1. 1 Transparency in human capital policy – a challenge for Europe Erik Mellander, IFAU Seminar, Stockholm, December 12, 2006

2. 2 Connections to growth and transparency Modern growth theory points to education as one of the most important drivers of economic growth. Human capital accumulation is an extended process, requiring long term planning Well-functioning educational policies have to be transparent, so as to minimize investment uncertainty for students, schools/universities and employers.

3. 3 What we mean by transparency in this context: Clarity and consistency with respect to the formulation of educational policy. Policy consequences should be measurable. Policy implemention should be followed up regularly and assessed both with respect to individual aspects and as a whole.

4. 4 Wherein lies the challenge? On a general level: 1.The number of policy goals is large and there are goals of different kinds (targets & reference levels). 2.The European education policy is based on non- binding agreements specifying what to do, but leaving to the member states how to do it. 3.Given 1. and 2., (quantative) follow-up analyses are essential. Only rudimentary assessments this far.

5. 5 Wherein lies the challenge? cont. On a specific level: I.Create basic education that provides good opportunities for everyone. II.Create higher education and research that can match the US universities. III. Create good conditions for life-long learning. IV. Ascertain a efficient allocation of resources.

6. 6 Indicators of I: Equal opportunities Target 2.3: between school variation in literacy among 15-year olds in 2000. Sweden & Finland top in the EU, Iceland in OECD. [2003: Luxemburg, Canada, Australia, China passing Sweden.] Reference level 1: share of 18-24 year-olds with at most compulsory schooling in 2002. Slovenia, Cyprus best in EU, Sweden only at the required level. [2006: Cyprus falling, Sweden far behind.]

7. 7 Indicators of II: Excellent higher educ & research Target 1.4: the change during 2000-2002 in the share of university graduates who have studied science, technology or mathematics. Slovakia and Spain best in OECD. [Unchanged 2000-2003] Reference level 2: change during 2000-2002 in the number of graduates in science, technology or mathematics. Slovakia, Polen at the top. [Unchanged 2000-2003.]

8. 8 Indicators of III: Life-long learning Target 2.1: proportion of 25-64 year-olds that participated in training 2003. Sweden at the top in OECD, followed by Switzer- land, Iceland, UK. [Denmark coming up 2005.] Reference level 5: 12.5 % ”floor” on Target 2.1. Six EU countries above the floor in 2003: Sweden, UK, Denmark, Finland, Netherlands, Slovenia. [In 2005 Austria added to the list.]

9. 9 Indicator of IV: Efficient allocation of resources Target 1.5: share of students attending long university education (≥ 3 years) who in 2000 received their degree within the stipulated time. Japan and Turkey at the top in the OECD, closely followed by Ireland and UK, best in the EU. [In 2004, Turkey falling behind, while Croatia and Greece surpass UK.]

10. 10 In summary… different countries do well on different objectives. A large number of objectives enables all countries to score high on some objectives, possible at the expense of others. There have been only weak attempts to ascertain that various objectives are consistent and no attempt – except ours – to create a measure of overall performance. According to this measure, Sweden at the top in the EU around 2002.

11. 11 This far …. the process makes one think of Alice in Wonderland: ”Cheshire Puss, would you tell me, please, which way I should go from here?”, asked Alice. ”That depends a good deal on where you want to go to”, said the Cat. ”I don’t much care where – ”, said Alice. ”Then it doesn’t matter which way you go”, said the Cat.

12. 12 From now on …. the politicians will have to focus on a manageable number of consistent objectives and start running (really fast). Otherwise they won’t stand a chance of reaching the goal of becoming ”the most competitive and dynamic knowledge-based economy in the world” by 2010. Hopefully, the pace of the politicians will be hastened by follow-up analysts and journalists chasing them.