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The OECD Skills Strategy
Better skills, better jobs, better lives
Bert Brys
Senior Tax Economist, CTP/OECD
LAC Fiscal Forum 16-17 June 2015
OECD Skills Strategy (2012)
2
Skills transform lives and drive economies
What people know and what they can do has a major impact on their life chances
Building the right skills can help countries improve economic prosperity and social cohesion by supporting:
improvement in productivity and growth
high levels of employment in good quality jobs
social outcomes such as health, civic and social engagement
What do we mean by skills?
“Skills (or competencies) are defined as
the bundle of knowledge, attributes and capacities
that can be learned and that enable individuals to
successfully and consistently perform an activity or task
and can be built upon and extended through learning.”
“The sum of all skills available to the economy at a given
point in time forms the human capital of a country.”
OECD Skills Strategy (2012)
4
What is the OECD Skills Strategy?
5
Skill levels vary considerably across countries
Source: OECD, Survey of Adult Skills 2012
0,8
4,2
0,7
0,8
0,5
1,4
0,0
0,3
0,9
1,9
1,2
1,5
0,3
5,2
1,8
0,4
2,2
0,6
0,3
2,3
0,4
0,0
0,0
1,2
80 60 40 20 0 20 40 60 80
Spain
United States
Italy
France
Ireland
England/N. Ireland (UK)
Poland
Korea
Canada
Australia
Average
Germany
Russian Federation³
Flanders (Belgium)
Austria
Estonia
Norway
Czech Republic
Slovak Republic
Netherlands
Denmark
Sweden
Finland
Japan
Level 2 Level 1 Below Level 1 Level 3 Level 4/5 No information
%
Adult Mean Numeracy Skills by Proficiency Levels (PIAAC, 2012)
Skills vary across levels of educational attainment and
across OECD countries
Source: OECD (2013), PISA 2012 Results: What Makes Schools Successful? Resources, Policies and Practices (Volume IV), PISA , OECD Publishing.
Mean literacy score of 25-64 year olds, by educational attainment (PIAAC, 2012)
200
220
240
260
280
300
320
Jap
an 2
96
Net
her
lan
ds
282
Fin
lan
d 2
87
Swed
en 2
79
Au
stra
lia 2
80
Cze
ch R
epu
blic
27
3
Flan
der
s (B
elgi
um
) 2
74
No
rway
28
0
Un
ited
Sta
tes
26
9
Ave
rage
27
2
Po
lan
d 2
64
Au
stri
a 2
68
Engl
and
/N. I
rela
nd
(U
K)
27
4
Slo
vak
Rep
ub
lic 2
73
Fran
ce 2
60
Ger
man
y 2
69
Den
mar
k 27
0
Irel
and
26
6
Ko
rea
26
9
Can
ada
273
Esto
nia
27
4
Spai
n 2
51
Ital
y 2
49
Ru
ssia
n F
eder
atio
n*
27
6
Below upper secondary education Upper secondary or post-secondary non-tertiary education Tertiary education
PIAAC mean literacy score for all levels of education combined
Evolution of the employment-to-population ratio
Percentage of the working-age population (aged 15 or more)
30
40
50
60
70
80%
Current(Q2 2014)
Start of the crisis(Q4 2007)
Projected value(Q4 2016)
Labour productivity and labour resource utilisation differ
considerably across the OECD
-70
-50
-30
-10
10
30
50 A. Percentage GDP per capita difference compared with the upper half of OECD countries¹
-70
-50
-30
-10
10
30
50B. Percentage difference in labour resource utilisation and labour productivity²
Labour productivity Labour resource utilisation
9
Low Skills – High (Youth) Unemployment
Poland
Estonia
Japan
S. Korea
Germany
Slovak Rep.
Czech Rep.
United States
Denmark
Spain
Austria
Canada
Italy
Norway
Sweden
Netherlands Finland
Australia
France
Ireland
255
260
265
270
275
280
285
290
295
300
305
0 10 20 30 40 50 60
PIA
AC
Lit
er
ac
y S
co
re
s,
16
-24
Y
ea
r O
lds
Youth Unemployment
Countries with low skills tend to have higher
unemployment, especially among young people (also
because “insiders” are “protected”).
Source: PIAAC, OECD Employment Database
A large % of Chilean and Mexican youth is NEET:
neither employed nor in education nor in training
Source: OECD (2014), Education at a Glance 2014, OECD Publishing.
0
5
10
15
20
25
30
Tu
rke
y
Spa
in
Italy
Chile
Me
xic
o
Ire
land
Bra
zil
Hung
ary
Slo
vak R
epu
blic
Kore
a
Port
ug
al
Fra
nce
United
Kin
gd
om
Pola
nd
Esto
nia
Isra
el
United
Sta
tes
OE
CD
ave
rag
e
Belg
ium
New
Ze
ala
nd
Gre
ece
Czech R
ep
ub
lic
Cana
da
De
nm
ark
Fin
land
Austr
alia
Slo
ven
ia
Germ
any
Austr
ia
Sw
ede
n
Sw
itze
rla
nd
Icela
nd
Norw
ay
Luxe
mb
ou
rg
Neth
erla
nds
% of 15-29
year-olds
NEET population among 15 to 29 year-olds (2012)
11
Linkages between Skill Development and Skill Activation
Labour Market
Participation Skills Levels
Use of Skills at Work
Use of Skills at Work (PIAAC, 2012)
1,4
1,6
1,8
2
2,2
2,4
Reading at work Writing at work Numeracy at work ICT at work Problem solving atwork
Ind
ex
of
Us
e
Average Spain United States
Most frequent use= 4
Least frequent use = 0
The demand for skills is changing
13
Levy and Murnane
New technologies and work practices
are transforming workplaces
20
10
0
10
20
30
40
50
60
Sw
ed
en
Fin
lan
d
De
nm
ark
No
rwa
y
Un
ite
d K
ing
do
m
Ne
the
rla
nd
s
Ko
rea
Es
ton
ia
Ire
lan
d
Latv
ia
Fra
nc
e
Lu
xem
bo
urg
Av
era
ge
Cro
ati
a
Cze
ch
Rep
ub
lic
Slo
va
k R
ep
ub
lic
Be
lgiu
m
Ge
rma
ny
Au
str
ia
Po
rtu
ga
l
Slo
ve
nia
Gre
ec
e
Ita
ly
Hu
ng
ary
Tu
rke
y
Sp
ain
Po
lan
d
Low-skilled clerical High-skilled clerical Low-skilled manual
High-skilled manual Total
14
Percentage of workers who reported changes in their current workplace during the
previous three years that affected their work environment
15
High level skills will be in high demand
Job opportunities in EU 28 by qualification levels, forecast 2013-2025 (baseline scenario, 000s)
(ISCED 1 and 2) (ISCED 5 and 6) (ISCED 3 and 4)
Source: CEDEFOP skills forecast, 2013-2025
-20.000
-10.000
0
10.000
20.000
30.000
40.000
50.000
Low Medium High
Expansion Demand Replacement Demand
16
Taxation and Skills Activation, Development and
Effective Use
Employment
Labour Tax Wedge
Skill Levels
Where taxes on labour are too high, it can be too expensive to hire, and not rewarding enough to work, to up-skill or to change jobs where skills are rewarded more.
Financing Education: total spending on education
(primary, secondary and tertiary education)
0
2000
4000
6000
8000
10000
12000
14000M
exic
o
Ch
ile
Hu
nga
ry
Slo
vak
Re
pu
blic
Cze
ch R
epu
blic
Po
lan
d
Isra
el
Ko
rea
Po
rtu
gal
Ital
y
Slo
ven
ia
Fin
lan
d
Fran
ce
Spai
n
Un
ited
Kin
gdo
m
Swed
en
Au
stra
lia
Bel
giu
m
Irel
and
Net
her
lan
ds
Au
stri
a
Un
ited
Sta
tesO
vera
ll Sp
end
ing
on
Ed
uca
tio
n U
SD,
adju
sted
fo
r G
DP
0
20
40
60
80
100
Job-related adult education
Participation in job-related adult education varies
Source: OECD (2013), OECD Skills Outlook 2013: First Results from the Survey of Adult Skills, OECD Publishing.
Participation in job-related adult education (PIAAC, 2012)
% of adults
19
Financing and expenditure on Skill systems &
Employment & Skill Levels
Employment
Financing &
expenditure on
Skill systems
Skill Levels
• Create effective, efficient and equitable financing policies. • Set up financing policies that create strong incentives for all
stakeholders to maximise skills development, activation and use.
20
What is the OECD Skills Strategy?
OECD Skills Strategy – Developing relevant skills
21
Developing relevant skills
What skills are relevant
How can skills be developed
effectively (where, when and how)
OECD Skills Strategy – activating skills supply
22
Activating skills supply
How can people be encouraged to
bring their skills to the labour market
stay in the labour market
OECD Skills Strategy – putting skills to effective use
23
Putting skills to effective use
How can people get into jobs that use their skills
How can employers make better use of skills
How can skills be used in alternative and better ways
(e.g. through innovation, entrepreneurship, freelancing)
How can countries develop more highly-skilled economies
OECD Skills Strategy – strengthening skills systems
24
Strengthening skills systems
How to get coherent policy settings -- across portfolios
and levels of government
How to engage all relevant stakeholders
How to ensure that policies are effectively implemented
25
OECD Skills Strategy – building national skills strategies
Building effective skills systems at national and local levels
Strategic Approach to Skills Policies – a framework
Facilitating better policy development and
effective implementation
2013
ACTIVE
LEARNING
(tbc)
DIAGNOSTIC PHASE
2014 2015
ACTION PHASE NOR
AUT
KOR
PRT
IMPLEMENTATION
ESP (tbc)
(tbc)
OECD Skills Strategy country projects underway
DIAGNOSTIC PHASE
DIAGNOSTIC PHASE
DIAGNOSTIC PHASE
DIAGNOSTIC PHASE
Collaboration between OECD and country Tailored to country context and priorities Cross-directorate OECD team National cross-ministry project team
Guiding principles for National Skills Strategy projects
Strengthening policy coherence on skills Whole-of-government approach Engaging all relevant stakeholders
Challenging perceptions with evidence Drawing together experience within a country Learning from international comparisons Learning from other countries
Better Skills, Better Jobs, Better Lives
Bert BRYS, Ph.D.
Senior Tax Economist
Head Country Tax Policy Team
Head Personal and Property Taxes Unit
Tax Policy and Statistics Division Centre for Tax Policy and Administration
2, rue André Pascal - 75775 Paris Cedex 16 Tel: +33 1 45 24 15 97 – Fax: +33 1 44 30 63 51
[email protected] || www.oecd.org/tax
For more information, please contact:
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