This presentation discusses trends in skills and education in Europe, including job polarization, the value of different college degrees, and challenges for policymaking. It finds that while job polarization is occurring, creating more high-skilled and low-skilled jobs, the overall effect on inequality is unclear as education levels converge across groups. STEM fields tend to have the highest returns on investment in education, though social sciences and medicine also provide positive returns. Effective policymaking requires building resilient education and labor systems able to adapt to an uncertain future. Current reforms in Italy regarding jobs, education, and public employment aim to respond to these trends.

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?