Exploring school-to-work transitions Alison Wolf King’s College London

Today’s World Huge expansion in education – in the developed world, full-time to 18 the norm, in developed and developing, very rapid growth in higher education Major changes in structure of labour market In most developed countries, disappearance of the youth labour market

Disappearance of the youth labour market for year olds Recent in the UK which maintained teenage employment at high levels longer than most other European countries. Long-standing in mainland Western Europe.

Large growth in UK enrolments reflects disappearance of youth labour market, and also low apprenticeship numbers

Part-time education shrinks among the young

Structurally high unemployment for year olds More recent, potentially more amenable to policy interventions but also highly damaging to those involved

Today, the UK is quite typical of developed economies in a number of key ways. Problems of transition are general and quite intractable.

Relative unemployment of young adults: 2009 Ratio of the unemployment rate of year-olds to those of adults (aged 25-64). (OECD Stat Extracts,

Scant reading skills (% 15- year-olds)

HE graduates (% age )

STEM (% of all students HE)

Unemployment rate (age 15-24)

Germany is the best-known ‘positive’ outlier – although they too have labour market challenges.

Unemployment according to level of qualification

QualificationEmployment in low paid work (%) Overallmalefemale Overall No qualification IVET Further training Higher education Transition into low paid work Source: IAB panel study, 2011 Note: OECD definition of low paid work (wages below two-thirds of median income)

New transition patterns in higher education Bachelor degrees ‘overloaded’: do not leave students opportunities to – develop practical skills – develop language skills – gain intercultural experience – develop analytical and problem-solving skills in professional area Masters degrees as labour market transition currency Problems with selective access to Masters degrees

Income according to degree type Annual income in first job after graduation (before tax) Bachelor degrees tradition al 1 st degrees University27,70037,500 Fachochschule33,65037,250 Source: Rehn et al., 2011

The Background Economic change, education and transitions

The ‘hourglass economy’ Post-war, huge increase in professional, managerial and technical jobs. Growth has slowed enormously. Huge productivity rises in manufacturing and services have squeezed the number of skilled jobs in manual and white- collar middle ranks Big increase in numbers of low-paid service job, which require soft rather than technical skills However, these changes, while real, are ongoing, and do not particularly impact on the young rather than on older workers

Manufacturing as a share of GDP

The fastest-growing – and the largest growth

The vast majority get jobs, BUT In some areas, unemployment rates are twice as high as national as national averages Many jobs are short term – a lot of ‘churning’ Most ‘NEETS’ have gone in and out of short- term employment Unemployment scars permanently in many cases ‘High-quality’ progression routes are not available to many young people

Formal education is increasingly seen as vital for life-chances, not just as a source of skills but as a gateway into the upper parts of the labour market. Employers may complain about the quality of education (and do, everywhere). But they use it, constantly, as a screening device and a ranking device.

High-quality access routes (1): higher education Application rates have not been affected permanently by fees Have stabilised since 2010 in England, Scotland and Wales and even though England has highest fees, also has highest application rate (43%) Return to a degree has also remained high. Completion rates are at top end for OECD

High quality access routes (2): apprenticeship Near-demolition of traditional high-quality apprenticeship route, but where survives, remains highly desired and shows high returns Funding + targets regime (established by successive governments) resulted in a growing proportion of so-called apprenticeships being given to older employees. Decreasing proportion at ‘level 3’ especially for young people. Huge excess demand for good placements

Current apprenticeship reform of critical importance But success not guaranteed – trying to recreate demolished institutions is hard

Returns to qualifications Vocational awards ‘deliver’ as part of apprenticeship: most lower-level awards delivered in education or by private training providers do not. Less qualified young people, and those on active labour market schemes (eg Work Programme), have been chanelled into programmes which award these low-status awards with no progression routes/wage returns Pre-18, recent reforms have changed the funding system, but post-18, still payment-by-qualification-awarded: training providers incentivised to offer easy awards and ensure 100% success on internally assessed qualifications.

Forthcoming and ongoing reforms ‘Study programmes’ for year olds in full time education which prioritise work experience English and maths for all lower-achieving year olds ‘Traineeships’, subsidising work experience Wage subsidies Apprenticeship reform (barely started yet) Qualification reform for year olds (general academic; applied general; technical (occupational) – ‘Tech Bacc’, currently a level 3 technical/occupation + level 3 maths and extended project

The prognosis Work experience placements – pilots encouraging Wage subsidies – a failure (as has often been the case with similar initiatives) Qualification reform – not yet clear English and Maths – better late than never Apprenticeship reform – too early to tell but both key and difficult

Workplace experience is critical Saturday jobs Substantial work experience Traineeships Apprenticeships