Spain's 12 skills challenges
Developing its relevant skills
Mean performance, PISA 2012
Source: OECD (2013a), Education at a Glance 2013: OECD Indicators, http://dx.doi.org/10.1787/eag-2013-en.
1. Improving the skills of students in compulsory education: Spanish youth need strong skills for success in further learning, the economy and society. Spain has made a number of reforms, and is introducing further reforms, aimed at improving quality, equity and efficiency in secondary schools.These include introducing skills-based curricula and modernising vocational education and training (VET).
Early school leaving, grade repetition and late school completion remain high and costly despite the fact that more youth are now completing upper secondary education. In Spain, a quarter of students leave school early, a third repeats a grade, and almost a quarter completes school as much as 2 years later than the rest of their Spanish peers. All three rates are considerably higher than the OECD average. Grade repetition alone is estimated to cost an amount equivalent to almost 8% of the total expenditure on primary and secondary education. While a number of Spanish regions are performing at the level of peers in high performing OECD countries in reading, mathematics and science, theperformance of Spanish students overall is below the OECD average. Only few Spanish students are performing at the highest levels. Sustained effort is needed to improve quality, equity and efficiency in compulsory education.
2. Ensuring that tertiary students develop high quality and job-relevant skills: Tertiary attainment in Spain has grown rapidly and is now at the OECD average. In 2012, the share of Spanish 25-34 year-olds with tertiary education was almost 40% as compared with just under 20% among 55-64 year-olds. This 20-percentage point difference was surpassed in only six OECD countries.
However, too few tertiary graduates are developing the high levels of skill needed for success in the economy and society. While the skills of Spanish tertiary graduates are showing improvement over time, they still rank near the bottom of the OECD countries who took part in the Survey of Adult Skills (PIAAC). Furthermore, only around 12% of tertiary-educated adults perform at the highest level of proficiency in literacy, about half the OECD average. Higher levels of skills will be needed to power a knowledge-based economy and for individuals to thrive in their personal and professional lives. Many students are graduating from fields of study that are not well aligned with the needs of the labour market. Ensuring that Spain has the necessary skills to respond to rising skill needs and to boost economic growth in the future will require immediate efforts to improve the quality and relevance of skills and continued expansion of participation over the long term. This notwithstanding, the fact remains that many graduates today struggle to find a job.
3. Improving the skills of low-skilled adults: Close to ten million adults in Spain have either a low level of literacy or of numeracy. Roughly two-thirds of these low-skilled adults will still be in the labour market ten years from now and over one-third of them will still be working twenty years from now.
Low-skilled adults in Spain are less likely to participate in education and training than their more highly skilled Spanish counterparts and also their similarly skilled peers in other OECD countries. This is despite the fact that Spain has a relatively comprehensive and flexible adult education system, that adult participation in education has risen in recent years, and that recent reforms have aimed to make the professional training system more responsive to labour market needs. As the skill requirements of jobs continue to change and increase, more will need to be done to encourage and help low-skilled adults to upskill and reskill to keep their current jobs or find new ones.
Activating skills supply
NEET rates among youth
Percentage of population aged 15-24, Q4 2007-Q4 2013
Note: Countries are shown by descending order of the NEET rate in Q4 2013.
Source: OECD estimates based on national labour force surveys.
4. Removing regulatory and tax barriers to hiring and worker activation: Many working-age adults in Spain are not realising the full benefits of investments in their skills. In 2014, Spain had the second highest unemployment rate and third lowest employment rate in the OECD. And almost a quarter of workers in Spain are employed on temporary contracts, a share only exceeded by Chile and Poland among OECD countries. Youth and low skilled adults are particularly at risk of being hired on temporary contracts.
High rates of unemployment, low rates of employment and labour market duality have long been features of the Spanish labour market. Spain has introduced a large number of labour market reforms since 2012 to boost hiring and employment and decrease employers’ reliance on temporary contracts. Nonetheless, the labour market continues to be characterised by high unemployment and labour market duality. Further efforts are needed to ensure that labour market regulation and tax policies provide incentives, and not disincentives, to hire and work.
5. Reintegrating unemployed people through targeted activation strategies: Active labour market programmes are an important means of activating people who are inactive or unemployed and promoting employment. Following the economic crisis, the large increase in the number of jobseekers put considerable pressure on capacity of the public employment services (PES), especially given its comparatively small size. Enhancing the performance of PES is important for supporting the rapid reintegration of the unemployed and of the long term unemployed. Expenditures on active labour market programmes are not high compared to other OECD countries, particularly when considering the numbers of unemployed people in Spain. Focus on training should be reinforced, building on recent reforms to increase efficiency, targeting and relevance to labour market needs.
Increased monitoring and better enforcement of job search compliance and better targeting towards those most in need could support quicker returns to work. Removing, or mitigating, barriers to labour mobility together with improved labour market information and guidance support could also boost employment.
6. Improving the transition of youth from education to stable employment: Youth in Spain face difficulties in making smooth transitions from school to work. Youth unemployment and long-term unemployment rates rank amongst the highest in the OECD. The share of youth neither in employment, education nor training (NEET) (20%) also ranks near the top of the OECD, surpassed only in Mexico, Greece and Italy. Youth NEET are at risk of becoming long-term unemployed and more difficult to integrate in the future.
Helping more young people to find their first jobs will require, among other things, better performance of PES in assisting and orienting youth to make the transition into employment, in particular through early intervention tailored to individual needs. In addition, as many unemployed youth have low levels of education and skills, they will need training and further education.
Using skills effectively
Knowledge-based capital related workers, selected countries, 2012
Note: Workers contributing to R&D, design, software and database activities and to firms’ organisational knowhow account for between 13% and 28% of total employment in many OECD economies (total length of the bar). Of these workers, between 30% and 54% contribute to more than one type of KBC asset (bar “overlapping assets”).
Source: OECD (2013f) “Knowledge-based capital related workers, 2012”, in OECD, Science, Technology and Industry Scoreboard 2013: Innovation for Growth, http://dx.doi.org/10.1787/888932890618.
7. Making full use of skills in the workplace to strengthen productivity and competitiveness: Today, Spain is not making full use of the skills of its workforce. The use of skills in the workplace is only about average and many workers have skills that exceed the skills requirements of their jobs which places Spain second among OECD countries who participated in the Survey of Adult Skills (PIAAC). Despite having higher levels of skill on average, young workers are even less likely to use cognitive skills at work than their prime-age peers. Young workers in Spain are also less likely to use computers at work than their peers in other OECD countries surveyed. Workplaces in Spain rank poorly on a number of measures of the adoption of innovative workplace practices.
The comparatively low use of skills in the workplaces and low take up of innovative workplace practices implies a waste of talent that might otherwise be used to improve firm competiveness and productivity. Making full use of the skills of Spain’s workforce will require greater efforts to raise awareness among firms about the importance and means of making the effective and intensive use of skills in the workplace a central component of their business strategies.
8. Leveraging highly skilled individuals and universities to foster innovation and increase productivity and growth: Highly skilled workers, entrepreneurs and universities are central to a country’s innovation system. Spanish firms are less actively engaged in innovation activities than many of their foreign competitors. This lack of innovation is reflected in low levels of investment in Knowledge-based Capital (KBC), including research and development. Additionally, graduation rates at the doctoral level are well below the OECD average and few doctorates holders are employed in the business sector. In Spain, only 15% of doctorate holders work in the business sector as compared with well over 30% in countries such as Belgium, Denmark, the Netherlands, the United Kingdom and the United States. Spanish universities could do more to support innovation and growth through the transfer of research and knowledge to the private sector.
Spain needs to do a better job of leveraging highly skilled workers and universities to foster innovation, productivity and growth. This would involve reducing barriers to innovation and entrepreneurship and creating incentives to invest in KBC. It would also mean making the use of highly skilled workers engaged in innovation central to the business strategies of Spanish firms.
Strengthening Spain's skills system
9. Improving and expanding access to high quality learning and labour market information: Evidence of current skills mismatches as well as uncertainty about future skill needs in the context of technological advances, globalisation, demographic changes and other pressures all point to the importance of having good data and information on current and future skill needs. Learning and labour market information allows a broad range of actors to make better choices that facilitate a better alignment between skills supply and demand.
While a range of information on current skill needs is already available in Spain, there are information gaps and room for improvement in the design and dissemination of information products. Existing information in Spain is often available only in the form of dense, technical reports, which may be difficult for many users to interpret without guidance. Furthermore online information is scattered across multiple websites, making information hard to locate and cross-reference. Spain also does not conduct national forecasts of future skill needs.
10. Strengthening partnerships to improve skills outcomes: Effective partnerships are critical for developing and implementing effective skills policies. In Spain, governments are already working with the private sector to increase the number work placement opportunities for VET graduates and for workers on training contracts.
However, there are few formal partnership arrangements for facilitating dialogue and co-operation between governments and stakeholders on skills-related issues. For example, the private sector is not actively engaged to provide input into decisions related to seat allocation and course design of tertiary education programmes. This lack of collaboration may come at the cost of a poor alignment between the skills being developed in education and training and the skills needed in the economy. Partnerships that facilitate dialogue and foster co-ordinated action will be critical to address Spain’s skills challenges and build a responsive and resilient skills system.
11. Financing a more effective and efficient skills system: As it emerges from the recent recession, Spain is burdened with high levels of public debt and high budget deficits. Overall per student spending on compulsory and tertiary education is around the OECD average. The share of spending on tertiary education that is financed by the public sector in Spain (78%) exceeds the OECD average (69%).
Spain could do more to align government spending and taxation policies to encourage greater skill development, activation and use. Higher private contributions could permit new investments that strengthen the quality and relevance of skills development. The tax system could be used to incentivise more private spending on skills and to encourage firms to hire and individuals to supply their skills in the labour market. Given Spain’s decentralised administrative structure, financing a more efficient skills system requires an integrated strategy shared between the national and regional governments.
12. Strengthening governance of the skills system: Effective governance structures are needed to ensure that skills policies are implemented coherently across the many ministries and levels of government that have an interest in, or impact on, the development, activation and use of skills.
While high-level inter-ministerial committees exist, at both the state and regional level, more formal and regular dialogue is needed, especially at the mid-management level, to ensure that policies are complementary and reinforcing. Sectoral conferences – a mechanism used to co-ordinate action among the state and regional governments – are often seen as ineffective. Recognition, financial support and accountability for the results of shared initiatives can help foster meaningful collaboration among different ministries within and across all levels of government.
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