Educational attainment and training

Human capital improvement surely stands out in the social investment perspective. In the new knowledge-based economies there is an urgent need to invest in human capital throughout the life course of an individual citizen. Youth with poor skills or inadequate schooling today are at risk of becoming

Figure 7.44. Proportion of children under 3 enrolled in formal childcare services, 2008. Source: OECD, Doing Better for Families (2011a).

tomorrow's insecure workers. Considering the looming demographic imbalances in Europe, large skill deficits and elevated school drop-out rates aggravate the situation. The design of education systems makes a difference. Inequality and extreme educational differentiation reinforce cognitive poverty, early stratification, and social segregation. When social and employment policies promote skills and develop the quality of human resources, they act as 'productive factors' in our economies.

Investment in education represents a direct investment in human capital. Total spending on education per student differs a lot among the fourteen Member States under review, as can be observed from Fig. 7.46. All countries experience upward trends, but the levels are quite different. Denmark and Austria reach over €8,000 per student in 2005, while Greece and Portugal remain below €5,000. Italy has had quite high levels since 2000, but remained stable at the same level until 2005. The Netherlands has improved a lot, and has become the third best performer after Austria and Denmark. All in all it seems that the Scandinavian countries and Austria spend the most on education and the southern countries the least.

Fig. 7.47 shows public expenditure on education in European countries in 1997 and 2007, and on average. With spending of more than 6 per cent of GDP, the Scandinavian countries are at the top once again. Public spending for education varies between 6 and 3 per cent in most Continental, southern, and new EU Member States.

The differences in the allocation of public resources to either social investment policies (such as education and training) or to compensating policies

Figure 7.45. Maternal employment rate by number of children and age of youngest child.

Notes: In both panels countries are in ascending order of maternal employment rate with youngest child aged 0-16. Panel A: For Australia, Iceland, and Ireland children aged <2 and 3-5 are grouped together as children aged under 6. Panel B: For Australia and Iceland the 'two children' group represents '2+ children'.

Relevant years are: Denmark, 1999;Belgium, Canada, and Japan, 2001;Finland, Iceland, and Italy, 2002;Sweden, 2003;Australia, 2005;Switzerland, 2006.

Data is missing for Chile, Estonia, Israel, Korea, Mexico, Norway, Slovenia, and Turkey.

Sources: Australia, Australian Bureau of Statistics (2005);Statistics Canada (2001 data);Statistics Denmark (1999 data);Statistics Finland (2002 data);Statistics Iceland (2002 data for women age 25-54);Japanese authorities (2001 data);Swiss LFS (2006 2nd quarter data);UK Office of National Statistics (2005 data); and the US Current Population Survey (2005 data); all other EU countries, European Labour Force Survey (2005 data, except for Italy which is for 2003). OECD, Doing Better for Families (2011a).

Notes: Participation is measured as the 'difference in employment rates between women and men in percentage points, measured in head counts, using harmonized data from the European Labour Force Survey (ELFS) 2005'. Unemployment refers to the 'difference in unemployment rates between women and men in percentage points, again using data from the ELFS 2005'. Pay is the 'difference between men's and women's average gross hourly earnings as a percentage of men's'. Income refers to the gender poverty gap. Political power measures the 'difference in the share ofwomen and men in parliament'. Socio-economic powerrefersto the 'difference between theshareofwomen and men in International Standard Classification ofOccupations category1'. Care measures the difference in time spent on caring activities. Leisure is the 'difference between the average time per day spent on leisure by men and women as a percentage of the average time per day spent on leisure by men in the age group 20-74'. All indicators are standardized and weigh equally in the composite index. Indicators give the distance to inequality measured between 0 and 1.

Source: Plantenga etal., 2009.

Figure 7.46. Expenditure on public and private educational institutions (per student/ pupil in EUR PPS, for all levels of education combined, based on full-time equivalents), 1997-2007.

Source: Eurostat.

such as social benefits and passive and active labour market policies are most evident in Fig. 7.48, which shows public spending on education and social expenditure combined. While there is a general positive association between both areas of public spending, some countries, in particular the Scandinavian ones but also Belgium and France, combine above-average spending on social policies with above-average spending on education (Nikolai, 2012). Germany and Italy, in contrast, spend quite a lot on social protection but are relatively close on educational expenditure. Many new EU Member States devote few resources to social policies, but some, such as Poland, Hungary, and the Baltic states, achieve the European average in terms of educational spending.

It should be noted that educational outcomes throughout Europe have improved. Furthermore, Scandinavian countries spend the most on education in terms of percentage of GDP as well as dollars per student. These investments also yield good overall results regarding the educational outcomes in Sweden and Finland and to a lesser extent in Denmark. Southern European countries exhibit both low levels of spending and of outcomes. Other regime types show a wider variation throughout the different indicators and between the countries (on the use of indicators, see Atkinson et al., 2002).

Figure 7.47. Public expenditure on education (% of GDP). Source: OECD.

Investment in human capital takes place in the early stages of life but, due to rapidly changing work environments, people need to keep investing in their human capital throughout their life cycle. To measure the extent to which the population invests in its human capital, it is necessary to look at both initial education and lifelong learning.

The percentage of the 20-24 year old population with at least an upper secondary education is highest in some of the new Member States and in Finland and Sweden, followed by the Continental and Anglo-Saxon regimes (Fig. 7.49). The participation rates are especially low in Portugal and Spain. In general, participation rates increased or remained stable within all European Union Member States between 1997 and 2007, with the most dramatic increases in Italy and the UK.

Some countries are more successful than others in achieving high and egalitarian cognitive skills. While there is no recent assessment of adult skills levels, the OECD PISA study found major differences in pupils' competence levels across countries and considerable differences in competences within countries depending on the effect of the family background. The reading test scores show Finland, Ireland, and Sweden to be highest in comparison to the

Figure 7.48. Public social expenditure and spending on education, 2004 (% of GDP). Source: Eichhorst and Hemerijck (2010).

other fifteen countries, while Slovakia and the Mediterranean countries obtained comparatively low scores (Fig. 7.50).

Fig. 7.51 shows the range of student performance on the reading scale from the 2006 study. Public early childhood education and comprehensive schooling can help reduce the reproduction of inequality and low skills (OECD, 2006b).

Apart from marked differences in participation and also in the provision of qualified extramural childcare, countries differ with respect to both the institutional structures of education and training and the educational attainment of the population. Most countries still do not achieve basic formal skills for all. A varying, but still considerable part of the working-age population does not

Figure 7.49. Population aged 20-4 with at least an upper secondary education. Source: Eurostat.

achieve at least upper secondary education, i.e. qualified schooling or vocational training, as Fig. 7.52 shows. The good thing, however, is that the share of the low-skilled declined in most countries. Studies on PISA test results show lower literacy scores for children with a migration background in European countries. Dronkers and Heus (2010) show that negative selectivity of guest- workers, being more likely to have only low educational levels, continues to play an important part in explaining low scores for the educational achievement of children, for instance, with a Turkish background across Europe, regardless of the education system. This indicates that problems in overcoming social inequality in schools persist, especially for migrants.

In general there has been a slight decrease in early school leaving between 2000 and 2007. The highest drop-out rates exist in the Mediterranean countries, ranging from 15 per cent (Greece 2007) to more than 40 per cent (Portugal 2007), followed by the Anglo-Saxon and Continental countries.

The number of persons with tertiary education attainment aged 24-35 increased between 2000 and 2007, especially in Ireland and Poland (Fig. 7.53). While the Scandinavian and Anglo-Saxon countries reached levels around 40 per cent in 2007, in Austria, Germany, Italy, Portugal, and several of the new Member States less than 30 per cent of the corresponding population aged 24-35 attained tertiary education.

There are also marked differences in terms of participation and intensity of lifelong learning activities (OECD, 2005a). In general, participation in continuous education and training is more pronounced in the Scandinavian countries and the United Kingdom where on-the-job training is also a functional equivalent to more formal vocational training. However, despite some increases in most countries, the adjustment of skills over the life course is still

Figure 7.50. PISA reading scores (age 15), 2000, 2003, and 2006.

Source: OECD, Programme for International Student Assessment (PISA), 2000/2003/2006.

Figure 7.51. Student performance on the reading scale. Source: OECD PISA 2006.

far from perfect. Particular deficits are found in the Continental and southern European countries and in most new EU Member States.

The Scandinavian countries, the UK, and the Netherlands are the only countries where more than 15 per cent of the population is participating in lifelong learning (Fig. 7.54). Sweden and Denmark have particularly high rates, approaching 35 per cent. The rest stay below 10 per cent, although

Figure 7.52. Early school leaving.

Note: An 'early school leaver' refers to a person aged 18-24 who has had no more than a lower secondary education and is not involved in further education or training.

Source: Eurostat.

Spain and Austria have experienced some increase. Overall there is an increase, but with wide fluctuations and large differences between countries.

Relating employment rates and participation in lifelong learning shows that countries with the former is high usually have a high participation in the latter (Fig. 7.55).

For the exit age of older employees from work and lifelong learning, it is apparent that although countries such as Greece, Portugal, and Denmark do not follow the general pattern, countries with a higher exit age demonstrate on average a higher participation in lifelong learning. However, this could be due to increases in pension age being accompanied by measures to increase lifelong learning (Fig. 7.56).

In terms of spending, social investments are highest in the Scandinavian countries, followed by the Continental, the Anglo-Saxon, and the Mediterranean regimes, and the new Member States; however there are considerable differences, especially in the field of child and elderly care. Educational

Figure 7.53. Population aged 24-35 with tertiary education attainment, 2000 and 2007.

Source: Eurostat.

outcomes have improved throughout Europe during the past decade. Spending on education per student rose, educational participation of 15-24 year olds increased, and so did the number of tertiary graduates and people with upper secondary education. Participation in lifelong learning increased. Very importantly, gender inequality declined overall in Europe. In the new Member States as well as the Anglo-Saxon countries the gender pay gap shrank as well. Nonetheless, considerable differences persist concerning maternal employment across regimes, with Scandinavia exhibiting the highest employment rates followed by the Continental, the Anglo-Saxon, and the Mediterranean regimes and the new Member States. Childcare enrolment continues to differ between the regimes especially for younger children and by income. While Scandinavian countries are more egalitarian in the distribution of childcare, including for small children, other regime types depict higher differences across income groups or a generally low levels of childcare for children aged below 3 or 4. Overall, these outcomes suggest that there is a significant trend towards social investment across EU Member States with respect to higher educational spending and rising educational attainment, accompanied by a decline in gender inequality. Overall, social investment

Figure 7.54. Participation in lifelong learning, 1997 and 2006. Source: Eichhorst and Hemerijck (2010).

spending did not increase massively in most countries revealing how difficult it is to reallocate passive social protection spending towards more capacitating social investment. If aggregate public spending only is taken into consideration, one cannot really speak of an explicit policy shift towards social investment (Hudson and Kuhner, 2009; Wolf and Zohlnhoefer, 2009; Streeck and Mertens, 2011). Childcare enrolment and spending, together with maternal employment patterns continue to show significant variation across Member States in the levels of care offered, the use of facilities, and the extent of ability to balance work and family. The Scandinavian countries are leading not only in terms of maternal employment but, unsurprisingly, also in family policy support. While the members of the Continental regime are catching up, the difference, especially in the new Member States, is considerable. On the other hand, not all policies addressing social investment, for instance regulations on gender equality or the reconciliation of work and family, are reflected in public spending.