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Europe - North/South divide is based on skills, says report

29 December 2011

Unemployment and underemployment are a big part of the problem in Greece, Italy, and southern Europe's other debt crisis-stricken countries, except among residents with college degrees. Surveys conducted from 2009 to 2011 by research firm Gallup indicate that median figures among those in southern Europe, who have completed tertiary education, are almost identical to those in more economically stable countries in northern and western Europe.

The median unemployment rate among the 16 high-income European countries is just under 9% for 2011, according to Gallup's global unemployment measure. In most southern European countries, including Spain, Greece, and Portugal, the rates are significantly higher. This is in part because those with a primary or secondary education are about twice as likely to be unemployed in the south as they are in the north and west. However, 5% of southern Europeans with a college education are unemployed, identical to the rate among college-educated residents in northern and western Europe.
 
Higher education is less prevalent in southern Europe, according to OECD statistics, resulting in an oversupply of labour for low-skill jobs in that region, and a shortage of highly skilled workers. That raises the demand, and therefore the relative incomes, of college-educated workers in southern Europe, about half (49%) fall into the top 20% of household incomes in their respective countries, a significantly higher percentage than in northern/western Europe (36%).

High-skilled labour shortages in some southern European countries also limit their potential growth in vital knowledge-based industries. To make matters worse, many positions that don't require higher education, such as manufacturing jobs, are now diverted to cheaper labour markets in China and India. The resulting joblessness and underemployment among less educated residents has reduced tax revenues in some of Europe's most debt-laden countries, and has required their governments to spend more on unemployment benefits.

Greece, Italy, and southern Europe's other crisis-stricken countries will face huge challenges in the coming years as they seek to boost the productivity of their workforces and prevent the conditions that led to their massive government debt burdens. These results highlight the importance of making higher education an area of focus in an effort to revitalise the economies of countries such as Greece and Italy.

Increasing public investment in colleges and universities may be politically difficult amid calls for deep budget cuts and extreme austerity measures. However, as the OECD's education expert Andreas Schleicher has noted, "for every Euro invested in attaining high-skilled qualifications, tax-payers get even more money back through economic growth".

Southern Europe includes: Italy, Spain, Portugal, Greece, Malta and Cyprus.

Northern Europe includes: Germany, France, United Kingdom, The Netherlands, Belgium, Sweden, Denmark, Finland, Ireland and Luxembourg.

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FrankCanada 29/12/2011 5:43 pm

Northern Italy is one of the most skilled areas in the world. Your so called "Northern Europe" which is a grouping of -barbarian want to be civilized- countries who are heading the fat American walmart way. I'd rather be unskilled and build Ferrari cars, then skilled & working at Ikea. What a horrible article. Northern Europe is becoming delusional like America. Your skills are leading you down. German cars are not that good, Belgian & Danish ones are worse. Is Scandanavia even European?


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