In their September 2012 Global Employment Outlook, the International Labour Organization (ILO) drew particular attention to the plight of the young worker worldwide.  They project that the global youth unemployment rate (youth being defined as between the ages of 15 and 24) will climb from 12.7 percent in 2012 to 12.9 percent by 2017.  This is in contrast to the overall unemployment rate, which is expected to remain steady worldwide at 6 percent between 2012 and 2017.  The projected rates of youth unemployment vary, of course, by region.  In East Asia, the youth unemployment rate is projected to increase to 10.4 percent by 2017, up from 9.5 percent, while in the developed economies and the European Union, the rate is actually projected to decline from 17.5 percent in 2012 to 15.6 percent in 2017.  However, the latter figure is not actually cause for celebration – the report notes this is “principally because discouraged young people are withdrawing from the labor market and not because of stronger hiring activity among youngsters.”

We turn to additional ILO data to see what the picture looks like in some of the countries with top-performing education systems, to see if the strength of the primary and secondary systems mitigates to some degree the proportion of young people who are struggling to find work (Figure 1).  The results are somewhat surprising.  Finland, widely acknowledged as having one of the best primary and secondary education systems in the world, also has the highest unemployment rate for people aged 15 to 19 years, and one of the highest unemployment rates for people aged 20 to 24 according to the ILO data.  Singapore and the Netherlands, which have strongly integrated vocational and technical pathways available to students before the age of 18, on the other hand (and unsurprisingly), have quite low youth unemployment rates.

Figure 1

But before jumping to conclusions, it is important to dig deeper into how countries define youth unemployment, because this in and of itself can impact how well a country appears to be doing in terms of moving young people into the workforce.  For the chart above, the ILO definition of “unemployed” included people who were not in paid employment, were available for employment, and were seeking employment.  The ILO points out that these measures are difficult to compare across countries because education systems vary widely, and in some countries a young person may be considered “employed,” for example, if they are engaging in a vocational training program part-time.  In another country, the labor force may be considered as including only the youth who have dropped out of secondary school or who have earned a secondary degree.  This may result in inflated rates of “unemployment” in some countries, for example, Nordic countries, that have more modular vocational and post-secondary education programs and other strong supports for young people, resulting in young people pursuing a combination of part-time training, employment, or other activities such as international travel before settling into a career.

Fortunately, there is another international measure that allows us to compare the proportion of young people who are struggling to enter the workforce or the education sector.  That is the percent of youth not in employment, education or training, often abbreviated as NEET.  The OECD provides data on the percent of NEET youth in most of its member countries; below, we have again shown the data for the top performers (Figure 2).  The chart provides information for three different categories of young people: youth who are unemployed (that is, looking for work), and not in education or training; youth who are inactive (that is, not looking for work), and not in education or training; and the NEET rate, which includes youth who are either unemployed or inactive, and not in education or training.  The NEET rate is represented by the total length of the bar on the chart, as it is a combination of the two other measures.

Figure 2

The Netherlands, which has one of the lowest rates of youth unemployment by ILO measures, also has a very low NEET rate.  Notably, just 1.5 percent of youth in the Netherlands who are not in education or training and are actively seeking work are unable to find jobs.  This is just over 25 percent of the overall OECD rate of 5.8 percent, and significantly smaller than the EU27 (European Union) rate of 6.6 percent.  Denmark and Finland, two Nordic countries which, by overall youth unemployment measures, do not look particularly good, also have very low NEET rates.  These low rates are likely due to the fact that these countries, and particularly the Netherlands and Denmark, have very strong school-to-work pipelines, with multiple pathways for all types of students.  Students in these countries have access to various workplace learning experiences and apprenticeships, as well as a close relationship between industry and these training programs.  On the other end of the spectrum, the United States, New Zealand and the United Kingdom all have high NEET rates in addition to their high youth unemployment rates, suggesting that job training programs or pathways into the workforce in these countries are lacking.

One concern, however, is the possibility of a growing connection between youth unemployment rates and youth NEET rates.  The ILO points out in their Global Employment Outlook that as new economic sectors grow and old sectors decline, people who were either employed in or being trained for jobs in the old sectors will face the loss of these jobs with a sense of discouragement, meaning that NEET rates will rise following the rise in unemployment rates.  This is why it is so important to have education connected to current workplace skill requirements, and particularly, to ensure that vocational and technical education programs are linked closely to industry, so that youth are being prepared for the jobs of the future.

The OECD’s A Skills Beyond School Review series is currently also being conducted in Austria, Egypt, Germany, Israel, the Netherlands, Switzerland, the United Kingdom, England and the United States with case studies of Florida, Maryland, and Washington state.  Each review follows a standard methodology with the selected country preparing a background report and the OECD team making two visits to the country to discuss important issues with a number of stakeholders.  In addition to this work, the OECD is preparing a range of analytical studies on issues such as access and career guidance and counseling.  The complete body of work will conclude with a comparative report offering key policy messages for all OECD countries expected to be issued at the end of 2012.

In Denmark, postsecondary VET education takes the form of two different programs ⎯ academy profession (AP) degree programs and professional bachelor degree programs.  AP programs are short-cycle higher education programs that typically take about two-years to complete.  Admission is based on qualifications comparable to a Danish high school leaving certificate.  The AP program provides students with analytical and professional skills relevant for employment in businesses or industries.  The program also qualifies graduates for further studies within the same field at the university level.  Along with class work, a minimum three-month work placement and the submission of a project paper are required for graduation.  Most programs are offered at academies of professional higher education, which are independent organizations, separate from universities.  However current legislation outlines that prior to 2015, each academy should decide if they want to remain independent, in which case they will then have to transfer their bachelor programs to a higher education institution or merge with a higher education institution.  As of 2009, almost 19,000 students were registered in AP programs, which is a substantial increase from 2000 when nearly 13,000 students were enrolled.

Professional bachelor programs in Denmark require three to four and half years of study and are equivalent to a university bachelor degree with a stronger focus on professional practice.  The majority of the program takes place at a higher education institution and prepares students with theoretical knowledge and an understanding of how to apply theory to professional practice.  Along with all required coursework, a minimum six-month work placement and the submission of a project paper are required for graduation.  Admission to these programs is based on student performance on high school leaving examinations and other factors such as minimum grades.

A Skills Beyond School Review of Denmark identifies a number of strengths for this country’s postsecondary VET system including the mandatory, well-structured workplace training that outlines clear learning goals.  They also note Denmark’s effective policies to incentivize institutions to help students stay in school through graduation such as the school funding system, which funds institutions according to program completion numbers.  Additional laws are in place to encourage students to stay in school, for example, education institutions are required to refer students that wish to dropout to regional guidance centers and municipalities are legally required to make contact with and offer guidance to young people that are unemployed and not enrolled in school at least twice a year up until age 19.  Another impressive element of Denmark’s VET system is a parallel adult education system.  Over 40 percent of adults participate in formal and/or non-formal education each year and can expect to receive 1,794 hours of instruction during their working life, which is one of the highest levels across the OECD.  Lastly the OECD points out that both the employers and the employees are very engaged in planning, designing and steering the VET system.

In South Korea, postsecondary VET accounts for 30 percent of higher education enrollment and is provided by both junior colleges and polytechnics.  The junior colleges enroll over 50 times more students than polytechnics.  However their admission processes are not very selective and some institutions can struggle to fill their rosters.  Ninety-five percent of junior colleges are private, and government funding accounts for less than 10 percent of total junior college income.  Completion of these programs typically takes two years although three-year and four-year degrees are offered in a number of fields such as engineering.  While the difference in wages between junior college and high school graduates has been decreasing over the past 30 years, there is still a benefit in terms of employment.  The polytechnic schools, on the other hand, are public and access is more selective.  These schools typically offer one- and two-year degrees in technical fields such as electronics, mechanical engineering or telecommunications.  In addition, polytechnics offer shorter programs for employed and unemployed individuals as well as retired military serviceman.  A strength of South Korea’s VET system is the ease with which students can apply credits from VET programs toward a university degree.  Currently about half of junior college graduates continue in the university program.  This can present challenges as the vocational programs and university programs do not align their programs of study, so many junior college graduates are unprepared for the university-level work.

A Skills Beyond School Review of Korea finds a skills mismatch between VET options and labor market needs.  The reviewers make a number of suggestions on this front: convene a national body of key stakeholder groups, including businesses, to lead the development and regular updating of standards and qualifications based on the skill demands in the South Korean economy and make recommendations to ensure students are trained in these important areas.  The reviewers also suggest making transparent standards for VET programs through the development of common, national standards and assessments.  Another recommendation is to improve quality assurance in junior colleges by basing funding allocations and accreditation status on the quality of the training provided.  Lastly, the reviewers suggest that South Korea work to improve career information available to prospective students and that junior colleges make workplace training mandatory.  It is important to note that most of the OECD’s recommendations are focused on the junior colleges, which unlike the polytechnics do not have a strong link to workforce priorities.  The point of building a national framework for VET is crucial so all programs meet the same standards and the value of the each qualification or degree is clear to prospective employers as well as students.

In both of these country reports, workplace training is stressed as a key part of students’ vocational education experiences; not only does it benefit students but it can also serve to substantially enhance relationships between VET providers and employers.  Other key elements of high-performing systems seem to be the high status of these programs and the flexibility for VET students to apply what they have learned and move on to university qualifications.  The quality of the teaching staff is also not to be overlooked.  High quality vocational education and training requires instructors with solid pedagogical skills as well as expertise in the field they are teaching.  This means teachers must have professional development opportunities available within the system.

The Credibility and Value of International Education and Training Qualifications

The European Centre for the Development of Vocational Training (CEDEFOP), the European Union’s reference centre for vocational education and training, released a new report on International Qualifications in June 2012.  The report looks at a variety of education and training qualifications, diplomas, certificates and licenses that are awarded outside the jurisdiction of any one country.  The authors try to develop a typology for these qualifications and analyze their credibility and value in the labor market.  The qualifications they consider are as diverse as: a certificate for seafarers, the Association of Montessori International primary certificate, Cisco certifications and airplane pilot licenses.  Their typology includes five categories for describing each: purpose (what the qualification is for); type (how complete and how durable the qualification is); coverage (where the qualification can be used); competent body (who awards the qualification); and currency value (what the qualification can be exchanged into).  They look at the case of Welding in more detail where cooperation among different bodies has yielded defacto international standards, driven by the need for safety and quality in this occupation.  The report suggests that while national qualifications are becoming easier to evaluate for quality because of the development of national qualifications frameworks, international qualifications are becoming harder to value because of the lack of any international organizing structure and the new need to align them with national frameworks.  The authors believe that international qualifications will only maintain relevance with the transparency that comes from an overall system for cataloguing and monitoring the quality of these qualifications.

Many countries, of course, have fully elaborated systems of occupational skills standards.  Some have systems less robust and some, like the United States, still have no national occupational skill standards framework.  Those that do have been working to find ways to develop cross walks among their standards systems to make it possible for people certified in one system to have their skills recognized in others.  As the global economy continues to globalize, the pressures to rationalize these systems will increase.   As the pace of technological change increases and work organization changes as a consequence, it will be more and more challenging to make sure that skill standards systems lead and do not follow these changes.

How the Netherlands Successfully Support Child Well-Being 

In July 2012, Every Child Counts published The Netherlands Study: Learning from the Netherlands to improve outcomes for New Zealand’s children.  Every Child Counts is a collaboration of New Zealand-based nonprofits as well as UNICEF and Save the Children that was organized in 2004 as a watchdog for children’s advocacy in the country.  Rowe Davies Research, a New Zealand firm, prepared the report.

The authors were asked to analyze the policies in the Netherlands that contribute to its high levels of child well-being at relatively lower costs than many other OECD nations that achieve similarly high levels of child well-being.  The report notes that the programs in the Netherlands for children are more systemic and widespread than in New Zealand and that New Zealand is currently spending half of what the Netherlands spends on children overall, according to OECD numbers.

The report attributes the Netherlands success to nation-wide programs of support for parents and young children, including a targeted health service for all children from 0-19 delivered by local health centers that ensures preventative care and health education for all youth and also has a significant on-line support aspect; a broad system of free pre- and post-natal care for mothers that includes assistance with basic household chores that relate to the health of the mother and baby; a dramatic increase in childcare since the 2005 Dutch Childcare Act with parents, government and employers splitting the costs overall and subsidies available for lower-income parents; generous housing support for low-income parents with one in three Dutch citizens receiving some housing support; a means-tested childcare allowance and a mandatory 16-week paid parental leave policy; and a youth care agency in each locality to coordinate all youth services and provide a single point of contact.

Based on the lessons from the Netherlands, the report recommends that New Zealand consider the following investments:

• Expand parent support and education programs;
• Expand child care services;
• Develop services to deal with post-natal depression;
• Expand care before and afterschool for children whose parents work;
• Increase parental leave to 18 weeks and widen the eligibility to parents with less stable work histories; and
•   Increase the availability and quality of state funded housing for low-income parents, and add programming to housing to increase social mobility.

They also suggest some longer-term strategies:

• Adapting child digital files so that they can be used to store health information;
• Adopting national indicators of child wellbeing and monitoring new policies by how well they move the country towards these indicators; and
• Continuing dialogue with the Netherlands, as the two countries share many characteristics and are likely to learn from one another.

The report cautions that, in the face of global economic woes, the Netherlands is considering austerity measures that threaten to dismantle some elements of the system just described.  It also points to some of the ways that the Netherlands family and child services could be improved that echo issues in many other countries and systems: increasing professional development for family and child workers, encouraging more collaboration among agencies, better integrating funding streams.  The challenge will be to see how the Netherlands continues to develop and prioritizes investments in children in more difficult economic times.

Review of Funding for Schooling

Following the release in late 2010 of the PISA 2009 results, the Australian government, unhappy with how the nation stacked up against other high performing countries in Asia and Europe, commissioned a report to determine what changes, if any, were necessary in how schools in Australia are funded.  The Review of Funding for Schooling Final Report, delivered to Australia’s Prime Minister Julia Gillard last month, is the first comprehensive review of Australia’s school funding system in almost 40 years.

The focus was on funding because, although Australia has for years been among the top performers on the PISA assessments, it has not fared well on the OECD rankings for equity.  The commission’s remit was to find a way to make Australia’s funding for the schools more equitable.

Up until now, the states have had the main responsibility for funding the regular public schools, and their formulas for doing that have been quite different.  About half of the schools in Australia are private—mainly Catholic—schools. The federal government has been supplementing their funding, mostly in the form of funding for particular programs.  The result has been a crazy quilt funding pattern.

The Commission started from the position that a modern advanced industrial economy has to educate all children—not just some—to a much higher standard than was formerly thought either possible or necessary.  It costs more to educate some children to a high standard than others, the Commission observed, so it follows that a fair, equitable and effective funding system would have to find a way to put more funds behind students who cost more to bring them to a high standard than it does behind students who can be brought to the same high standards more easily.

That reasoning brought the Commission to propose a form of pupil-weighted funding for Australia, in which all students would receive the same base amount of foundation funding, and amounts would be added for each student answering to certain specified criteria, such as language status, socio-economic status and disability status.

As with all such systems, the state could, in theory, simply redistribute the money currently available, in which case, for every school that received more, there would be another that got less, or government could “level up,” so that no school loses anything, most schools get more money, everyone is happy, and the treasury goes bankrupt.

The Commission chose a middle course, proposing to increase total school funding by $5 billion.  But not all of that would come from the federal government.  Some would come from the states.  And there would be a complicated dance done in order to make sure that all students would be served by the same funding formula, with different amounts being contributed by the different states and by the private schools’ constituents.

Australia is, of course, not the first nation to come to these conclusions, nor would it be the first to implement such a plan.   A growing number of countries have led the way.  As elsewhere, the reaction has been swift and predictable.  Although the Commission is proposing to add $5 billion Australian to the pot, that is not enough to “level up,” so there would be winners and losers.  Predictably, the elite private schools are upset because they could potentially lose if this proposal succeeds.

The Commission report signals that the members were very much aware that redistributing school funding would not by itself solve the equity problem in Australia’s schools.  They realized that it would be no less important to ensure that any additional resources are used effectively.  They urged the government to move away from the creation of a plethora of government programs mandating particular kinds of changes in the schools, often for narrow purposes or constituencies, and toward giving schools clear goals and much more discretion in how they use the funds allocated to them for the achievement of those goals.

How Australia’s School Funding System Works
Under the current system, which the authors of the report feel “lacks coherence and transparency” and is “unnecessarily complex,” money is allocated to schools based on the school’s socio-economic status.  As in the United States, the Australian states and territories are primarily responsible for funding their school systems.  This funding is allocated in a variety of ways depending on the state; each has a formula that enables the state to determine how much money each school or system should receive; states also can determine whether – and how – this funding must be spent. The federal government is responsible for providing funding for things like capital improvements and major education initiatives, and, unlike most other countries, is also the primary funder of non-government schools.  When funding non-government schools, under the current system, the government does not take into account what schools charge for tuition or other revenue streams.

What the New Report Proposes
In the proposed system, the authors would put in place what they call the Schooling Resource Standard to be uniform across Australia.  School funding to meet this standard would be achieved through several separate funding streams.  These streams include per student funding, with differentiated amounts for primary and secondary students and “loading,” which is additional funding for students and schools based on socioeconomic status, school size and location, special needs, English language learners and indigenous students.  And finally, they include a funding stream for capital improvements.  Every government school would be funded to the Schooling Resource Standard plus any applicable loadings.  All non-government schools would be funded to the Schooling Resource Standard as well, although in this case, the standard will be achieved through a combination of private and public funding.  Depending on the socioeconomic makeup of the students in each non-government school, the school would be expected to contribute between 10 and 80 percent of the standard, with the balance provided by the government, though the panel recommends that the minimum contribution per student be set at between 20 and 25 percent of the Schooling Resource Standard, excluding loadings, which will be fully publicly funded in all schools, government and non-government alike.

The federal government would be expected to bear about 30 percent of the overall $5 billion increase annually.  The central change that the new system would make is that the money would follow the student, not the school, which is expected to be a major step towards educational equity.

Public Reaction
As mentioned earlier, the proposal outlined in the panel’s final report has received mixed reactions in Australia.  Peter Garrett, the School Education Minister, has stated that the proposed model is not government policy, but has provided the states and territories with the modeling tool used in the report to enable them to test the model using current budgets.  The reform plan faces opposition from some state governments, concerned that the plan is too expensive, and from proponents of non-government schools, who feel that the reforms would mean that many of the elite non-government schools would lose funding and require greater outlays from private partners and parents.  While it is too early to tell if the report’s recommendations will be adopted in Australia, the report describes the education funding system in Australia today and provides a detailed approach to designing a weighted student funding system that may have implications for other countries interested in moving in this direction.

Other reports of note:

OECD (2012). Equity and Quality in Education: Supporting Disadvantaged Students and Schools. Spotlight Report: Netherlands. This report was released as part of the OECD’s Overcoming School Failure: Policies that Work project, which provides evidence from OECD countries on policies that effectively reduce school failure.  This spotlight report draws from the OECD’s study, Equity and Quality in Education: Supporting Disadvantaged Students and Schools, and provides a country overview of PISA scores, the degree to which students’ socio-economic background predicts student performance, and employment rates as related to degree attainment. The report examines some of the current issues and related school policies in the Netherlands including the country’s higher than average grade repetition rates, their policy that allows students to be tracked at 12-years old, their efforts to ensure equity in their school choice procedures, their school funding formula that is weighted for disadvantaged students and their strategies to prevent high school dropouts, improve low-performing schools, and increase parental engagement, particularly among migrant families. To prevent school failure, the report authors recommend using two parallel approaches: eliminating education policies and practices (such as grade repetition and early tracking) that hinder equity and targeting low-performing disadvantaged schools.

OECD (November 2011). Background Report for the Netherlands. This report is also part of the OECD’s Overcoming School Failure: Policies that Work project. It offers an overview of the Dutch approach for ensuring education equity, overcoming school failure and reducing drop out rates. The report describes that the number of high school dropouts in the Netherlands decreased from 71,000 in 2002 to 41,800 dropouts in 2009 and targets a 25,000 decrease in dropouts for 2016.  The report reviews the Netherlands’ education structure, governance system, and approach to fair and inclusive education practices and resourcing.  The last chapter provides an overview of Dutch educational policies including developing an ambitious learning culture; changing the amount, intensity and quality of learning time; learning from results and performance oriented cultures in schools; and improving teacher quality by, for example, developing more teachers to the master’s level.  The final chapter also analyzes the current and foreseeable causes of education failure (such as helping students overcome disadvantaged backgrounds) and reviews “Aanval op de uitval”, the Dutch dropout prevention program which is committed to activities to reduce the number of early leavers as well as systematic changes to prevent student failure.