CWS 3.0: September 21, 2011 - Vol. 3.25

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Europe: Global Differences in Education

The Organisation for Economic Co-Operation and Development (OECD) has just published an extensive report analyzing differences in education, and educational outcomes, around the world.

Education at a Glance 2011 provides a series of international comparisons that gives a fascinating insight into the different levels of effort (and cost) countries put into education and the differing outcomes achieved between those who earn a college degree and those who don’t. As all developed economies compete for skills capabilities, it is clear from this report that some countries are better positioned than others to prosper.

In general terms, the report highlights that a good education and skills are crucial to improving a person's economic and social prospects. People with university degrees have suffered far fewer job losses during the global economic crisis than those without. Unemployment rates among university graduates stood at 4.4 percent on average across OECD countries in 2009. People who did not complete high school, meanwhile, faced unemployment rates of 11.5 percent, up from 8.7 percent the year before. This adds to the already huge problem of youth unemployment, which today exceeds 17 percent in the OECD area.

"The cost to individuals and society of young people leaving school without a qualification keeps rising,” said OECD Secretary-General Angel Gurría. “We must avoid the risk of a lost generation by all means. Despite strained public budgets, governments must keep up their investment to maintain quality in education, especially for those most at risk. Investment in education is not only about money, it's also an investment in people and an investment in the future."

Fifty years ago, higher education was the privilege of the few but, based on current graduation trends, 82 percent of young people today will complete upper secondary education while, in some countries, half the population could soon hold a degree. This is an impressive and positive development; however, it doesn’t give the full picture. Currently, more than 50 percent of 15 to 19 year-olds who are not in school are unemployed or out of the labor force. In most countries, youth not in employment, education or training receive no welfare support. And compared with older age groups, they are twice as likely to give up looking for work and lose touch with the labor market entirely.

On average, a person with a college education can expect to earn 50 percent more than a person without (and 80 percent more for men in Brazil, Czech Republic, Greece, Hungary, Poland, Slovak Republic and U.S.).

Evolving Talent Pools
The OECD report illustrates how the global talent pool is changing: the more educated workforces of Japan and the U.S., which together have nearly half of all college-educated adults in the OECD area (47 percent), have been given a head-start in many high-skill areas.

But the picture is changing, at present, one in three university-educated retirees resides in the U.S., but the U.S. is home to just one in five university graduates entering the workforce worldwide. Conversely, while only 5 percent of adults in China have a college degree, because of its population size, the country now ranks second behind the U.S. and ahead of Japan in the number of the population with tertiary attainment among OECD and G20 countries.

In 2009, more than 50 percent of 25-34 year olds in Korea, Canada and Russia attained tertiary education while, at 40 percent, the U.S. is just above the OECD average. Important countries with below-average levels of tertiary education attainment are Greece, Germany, Portugal, Austria, Mexico, Italy, Turkey and Brazil.

The U.S. is particularly weak in science related fields where the number of college graduates per 100,000 employed 25- to 34-year-olds is significantly below the OECD average. Leading countries in this respect are Korea, New Zealand, France, Finland, UK and Australia.

Cost of Graduates
The average annual labor cost for a tertiary level worker vary considerably from less than US$20,000 in Poland to over US$130,000 in Luxembourg.

The highest living standards (taking purchasing power parity into account) for those with tertiary education are found in Luxembourg and the U.S. followed by Australia, Austria, Ireland, the Netherlands and UK.

The OECD report suggests that, as the global mobility of the workforce increases, it becomes crucial for countries to strike the right balance between fostering overall equity in society and offering strong economic incentives to attract and retain skilled workers.

Education spending
The OECD report includes indicators on the human and financial resources invested in education, on how education systems operate and evolve, and on the returns to educational investment. Some highlights are:

  • OECD countries spent 6.1 percent of their GDP on education in 2008. Between 2000 and 2008, expenditure increased at a faster rate than GDP in 25 of the 32 countries for which data are available.
  • Expenditure per student by college institutions rose 14 percentage points on average in OECD countries from 2000 to 2008. Spending per college student fell in 7 of the 30 countries with available data, as countries’ expenditures did not keep up with expanding enrolments.
  • Spending per student from primary through tertiary education in 2008 ranged from US$4,000 per student or less in Argentina, Brazil, Chile, China and Mexico, to more than US$10,000 per student in Austria, Belgium, Denmark, Ireland, the Netherlands, Norway, Sweden and the U.K., and up to nearly US$15,000 in Switzerland and the United States.
  • Canada, Chile, Korea and the U.S. spend between 2.0 percent and 2.7 percent of their GDP on tertiary institutions. Relative to GDP, the U.S. spends more than three times more on tertiary education than Brazil, Hungary, and the Slovak Republic.

Attracting talent

As national economies become more interconnected and participation in education expands, governments and individuals are looking to higher education to broaden students’ horizons and help them to better understand the world’s languages, cultures and business methods. One way for students to expand their knowledge of other societies and languages, and thus improve their prospects in globalised sectors of the labor market, such as multi-national corporations or research, is to study in tertiary education institutions in countries other than their own.

  • In absolute terms, the highest numbers of international students come from China, India and Korea.
  • Within the OECD area, EU21 countries host the highest number of foreign students, with 38 percent of total foreign students. EU mobility policies become evident when analyzing the composition of this population. Within the share of foreign students enrolled in EU21 countries, 72 percent of students come from another EU21 country.
  • North America is the second most attractive region for foreign students, with a share of 23 percent of all foreign students. The North American region shows a more diversified profile of students than the European Union.
  • The top five destinations for foreign students were the U.S. (18 percent of all foreign students worldwide), the U.K. (10 percent), Australia (7 percent), Germany (7 percent) and France (7 percent).
  • Some new players have emerged on the international education market in the past few years. Besides the five major destinations, significant numbers of foreign students were enrolled in Canada (5%), Japan (4%), the Russian Federation (4%) and Spain (2%) in 2009.
  • The United States is declining in prominence: Over a nine-year period, the share of international students who chose the U.S. as their destination dropped from 23 percent to 18 percent.

Global employers have an advantage in being able to tap into a global talent pool. Others are more reliant on national educational policies to deliver a workforce with the right skills to compete in the global economy. While both the U.S. and Western Europe have advantages in many respects, they cannot be complacent as other countries invest for the future and put themselves in improving positions to compete for rare skills.

“The size of the investment in education is now too big, and its benefits too central to the success of economies and societies, for the design of effective education systems to take place in the dark," Gurría concludes. "With economic competition now global, countries can no longer afford to measure their education systems against national standards.”

 Click here to access the full report.

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