United Kingdom’s skills snapshot
The United Kingdom’s future growth prospects will depend heavily on how well it manages and develops the skills of its workforce. Finding ways to optimise its human resources, particularly its young people, will be key to addressing this challenge.
Developing the relevant skills
- How well does the UK education system perform? In the 2009 PISA tests of 15-year-olds, the United Kingdom performs close to the OECD average in reading (rank 25), slightly below average in mathematics (rank 28) and above average in science (rank 16).1 This being said, 18% of 15-year-olds in the United Kingdom do not reach the OECD/PISA baseline Level 2 of literacy. Excluding students with an immigrant background reduces the percentage of poorly performing students only slightly to 17%. By contrast, in Canada, Finland and Korea, the proportion of poor performers is only between 6% and 9%. Students who did not surpass the most basic performance level on PISA were not a random group and the results show that, as in many other countries, socio-economic disadvantage has a strong impact on student performance in the United Kingdom: 14% of the variation in student performance is explained by students’ socio-economic background (OECD average 14%). This contrasts with just 9% in Canada or Japan.
- The international achievement gap is imposing on the UK economy an invisible yet recurring economic loss. A recent study carried out by the OECD in collaboration with the Hoover Institute at Stanford University suggests that narrowing the achievement gap by bringing all students to a baseline level of minimal proficiency for the OECD (approximated by a PISA score of 400) could imply GDP increases for the United Kingdom of US$ 6 trillion according to historical growth relationship. Although there are uncertainties associated with these estimates, the gains from improved learning outcomes, put in terms of current GDP, exceed today’s value of the short-run business-cycle management.
- Does the United Kingdom invest enough in education and training? The United Kingdom spent 6% of its annual income on education in 2009, compared to the OECD average of 6.2%.2
- How much are UK citizens undertaking further education? In 2006, 40% of UK citizensparticipated in continuing non-formal education compared to the OECD average of 34%.3
- How equal is access to opportunities for further training in the United Kingdom? In 2006, 63% of people aged 25-64 with a tertiary-level education participated in formal and/or non-formal education, compared with 33% for people in the same age group with below upper secondary education.4
- Should more be done to prevent skills shortages? Only 15% of UK employers reported recruitment difficulties in 2011, compared to 34% in 2007.5,6 However, this mainly reflects an increase in labour slack as unemployment rose between 2007 and 2011.7
- Is there scope to improve skill utilisation in the United Kingdom through strengthening labour force participation? In 2011, 85% of people aged between 25 and 54 were in the labour force, compared to an OECD average of 81%.8 The participation rate for prime-age women (aged 25-54) is above the OECD average at 79% in 2011 (OECD average 71%).9
- To what extent are the United Kingdom’s older workers supplying their skills to the labour market? In 2011, 59.8% of people aged 55 to 64 were in the labour force, compared to an OECD average of 57.8%.10 Of workers aged 55-59 in 2005, only 44% were still working for the same employer in 2010 in the United Kingdom compared with 60% in Sweden.
- How smooth is the transition from school to work for UK youth? The employment rate of UK youth in 2011 was 46.4%, compared with the OECD average of 39.3%.11 In 2011, the unemployment rate of UK youth was 21.1%, a relatively high rate compared with the OECD average of 16.2%.12 And in the 1st quarter of 2011, 13.4% of youth were not in employment or in education and training..Moreover, just under half of working youth (46.7%) were employed involuntarily in temporary jobs.
- Are the qualifications of UK workers well matched with the requirements of their jobs? In 2005, only 8% of UK workers were over-qualified for their jobs (against the OECD average of 25%), and 25% were under-qualified (against the OECD average of 22%).13 Over-qualified (under-qualified) workers are those who have a higher (lower) qualification than the most common qualification of all other workers in the same occupation.
Key recommendations from the OECD Skills Strategy
A country can develop the relevant skills by encouraging and enabling people to learn throughout life; fostering international mobility of skilled people to fill skills gaps; and promoting cross-border skills policies.
A country can activate the supply of skills by encouraging people to offer their skills to the labour market and retaining skilled people in the labour market.
A country can put skills to effective use by creating a better match between people’s skills and the requirements of their job and increasing the demand for high-level skills.
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