Does higher education matter?. Alison Wolf King ’ s College London. The European dilemma. Slowing growth rates High costs of a welfare state looking increasingly unsustainable Structural unemployment especially among specific social groups and regions.
Does higher education matter?
King’s College London
The Lisbon StrategyAiming for a ‘knowledge society’
Focus on educational attainment and especially on years of schooling/percentage qualified at ‘high’ levels. This was not a success! – can we understand why and how to do better?
Based on wage returns to current qualifications, extrapolated
But also on an underlying theory of what creates growth
‘A one percentage point increase in the number of workers with higher education qualifications raises GDP by 0.5%.’
UK Secretary of State for Education
23 May 2002
Average ‘returns’ vary greatly between countries.
They are much lower in Scandinavian countries, with more compressed income distributions.
But they remain the main economic justification advanced for expanding higher education.
Virtuous Circle: Skills
Q = total real output
K = total real capital stock
L = total labour force employed
A = total land in use
t = time
So if your labour force is not, or not just, bigger but also better, then a larger real output will presumably follow automatically
Maximizing investment in physical capital is not a sure-fire way to maximize or indeed generate growthi
So what is going on?
Sorting and selection as well as education
As more and more people finish secondary school, enter tertiary education, graduate from university, and gain postgraduate degrees, getting more education still makes sense for individuals. That is because it is an increasingly important ‘positional good’.
Employers’ view of where the formally qualified are to be found: 1970
Employers’ perceptions of the labour market: 2050?
Is it really plausible to suppose that increasing the proportion of graduates will automatically boost growth rates or end youth unemployment?
European countries have had far lower rates of youth unemployment in the past, when educational achievement was much lower.
Within countries, regional differences cannot be explained by education or qualification rates: in every case, within a region, the more highly educated you are, the more likely you are to be employed. But for a given qualification level, rates vary hugely between regions.
It is impossible to maintain very high quality in all institutions of a mass system.
The top universities in the world are all, to a greater or lesser degree – and mostly to a greater – found in systems which are stratified and highly selective.