SKILLS BEYOND EDUCATION An analysis of cognitive skill evolution and its implications for employment chances

Skills are at the core of improving individuals’ employment outcomes and increasing countries productivity and growth while ensuring social cohesiveness. This is particularly relevant as today’s global competition is characterized by a higher share of knowledge-based content which heavily relies on high-level cognitive and behavioral skills. The 1994-1998 International Adult Literacy Survey (IALS) and the 2012 Survey on Adult Skills (PIAAC) are unique datasets providing measures of individual cognitive skills for a representative sample of the adult age population across a number of OECD countries using methods of educational testing jointly with household survey techniques. Thus, they offer an exceptional opportunity to better understand how cognitive skills have evolved and how they are likely to influence our lives now and in the future, particularly in what refers to employment chances. The aim of this technical report is threefold: (1) to analyse the current levels and distribution of skills in the working-age population of the sixteen Member States which participated in PIAAC; (2) to investigate to what extent these skills are important for labour market success; and (3) to examine how individuals (and the population) gain, lose and preserve their cognitive skills over time. To further complement this empirical evidence, we investigate the employment dynamics with respect to economic factors. The observed trends go in the direction of a concentration of employment in sectors which are more likely to require a higher educational level and consequently a higher level of skills. With all the caveats in mind, the reasoning behind this simple exercise is to grow awareness about the need to reinforce skills, and desirably, anticipate skills needs, through both efficient education policies and active labour market programs, including training.JRC.DDG.01-Econometrics and applied statistic

Updating the adult and literacy life skills survey: estimating change in skills distribution since 2006

This paper firstly estimates the effect of population changes since 2006 on the skills distribution of the population. Secondly, the paper estimates the reach of adult literacy and numeracy programmes by skills levels in the adult population. Summary New Zealand is currently participating in the Programme for the International Assessment of Adult Competencies (PIAAC). PIAAC includes an international survey of adult skills which will update information on the literacy and numeracy skills of the adult population – last surveyed in 2006 in the Adult Literacy and Life Skills (ALL) Survey. The PIAAC survey results will be available in July 2016. This gives us an opportunity to trace the shift in skills in the eight years between the two surveys. Our modelling finds that the changes in the age structure, education and other characteristics of the population since 2006 will have little to no overall effect on the distribution of skills. While there have been considerable shifts in the age structure and characteristics of the adult population, these are likely to cancel each other out in terms of effect on average numeracy and literacy skills. Shifts are more likely to be noticeable for specific sub groups. From 2010 to 2013, around 275,000 adults were assessed for reading or numeracy or both on the Literacy and Numeracy for Adults Assessment Tool. Most of these people would have participated in, or had access to, literacy and numeracy provision, and in doing so, had the opportunity to improve their literacy and numeracy skills. Analysis suggests that impact of this provision on the literacy and numeracy skills across the total adult population is likely to be noticeable but relatively small. The scores of the adults who have been assessed can be translated into ALL proficiency levels and compared with the projected distribution of skills in the total population. From this it is estimated that around 10% of the adult population with ALL level 1 document literacy skills were assessed in reading and 15% of the population with ALL level 2 scores. For numeracy, the figures are 11% for each level

Cognitive skills and the LOGSE reform in Spain: evidence from PIAAC

We use data from the Spanish sample of the Programme for the International Assessment of Adult Competencies to analyze the effect of the LOGSE (Spanish acronym for General Law of the Education System) reform passed in 1990 on numeracy and literacy proficiency of the adult population. The LOGSE effect is identified by exploiting the variability of the rate of implementation among cohorts and regions. The results change depending on the specification of the econometric model and mainly on the type of birth year trend assumed. Nonetheless, overall results suggest that the LOGSE reform did not help to increase cognitive skills of the population despite an extension of compulsory years of education and postponement of the age of initial tracking into vocational and academic studies

Policies for an Ageing Workforce Work-life balance, working conditions and equal opportunities 2019

At a time of rapid population ageing, a key means of sustaining current welfare states is to extend the length of working lives. In 2050, the share of people over the age of 75 years will be the same as the share over 65 years today. And just as not all are able to work to the age of 65 now, not everyone will be able to work to the age of 75 in 2050; even if future older workers will in all likelihood be healthier and have better working aids at their disposal. Extending average working lives by 10 years, and at the same time ensuring an adequate social safety net for those unable to work into their late 60s and 70s, is a major social policy challenge for the coming decades. And because people are much more likely to work late in life if they had stable careers before reaching 60, tackling this policy challenge means pulling on many more social policy levers than just pension policy. While being keenly aware of these issues and how they relate to the overall agenda of active ageing, Commissioner Thyssen also reminds us in her Foreword that marked increases in life expectancy – both past and in the future – represent enormous social progress. The Commissioner makes the point that older people too contribute to society. And more so with lifelong learning and investment in skills

Literacy and numeracy skills and labour market outcomes in Australia

Australian adults are above the OECD average in literacy but only average in numeracy, according to a staff paper released by the Productivity Commission. The paper analyses the profile of adult literacy and numeracy skills in Australia, and how important those skills are for labour market outcomes. Key points: Adult literacy and numeracy skills contribute to wellbeing in many ways. At an individual level, they are central to social and economic participation. Literacy and numeracy skills are a core part of a person\u27s human capital. They also support the development of other forms of human capital, including knowledge, other skills and health. Some Australians have low (level 1 or below) literacy and numeracy skills. In 2011–12: 14 per cent of Australians could, at best, read only relatively short texts from which they were able to locate only a single piece of information. 22 per cent could only carry out one-step or simple processes such as counting where the mathematical content is explicit with little or no text or distractors. At the other end of the skill distribution, 16 per cent of Australians had high (level 4/5) literacy skills and 12 per cent had high numeracy skills in 2011–12. People with high literacy skills can make complex inferences and evaluate subtle truth claims or arguments in lengthy or multiple texts. People with high numeracy skills can understand a broad range of mathematical information that may be complex, abstract or embedded in unfamiliar contexts. Most Australians have skills somewhere between these levels. Groups with relatively low literacy and numeracy skills include: people with low levels of education; older persons; people not working; and immigrants with a non-English speaking background. Compared with other countries in the OECD, Australia performs above average on literacy but average in numeracy. Higher literacy and numeracy skills are associated with better labour market outcomes (employment and wages). Econometric modelling shows that: an increase in literacy and numeracy by one skill level is associated with an increased likelihood of employment of 2.4 and 4.3 percentage points for men and women, respectively an increase in literacy and numeracy skills is associated with a similar increase in the probability of employment, whether a person had a degree, diploma/certificate or Year 12 education an increase in literacy and numeracy by one skill level is associated with about a 10 per cent increase in wages for both men and women. This positive association is equivalent to that of increasing educational attainment from Year 11 to Year 12 or to a diploma/certificate up to 40 per cent of the association between education and employment is attributable to literacy and numeracy skills. These results are consistent with education providing many other attributes of human capital that are valued in the workplace more than half of the \u27penalty\u27 that affects the wages of people with a non-English speaking background is explained by their lower literacy and numeracy skills. • Staff working papers are not formal publications of the Commission. They have been prepared and are authored by individual staff to advance understanding of issues on the Commission’s supporting research program

Sectoral Cognitive Skills, R&D, and Productivity: A Cross-Country Cross-Sector Analysis

We focus on human capital measured by education outcomes (skills) and establish the relationship between human capital, R&D investments, and productivity across 12 OECD economies and 17 manufacturing and service industries. Much of the recent literature has relied on school attainment rather than on skills. By making use of data on adult cognitive skills from the Programme for the International Assessment of Adult Competences (PIAAC), we compute a measure of sectoral human capital defined as the average cognitive skills in the workforce of each country-sector combination. Our results show a strong positive relationship between those cognitive skills and the labour productivity in a country-sector combination. The part of the cross-country cross-sector variation in labour productivity that can be explained by human capital is remarkably large when it is measured by the average sectoral skills whereas it appears statistically insignificant in all our specifications when it is measured by the mere sectoral average school attainment. Our results corroborate the positive link between R&D investments and labour productivity, finding elasticities similar to those of previous studies. This evidence calls for a focus on educational outcomes (rather than on mere school attainment) and it suggests that using a measure of average sectoral cognitive skills can represent a major step forward in any kind of future sectoral growth accounting exercise

Heterogeneity of Skill Needs and Job Complexity: Evidence from the OECD PIAAC Survey

We use information from the new OECD Survey of Adult Skills (PIAAC) to investigate the link between job tasks and cognitive skill demand in 22 advanced economies. Skill demand is operationalized by the assessed literacy and numeracy skills of workers with well-matched skills to their job duties. Jobs are categorised according to the nature of tasks, including the intensity of abstract reasoning, employee latitude, interactivity or manual work. The analysis confirms the significant relation between task complexity and higher skill needs. The significant relation holds independently of the endogenous supply of formal human capital, occupational or industrial structure and other job or individual characteristics. The results confirm the (indirect) mapping between tasks and skills as predicted by the task approach to labour economics. Given the marked heterogeneity in workplace practices adopted by employers, it is clear that enterprise level workplace development policies are warranted as enablers of skills matching and higher labour productivity