Milano, Fondazione Feltrinelli, 13 Marzo 2015

1. Future of Skills in Europe:
Convergence or Polarisation?
Ilaria Maselli
CEPS
Milano, Fondazione Feltrinelli
13 Marzo 2015

2. In this presentation
• Why not enough graduates from
STEM disciplines?
• Is job polarisation happening in
Europe?
• What does it mean to be a low-skilled?
• What happens when higher education
is extended to the masses?

3. What can we learn from the
universalisation of secondary educ?
• Expansion lower for the leaders (SE,
UK)
• Faster for the laggards
• As enrollment exceeds 80% =>
demand for educ differentiates
• + value of different degrees not the
same (liceo vs. istituto tecnico)

4. And for tertiary educ? I
• Does it make sense to
speak about returns from
tertiary education in
general when more and
more enroll into higher
educ?
• Need to take into account
the investment (actual +
opportunity cost –
hours/years)
• Need to differentiate by
discipline

5. What we do practically
• Earnings 5 yrs after graduation –
• cost of education, discounted
= actual cost of educ + opportunity cost –
hours worked

6. Results (1): in absolute numbers - F
-547 €
4,728 €
-1,189 €
9,740 €
-2,000 €
0 €
2,000 €
4,000 €
6,000 €
8,000 €
10,000 €
12,000 €
Educ & Hum/art Social s., business,
law
Stem Health & Related
Services
10,277 €
16,708 €
4,022 €
10,965 €
0 €
2,000 €
4,000 €
6,000 €
8,000 €
10,000 €
12,000 €
14,000 €
16,000 €
18,000 €
Educ & Hum/art Social s., business,
law
Stem Health & Related
Services
I
t
a
l
y
S
l
o
v
e
n
i
a
Source: Authors’ elaboration

7. Results (2): in absolute numbers - M
-9,981 €
10,146 €
2,025 €
14,786 €
-15,000 €
-10,000 €
-5,000 €
0 €
5,000 €
10,000 €
15,000 €
20,000 €
Educ & Hum/art Social s.,
business, law
Stem Health & Related
Services
7,920 €
19,307 €
15,414 €
14,458 €
5,000 €
7,000 €
9,000 €
11,000 €
13,000 €
15,000 €
17,000 €
19,000 €
Educ & Hum/art Social s.,
business, law
Stem Health & Related
Services
I
t
a
l
y
S
l
o
v
e
n
i
a
Source: Authors’ elaboration

8. Costs and Benefits Compared
Source: Authors’ elaboration

9. And for tertiary educ? II
• Cost of education matters: via hours
studied, hours worked, length of
studies
• STEM case in FR and IT
• and for women in general
• Worth studying social science and
medicine!

10. And for tertiary educ? II
• So….what to Study …Matters!
 Signaling power
 Within inequality – like with expansion of
secondary education
• A rational decision?
 Go to STEM only if wealthier and smarter
(or both)
 Policy-makers can play with incentives

11. …yet
• No need to worry of
high-skilled
unempl
67.0
70.0
72.5
75.1
78.1
80.1
60
65
70
75
80
85
2003 2013 2023
Activityrates
Activity Rates in 2023 - No Policy Scenario
50
55
60
65
70
75
80
85
10 15 20 25 30 35 40 45
ShareofISCED5-8
Employment rate
2007 2013
• Eventually over-
education BUT..

12. On the demand side
What job polarisation looks like in the EU

13. Why is that?
• Technology
• Globalisation
• Feminisation
of the LM

14. What does it mean to be a low-
skilled?
• Workers can BE low skilled (Isced 0-2)
• But also BECOME
– Technological change
– Job polasization
– Long-term unemployment
– Migration

15. Convergence or polarization?
• Net effect not clear
–Convergence between groups
(less low-skilled, more high-
skilled)
–Polarisation within groups (ex.
graduates)

16. Challenges for policy-making I
• What will the future look like?
• “I never make predictions, especially about the future”
Sam Goldwyn
=> challenge for policy-making = build resilient labour
market
– Early childhood education?

17. Challenges for policy-making II
• Il mistero italiano: migliori fattori di
produzione e crescita 0 !!!???
400
420
440
460
480
500
520
540
560
580
4 4.5 5 5.5 6 6.5 7 7.5 8 8.5
PISASCORE2012
EXPENDITURE ON EDUCATION, % OF GDP, 2011
Reading_M Math_M Reading_F Math_F
• Quality and
quantity of
education
– Weak
relationshi
p between
expenditur
e and
PIIAC
results!

18. Domanda
• 3 riforme attualmente in discussione
– Jobs act
– Istruzione
– Pubblico impiego
• Come si configurano rispetto a questi
trend?