Level 3 – why is progress so slow? Hilary Steedman Centre for Economic Performance London School of Economics and Political Science

Level 3 – why it matters OECD claims that Level 3 is the minimum required for productive labour market participation in globalised post-industrial economies Research on UK labour market shows that wage returns to qualifications below Level 3 are negligible and sometimes negative

Government targets for how near in 2004? By age 19 85% at Level 2 or above By age 19 75% to achieve Level 2 in communication, numeracy and IT By age 21 60% to achieve Level 3 or above

International comparisons – a look at progress since 1994 The countries chosen for comparison are France, Germany, Singapore and the US France, Germany and the US all have higher productivity levels per hour worked than the UK Singapore is an ‘Asian tiger’ with very rapid economic growth and GDP per worker close to European levels Since we know that skills are an important part of the explanation of productivity levels and growth, these comparisons help us to understand where we may need to improve

This presentation draws upon research papers prepared at the Centre for Economic Performance at the London School of Economics as part of the Skills for All Research Programme These and other papers in the programme are available at International Comparisons of Qualifications: Skills Audit Update DfES Research Report No. 548 Using Pseudo Cohorts to Track Changes in the Qualifications of National Populations DfES Research Report No. 621 available at

Proportions of year olds at Level 2 or higher Source: International Comparisons of Qualifications: Skills Audit Update

The race is not always to the fastest Other countries, particularly Germany, had relatively modest qualification levels at because their young people take longer to gain a qualification By contrast, in the UK, our qualification rates, particularly at Level 3 and above, improve very little after young people reach the age of 21. This puts us well behind other countries when we look at older age groups After age 30 few countries achieve much growth – the UK achieves slightly more than France and Germany but not enough to catch up

Proportions of cohorts born at Level 2 or higher Source: Using Pseudo Cohorts to Track Changes in the Qualifications of National Populations

Proportions of cohorts born at Level 3 or higher Source: Using Pseudo Cohorts to Track Changes in the Qualifications of National Populations

Population aged by level and type of qualification held Level 2+ Level 3+ Source: International Comparisons of Qualifications: Skills Audit Update

Labour market value of Level 3 vocational qualifications We now look at how a Level 3 qualification affects the wages of individuals who also follow an apprenticeship training – in particular whether the investment made in gaining a Level 3 award by an individual offers on average a worthwhile financial return Research quoted is:The Returns to Apprenticeship Training Author(s): Steven McIntosh (CEP) Full text available in the form of a free pdf document at ault.asp ault.asp

Wage Returns to Apprenticeship, NVQ 3 Qualifications and a Combination of the Two, Males,

Labour market value of Level 3 vocational qualifications Our research also investigated the employment probabilities of the 20 per cent of young people who claim they left school with no qualifications the relevant paper is The Impact of Vocational Qualifications on the Labour Market Outcomes of Low-Achieving School- Leavers Steven McIntosh (CEP) Full text available in the form of a free pdf document at ault.asp ault.asp

Subsequent Qualification Acquisition by Level of School Attainment, Males and Females Aged 22-29, 2002

Policy implications How can achievement rates for qualifications at Levels 2 and 3 in post-16 education and training be improved - participation is not enough? How can we get the message across to young people that there are big rewards to vocational Level 3 - and that it keeps options for further career development open? How can numbers gaining Level 3 qualifications through apprenticeship and in other vocational courses – in particular the new Specialised Diploma be increased? What can be done to encourage those in work to gain Level 3 qualifications in the workplace? What can be done to encourage young people to take advantage of finance and facilities available to young people to continue working towards a Level 3 qualification after the age of 21?