
Switzerland
Men
Italy
Canada
240
Finland
Israel
Portugal
OECD average
Index
Luxembourg
EU 21 average
Germany
Slovak Republic
France
United States
Poland
Austria
Czech Republic
Ireland
Turkey
Slovenia
Greece
Hungary
... And Higher Earnings
Relative earnings, by educational attainment and gender (2012); upper secondary education = 100
Women
Tertiary-type A or advanced research
programmes
220
200
180
160
140
120
100
12
Individuals with HE Have Better Social
Outcomes/ Enjoy Better Quality of Life
Proportion of adults reporting that they believe they
have a say in government
Proportion of adults reporting that they are in good health
100
90
80
70
60
50
Level 1 or below
Level 2
Below upper
Upper
secondary
secondary or
education post-secondary
non-tertiary
education
%
30
Level 3
Tertiary
education
Level 4 or 5
Level 2
Level 3
Level 4 or 5
Level 1 or below
Level 2
Below upper
Upper
secondary
secondary or
education
post-secondary
non-tertiary
education
All
Proportion of adults reporting that they volunteer at
least once a month
Level 1 or below
%
60
50
40
30
20
10
Level 3
Tertiary
education
Level 4 or 5
All
Proportion of adults reporting that they can trust others
%
Level 1 or below
Level 2
Level 3
Level 4 or 5
30
25
25
20
20
15
15
10
10
5
5
Below upper
Upper
secondary
secondary or
education
post-secondary
non-tertiary
education
Chart A8.1 – EAG 2014
Tertiary
education
All
Below upper
Upper
secondary
secondary or
education
post-secondary
non-tertiary
education
Tertiary
education
All
13
Chart A7.1 – EAG 2014
Turkey
Denmark
Spain
Estonia
Sweden
New Zealand
Greece
Korea
Japan
Canada
Slovak Republic
Poland
Norway
Israel
Czech Republic
France
Private net returns
Australia
Finland
OECD average
Portugal
EU21 average
Austria
United Kingdom
Netherlands
Italy
Belgium
Slovenia
Germany
United States
Hungary
Ireland
Equivalent USD
Returns to HE: Is the Investment Worth It?
Man with HE, compared with returns from upp sec or post-sec. non-tertiary
Public net returns
500 000
450 000
400 000
350 000
300 000
250 000
200 000
150 000
100 000
50 000
0
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Returns to HE: What to Keep in Mind
• Net public and private returns increase with the level of
education, both for individuals and the public
• “Net present value”: complex calculation and caution needed
– Social outcomes are not included – hard to measure but important
– No distinction along key aspects like field of study
– Contextual factors have an impact (local employment regulations, tax
systems, etc)
• But useful to have a broad picture and take into account both
the direct and indirect costs and benefits of HE
E.g. foregone earnings, foregone tax revenues for government, but
also lesser social transfers
• The question of a potential “oversupply” of HE educated
people on returns – no clear answer
15
HE FINANCING TRENDS
16
State of HE Funding: Per Student
Expenditures
Annual expenditure per student by educational institutions for all services, tertiary education (2011)
Expenditure per student (equivalent USD
converted using PPPs)
OECD
average
United States
Switzerland
Denmark
Sweden
Norway
Finland
Netherlands
Germany
Japan
Australia
Ireland
Belgium
France
Austria
United…
Spain
Israel
Brazil
New Zealand
Slovenia
Italy
Korea
Poland
Portugal
Czech…
Hungary
EU21 average
Iceland
Chile
Turkey
Slovak…
Mexico
Estonia
Latvia
Indonesia
28 000
26 000
24 000
22 000
20 000
18 000
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
Chart B1.2a– EAG 2014
17
State of HE Funding: Cumulative
Expenditures (Over Duration of Studies)
Cumulative expenditure per student by educational institutions over the average duration of
tertiary studies (2011)
Each segment of the bar represents the
annual expenditure by educational
institutions per student. The number of
segments represents the average
number of years a student remains in
tertiary education.
In equivalent USD
converted using PPPs
120 000
100 000
OECD average
80 000
60 000
40 000
20 000
Chart B1.4– EAG 2014
Turkey
Mexico
Hungary
Slovak Republic
Slovenia
Korea
Estonia
Poland
New Zealand
Israel
Iceland
United Kingdom
Czech Republic
Italy
Belgium
Ireland
Spain
France
EU21 average
Germany
Japan
Austria
United States
Switzerland
Finland
Netherlands
Sweden
Denmark
0
18
Annual Spending Per Student and Rate
of Change Between 2005 and 2011
Annual expenditure per
student (2011, USD)
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
Tertiary education
Tertiary Education
OECD average
000
000
United States
000
000
000 Switzerland
000
Denmark
000
Sweden
000
000
Norway
Finland
000
Netherlands
Germany
000
Slovenia
Japan
Ireland
000
Belgium
000
Austria
France United Kingdom
000
Spain
000
000
Israel
Italy
000
Brazil
Czech Republic
000
New Zealand
Portugal
Korea
Poland
000
Chile
Iceland
Hungary
000
Mexico
Slovak Republic
Russian Federation
000
000
000
-30
-20
-10
0
10
20
30
40
OECD
average
R² = 0.079
Estonia
50
60
70
Change in expenditure per student between 2005 and 2011 (%)
Chart B1.5– EAG 2014
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Chart B3.3 – EAG 2014
Norway
Finland
Denmark
Iceland
Belgium
Sweden
Austria
2008
Slovenia
Germany
Czech Republic
France
Ireland
Estonia
EU21 average
Spain
2011
Slovak Republic
Poland
Netherlands
OECD average
Portugal
Mexico
Italy
Russian Federation
Canada
%
90
Israel
Australia
United States
Japan
United Kingdom
Korea
Chile
State of Financing: Private Expenditures
Represent a Larger Share…
Share of private expenditure on tertiary educational institutions (2000, 2008 and 2011)
2000
80
70
60
50
40
30
20
10
0
20
… But With Large Differences in Recent
Patterns Across Countries
Change (in percentage points) in the proportion of private expenditure between 2000 and 2011
Difference 2000-2008
Difference 2008-2011
Difference 2000-2011
Chart B3.3 – EAG 2014
Norway
Finland
Denmark
Iceland
Belgium
Sweden
Austria
Slovenia
Germany
Czech Republic
France
Ireland
Estonia
EU21 average
Spain
Slovak Republic
Poland
Netherlands
OECD average
Portugal
Mexico
Italy
Russian Federation
Canada
Israel
Australia
United States
Japan
United Kingdom
Korea
Chile
Percentage points
50
45
40
35
30
25
20
15
10
5
0
-5
- 10
21
Fees and Student Aid – Select OECD
Countries
Relationship between:
• average tuition fees charged by public institutions and
• proportion of students who benefit from public institutions and proportion of students who
benefit from public loans and/or scholarships/grants in tertiary-type A education (2011)
For full-time national students, in USD converted using PPPs for GDP, academic year 2010/11
Average tuition fees charged by public institutions, first degrees programmes, in USD
7 500
6 000
Chile4
Japan
3
United States1
United Kingdom
4 500
Australia
New Zealand
3 000
1 500
Switzerland
Italy
Austria
Belgium (Fl.)
Belgium (Fr.) (Fr.)
0
0
Mexico
Chart B5.1– EAG 2014
25
Netherlands
France2
Finland
Denmark
Turkey
Sweden
Norway
50
75
100
% of students who benefit from public loans AND/OR scholarships/grants
22
Financing Models and Access in Select
OECD Countries: What Interactions?
Model 1
Model 2
Tuition fees
No/low
Student
support
systems
Countries
Well-developed
(> 55% of students
receive aid)
Denmark, Finland,
Australia, Canada,
Iceland, Norway, Sweden Netherlands, New
Zealand, United
Kingdom, United States
Above average: 74%
Above average: ranging
from 64% in the UK to
96% in Australia (due in
part to high number of
internat. students)
Entry Rates
in Tertiary
Type A
compared to
OECD
average
(59%)
Recent
changes
Introducing tuition fees
for international students
(Denmark and Sweden,
2011)
Model 3
High
High
(> 1500 USD)
(>4500 USD)
Well-developed (>75% of Less developed
students receive aid)
The Netherlands and the
UK moved from model 4
to model 2 since approx.
1995 and with recent fee
hikes in UK
Chile, Japan, Korea
Below average in Chile
(45%) and Japan (52%),
but significantly above
average in Korea (69%)
Reforms to enhance
student support systems
in Japan and Korea, in
addition to existing fee
reductions/ exemptions
for top students with
financial barriers
Model 4
Low
(<1300 USD)
Less developed
(<40% students receive
aid)
Austria, Belgium, Czech
Republic, France, Italy,
Mexico, Poland, Portugal,
Switzerland, Spain
Below average: 56% (In
Belgium, relatively low
rate counterbalanced by
high entry rate in tertiary
type 5B)
Since 1995, reforms to
increase tuition fees in
public institutions (in
particular in Austria and
Italy)
23
Issues for Ireland
• Ireland is not easy to fit into the four
models: tuition fees were abolished but the
“student charge” represents an increasing
cost to the individual
• Any increase in student charge / tuition
fees should be accompanied by the
development of robust student aid systems
24
RECENT TRENDS AND
IMPACT OF THE CRISIS
25
0
Slovak Republic
Spain
Czech Republic
Greece
Ireland
Latvia
Hungary
Estonia
Poland
EU21 average
Portugal
United States
Slovenia
2005
France
OECD average
Germany
Sweden
Italy
Russian Federation
2012
Belgium
Finland
Canada
United Kingdom
Israel
Denmark
%
Turkey
Switzerland
Austria
Iceland
Netherlands
New Zealand
Luxembourg
Australia
Chile
Norway
Brazil
Mexico
Korea
People Without an Upper Secondary
Education Face A Rising Unemployment Risk
upper secondary
education– below upper secondary education
Unemployment rates 25-64 year-olds, Below
by educational
attainment
2010
50
40
30
20
10
26
%
0
Norway
Korea
Switzerland
Austria
Australia
Mexico
Iceland
Luxembourg
Netherlands
Brazil
Japan
New Zealand
Germany
United Kingdom
Czech Republic
Sweden
Russian…
Denmark
Chile
Canada
Belgium
Finland
Israel
Italy
OECD average
Slovenia
France
Turkey
United States
Poland
EU21 average
Hungary
Estonia
Slovak Republic
Portugal
Ireland
Latvia
Spain
Greece
Those with an Upper Secondary Education
Are Not Immune to Unemployment
Unemployment rates 25-64 year-olds, by educational attainment – upper secondary education or
post-secondary non-tertiary education
2012
2005
2010
50
40
30
20
10
27
%
Norway
Austria
Germany
Czech Republic
Switzerland
Russian Federation
Australia
Korea
Brazil
Iceland
Netherlands
Japan
Luxembourg
Belgium
United Kingdom
Finland
Hungary
Sweden
New Zealand
Israel
Chile
Mexico
United States
Denmark
Poland
Canada
OECD average
France
EU21 average
Slovenia
Slovak Republic
Estonia
Latvia
Italy
Ireland
Turkey
Portugal
Spain
Greece
While People with Tertiary Education Still
Have a Low Risk of Being Unemployed
Unemployment rates 25-64 year-olds, by educational attainment – tertiary education
2012
2005
2010
50
40
30
20
10
0
28
Impact of Crisis on Unemployment
Rates – Cont’d
• HE-educated individuals have lower unemployment
rates throughout the period
• In some countries, including Ireland and Southern
and Eastern Europe, tertiary-educated people have
been hit hard – but UR have increased across all
education levels
• Factors leading to unemployment of HE-educated
people are complex
– Supply side: potential oversupply in some fields, relevance
of degrees to labour market, variations in skill level
– But also demand side: economic restructuring and
destruction of jobs, features of national labour market (e.g.
minimum wage, hiring/firing rules, etc)
29
Evolution of Earnings – Widening Gap
Trends in relative earnings of workers, by educational attainment, in 2005 and 2012
25-64 year-olds with income from employment; upper secondary education = 100
Below Upper Secondary
Table
A6.2a
EAG
2014
Tertiary
2005
2012
2005
2012
Australia
81
83
134
134
Austria
74
70
158
171
Denmark
82
81
125
128
Germany
89
84
159
174
Hungary
78
78
229
208
Israel
79
71
151
152
Korea
68
71
149
147
New Zealand
81
82
125
123
Sweden
88
82
130
128
Switzerland
76
77
157
158
Turkey
69
63
149
191
United Kingdom
71
70
158
156
United States
71
63
186
174
30
Moderate Cuts in Educational Funding
So Far Despite GDP Declining
Impact of the economic crisis on public expenditure on education 2008-2011
Change in public expenditure on educational institutions
Change in Gross Domestic Product
Change in expenditure on education institutions as a percentage of GDP
Index of change
(2008=100)
130
125
120
115
110
105
100
95
90
85
Chart B2.3 – EAG 2014
Hungary
Italy
Estonia
Poland
Russian Federation
United States
Iceland
Israel
Sweden
France
Belgium
Norway
EU21 average
Spain
Austria
OECD average
Korea
Mexico
Portugal
Canada
Chile
Slovenia
Germany
Switzerland
Japan
Netherlands
Ireland
Australia
Finland
Brazil
Slovak Republic
Denmark
New Zealand
Czech Republic
United Kingdom
80
31
But in Some Countries Funding Per Student in
HE Has Not Kept Pace with Enrolments
Change in expenditure per student by educational institutions, tertiary education (2008, 2011)
Change in expenditure
Change in the number of students (in full-time equivalents)
Change in expenditure per student
Index of change
(2008=100)
150
140
130
120
110
100
90
Iceland
Ireland
United States
Austria
Portugal
Belgium
Mexico
Norway
Spain
Brazil
Australia
Germany
Sweden
France
Switzerland
Netherlands
EU21 average
OECD average
Poland
Italy
United Kingdom
Japan
Israel
Denmark
Slovenia
Russian Federation
Chart B1.6 – EAG 2014
Finland
Czech Republic
Korea
Hungary
Chile
Slovak Republic
Estonia
80
32
The Crisis Has Revealed Some
Weaknesses of HE
• High employment rates and earnings signal a
strong need for highly-qualified people – and a
highly qualified population is important for longterm growth
• But in some countries the unemployment rate for
tertiary-educated people has increased
substantially
• HE needs to meet the needs of the labour market
and be responsive to structural economic shifts 
e.g., need for HE to prepare for 21st century skills,
new forms of work like entrepreneurship, etc.
33
Implications for HEIs
• Traditional funding schemes are under pressure – need for
more effective business models.
– Clarify and enhance value proposition of HEIs in a globally
competitive environment
– Identify cost-reducing/ cost-stabilising strategies where possible
– Seek alternative revenues – while recognising limitations of those
relying mostly on cost-sharing
• Promote quality in a constrained environment
– Range of methods to promote quality teaching and learning –
outcomes of IMHE teaching quality reviews 2012
– Funding research excellence: combining funding approaches to
promote competitiveness while maintaining diversity
34
Thank you
www.oecd.org/edu/imhe
[email protected]
35