Transcript No Slide Title

European Commission
Directorate General for Enterprise and Industry
Education and the Lisbon Strategy
for growth and jobs
Gert Jan Koopman
Symposium on the future perspectives of European education
and training for growth, jobs and social cohesion
Brussels, 19 June 2007
Set-up of the presentation
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Returns to education
Skills and industrial competitiveness
Education and the Lisbon strategy
Policy discussion: Both quality and quantity
matter
Contribution of education and training to innovation and growth
Private returns to education
• Education is a good investment
• One additional year of schooling tends to
increase a worker’s wage by 5-15%
(Psacharopoulos and Patrinos, 2004)
• Skill-biased technological change may
further increase private returns in the future
Contribution of education and training to innovation and growth
Social returns to education
• Do we observe similar benefits at macro-level?
• Yes! When good data are used (e.g. from Cohen
and Soto)
• A 1 year increase in average educational
attainment of the workforce tends to increase
productivity by something like 7-10%
• Also some evidence that education levels increase
future productivity growth
Contribution of education and training to innovation and growth
The three faces of human capital
Human capital
• is a direct production factor
• is the major input into R&D and innovation
activities
• helps to build absorption capacity to
introduce new technologies
Contribution of education and training to innovation and growth
Skill-intensity of jobs rises in all sectors
Employment growth by skill level in EU-27, 2000-2005
5%
4%
Average growth p.a.
3%
2%
1%
0%
-1%
-2%
-3%
Primary and lower secondary
education
Upper secondary education
Skill level
Contribution of education and training to innovation and growth
Tertiary education
Labour productivity (1995=100) and skill
use in manufacturing, EUKLEMS data
1980
1990
2000
8
6
4
2
1980
1990
2000
2010
time
Productivity
Low skilled
2010
25
60
30
80
35
40
45
100 120
High skilled
40
Productivity
20
10
1980
Share of low skilled workers
30
40
150
100
Productivity
Productivity
High skilled
50
1970
2000
time
time
Productivity
1990
Share of high skilled workers
100 120
80
60
40
1970
2010
1970
1980
1990
2000
2010
time
Productivity
Low skilled
Share of low skilled workers
1970
Productivity
20
50
10
15
100
Productivity
150
25
Germany
Share of high skilled workers
USA
Revealed comparative advantage in the EU
High
3.0
2.5
2.0
1.5
1.0
0.5
Low
0.0
Low-intermediate
Contribution of education and training to innovation and growth
High-intermediate
Skill-upgrading and employment shifts
between sectors
A recent study commissioned by DG ENTR
shows that skill-upgrading (i.e. changes in
the skill composition within industrial
branches) contributes more to changing
demand for higher- vs. lower-skilled people
than shifts of workers across sectors or
industries
Contribution of education and training to innovation and growth
Education and the Lisbon strategy
“Europe needs to invest more and more
effectively in human capital in order to
improve access to employment for all age
groups, to raise productivity levels […], and
to build a workforce that can adapt to
change”
Employment in Europe 2006
Contribution of education and training to innovation and growth
Education targets within Lisbon strategy
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reduce early school leaving
increase upper secondary school completion
improve reading literacy
increase participation in life long learning
increase the number of university graduates
in mathematics, science and technology
Contribution of education and training to innovation and growth
What would reaching these targets bring us?
• Gelauff and Lejour (CPB) calculate that
reaching these skill targets would increase
GDP in the EU by about 0.5%
• But many Member States need to increase
their effort if the EU is to reach its
education targets
Contribution of education and training to innovation and growth
Policy discussion: both quality and
quantity matter
• When more people stay longer at school, the
labour force decreases which slows down GDP
growth in the short and medium term
• Improving educational quality can be less costly,
but also very effective as Wößmann and Hanushek
show
• Should advanced economies like in the EU put
more resources into higher education
(Vandenbussche-Aghion-Meghir) or are early
childhood interventions most effective
(Heckman)?
Contribution of education and training to innovation and growth