Exploring school-to-work transitions

Alison WolfKing’s College London

Today’s World

• Huge expansion in education – in the developed world, full-time to 18 the norm, in developed and developing, very rapid growth in higher education

• Major changes in structure of labour market• In most developed countries, disappearance

of the youth labour market

Disappearance of the youth labour market for 16-18 year olds

Recent in the UK which maintained teenage employment at high levels longer than most other European countries. Long-standing in

mainland Western Europe.

Large growth in UK enrolments reflects disappearance of youth labour market, and also low apprenticeship numbers

Part-time education shrinks among the young

Structurally high unemployment for 18-24 year olds

More recent, potentially more amenable to policy interventions but

also highly damaging to those involved

Today, the UK is quite typical of developed economies in a number of key ways. Problems of transition are general and quite intractable.

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Relative unemployment of young adults: 2009

Ratio of the unemployment rate of 20-24 year-olds to those of adults (aged 25-64). (OECD Stat Extracts, http://stats.oecd.org/Index.aspx)

Scant reading skills (% 15-year-olds)

HE graduates (% age 30-35)

STEM (% of all students HE)

Unemployment rate (age 15-24)

Germany is the best-known ‘positive’ outlier – although they too have labour market challenges.

Unemployment according to level of qualification

Qualification Employment in low paid work (%)

Overall male female

Overall 15.5 9.8 22.2

No qualification 40.7 27.8 51.4

IVET 16.9 11.0 23.6

Further training 4.8 2.6 10.6

Higher education 4.5 2.9 6.3

Transition into low paid work

Source: IAB panel study, 2011Note: OECD definition of low paid work (wages below two-thirds of median income)

New transition patterns in higher education

• Bachelor degrees ‘overloaded’: do not leave students opportunities to– develop practical skills– develop language skills– gain intercultural experience– develop analytical and problem-solving skills in professional area

• Masters degrees as labour market transition currency• Problems with selective access to Masters degrees

Income according to degree type

Annual income in first job after graduation (before tax)

Bachelor degrees

traditional 1st

degrees

University 27,700 37,500

Fachochschule 33,650 37,250

Source: Rehn et al., 2011

The Background

Economic change, education and transitions

The ‘hourglass economy’

• Post-war, huge increase in professional, managerial and technical jobs. Growth has slowed enormously.

• Huge productivity rises in manufacturing and services have squeezed the number of skilled jobs in manual and white-collar middle ranks

• Big increase in numbers of low-paid service job, which require soft rather than technical skills

• However, these changes, while real, are ongoing, and do not particularly impact on the young rather than on older workers

Manufacturing as a share of GDP

The fastest-growing – and the largest growth

The vast majority get jobs, BUT

• In some areas, unemployment rates are twice as high as national as national averages

• Many jobs are short term – a lot of ‘churning’• Most ‘NEETS’ have gone in and out of short-

term employment• Unemployment scars permanently in many

cases• ‘High-quality’ progression routes are not

available to many young people

Formal education is increasingly seen as vital for life-chances, not just as a source of skills but as a gateway into the upper parts of the labour market. Employers may complain about the quality of education (and do, everywhere). But they use it, constantly, as a screening device and a ranking device.

High-quality access routes (1): higher education

• Application rates have not been affected permanently by fees

• Have stabilised since 2010 in England, Scotland and Wales and even though England has highest fees, also has highest application rate (43%)

• Return to a degree has also remained high. Completion rates are at top end for OECD

High quality access routes (2): apprenticeship

• Near-demolition of traditional high-quality apprenticeship route, but where survives, remains highly desired and shows high returns

• Funding + targets regime (established by successive governments) resulted in a growing proportion of so-called apprenticeships being given to older employees. Decreasing proportion at ‘level 3’ especially for young people. Huge excess demand for good placements

Current apprenticeship reform of critical importance

But success not guaranteed – trying to recreate demolished institutions is

hard

Returns to qualifications

• Vocational awards ‘deliver’ as part of apprenticeship: most lower-level

awards delivered in education or by private training providers do not.

• Less qualified young people, and those on active labour market

schemes (eg Work Programme), have been chanelled into programmes

which award these low-status awards with no progression routes/wage

returns

• Pre-18, recent reforms have changed the funding system, but post-18,

still payment-by-qualification-awarded: training providers incentivised

to offer easy awards and ensure 100% success on internally assessed

qualifications.

Forthcoming and ongoing reforms

• ‘Study programmes’ for 16-18 year olds in full time education which prioritise work experience

• English and maths for all lower-achieving 16-18 year olds• ‘Traineeships’, subsidising work experience• Wage subsidies • Apprenticeship reform (barely started yet)• Qualification reform for 16-18 year olds (general academic;

applied general; technical (occupational) – ‘Tech Bacc’, currently a level 3 technical/occupation + level 3 maths and extended project

The prognosis

• Work experience placements – pilots encouraging

• Wage subsidies – a failure (as has often been the case with similar initiatives)

• Qualification reform – not yet clear• English and Maths – better late than never• Apprenticeship reform – too early to tell but

both key and difficult

Workplace experience is critical

• Saturday jobs

• Substantial work experience

• Traineeships

• Apprenticeships