1. OECD Skills Strategy Translating better skills into better economic and social outcomes Israel Accession Seminar 22-23 November 2011 Deborah Roseveare

2. 2 Skills matter for individuals  because skills have an increasing impact on labour market outcomes and social participation for economies  because failure to ensure a good skills match has:  short- term consequences (skills shortages)  longer-term effects on:  economic growth  equality of opportunities

3. 3 Better skills do not automatically translate into higher incomes and higher productivity Success with converting skills into jobs, growth and social outcomes depends on whether  we know what skills matter and drive outcomes  the right mix of skills is being taught and learned in effective, equitable and efficient ways  labour markets and societies fully utilise skills  governments build effective skills systems and strong coalitions with the social partners to find sustainable approaches to who should pay for what, when and where

4. 4 The world has changed  A dramatic expansion in higher education  Younger cohorts are more highly educated  Geographical distribution has shifted towards China Age groupTertiary qualified aged 25-34 years81 million aged 55-64 years39 million %25-34 years55-64 years United States35.820.5 Japan12.410.9 China 6.918.3

5. Many systems have done well in getting more people to higher qualifications But qualifications are not the same as skills... …because we continue to learn after obtaining a degree… …and because we lose skills that we do not use

6. OECD Skills Strategy  Integrates work on skills across the Organisation  Supports countries in developing better skills policies for economic growth and social inclusion  Defines three key areas of focus:  developing and maintaining the stock of skills  optimising the productive use of a population’s skills  strengthening skills systems

8. 8 Developing and maintaining stock of skills

9. 9 Producing an appropriate mix of skills  What are the drivers of current and future demand of skills/competencies?  Which instruments ensure responsiveness of education provision to labour market demand?  Which competencies should be developed?  How can access to education and training throughout lifetime be optimised?  What is the impact of migration and international labour mobility on skills formation systems?

10. 10 Key findings on skills supply and demand  Labour demand characteristics more important than labour supply characteristics in explaining earnings differentials  Skills matter but only if they are required by the job  Extent of text-based processing tasks at work is among the strongest determinants of earnings and skill formation  Skill formation also depends on work tasks and work organisation

11. 11 Optimising use of skills Under-utilisation of skills  mismatch between workers’ skills and those demanded by the job  non-participation in the labour market  inefficient use in informal production Waste of resources invested to develop these skills … …and can lead to skill atrophy The crisis has exacerbated under-utilisation of skills... especially for some groups (e.g. youth)

12. 12 Skills shortages can also exist  technological shifts  demographically-driven demand (e.g. health care)  long training pipelines Economic output lost if:  employers can’t hire people with the skills they need  employees cannot perform the tasks expected of them.....and incentives to develop missing skills are weak → global competition for talent and to fill shortages

13. 13 Low-equilibrium skills outcomes can occur low supply of skills matching low demand for skills  lower incomes  lower productivity  slower growth Most often occurs in:  rural areas  countries where mobility between regions is limited

14. 14 Optimising use of skills  Which measures help optimise the utilisation of skills on the job?  How can workforce participation be boosted?  Which tools facilitate the recognition of skills?  How can transparency of skills systems be ensured (role of assessment and qualifications frameworks)?  What information is necessary to facilitate matching of skills (e.g. career guidance)?

15. Strengthening skills systems

16. 16 Strengthening skills systems  How to achieve a coordinated whole of government approach?  What is the role of different agents including social partners?  Who should pay for what, when and how?  What are good models of policy evaluation to ensure efficiency/continuity of skills policies?  Which is the right level of intervention (regional and local dimension)?

17. 17 Local Skills Strategies (‘ecosystems’)

18. 18 Thank you! Ministerial Council Meeting 23-24 May 2012