IFS Conference, Cambridge 2nd and 3rd April Andy Westwood

Why have an adult skills policy? Contribution to wage and employment returns for adults gaining new skills Contribution to firm and national productivity increases Improved life chances Increase in household income Increased educational performance and life chances of children Other social effects – crime, health etc Population stock and flows

Criticisms of Adult Skills Policy? Qualification focus Deadweight Poor returns to qualifications Not enough ‘teaching or learning’ Less effective than interventions for young people

Adult Skills Policy since 1997 The Learning Age In Demand ‘Adult Skills’ Cabinet Office Workforce Development project 2001 Skills Strategy 2003 Foster Review 2005 Leitch Review 2006 Creation of DIUS/DCSF 2007

Why have an adult skills policy? International comparisons of qualification profiles

Where does UK stand internationally? Population with at least upper secondary education, 2003

Returns to Qualifications - employment

Returns to Qualifications - wages

Returns to basic skills - employment

Returns to qualifications – wages Wage premiums from gaining qualifications Men Women Academic qualifications O level/higher GCSEs Vocational qualification Level 2 NVQs Not significant NVQ2 via employer training 21% 19% 7% 6%

Why qualifications? Best proxy for skills? Easiest to measure - targets? Market failures? Market signals? Transferable skills? But are qualifications perfect – can they be better ? System should evolve – unitisation, new providers (employers, colleges)

Key policies for adults Entitlements at Basic Skills and Levels 2/3 Train to Gain Apprenticeships (19+ and 25+) Skills for Life Skills Accounts and AACS Right to Request Informal Adult Learning Qualification reform

Train to Gain 89 per cent of new learners said their training gave them skills that would help with current and future jobs and employers; 45 per cent of new learners reported receiving a pay rise which they attributed to their training; 48 per cent of learners in a longitudinal group reported increased promotion prospects.

How effective is adult skills policy? Developing learner choices? Workplace focus (and deadweight)? Integration with employment system? Information and advice? Improving qualification system? Understanding the context of skills investment and utilisation?