ECONOMICS OF ECONOMICS OF EDUCATIONAL ADAPTABILITYEDUCATIONAL ADAPTABILITY

Henry M. LevinHenry M. LevinColumbia UniversityColumbia University

Fundación Ramón ArecesFundación Ramón ArecesFundación Europea Sociedad y EducaciónFundación Europea Sociedad y Educación

MadridMadrid25 March 201425 March 2014

Educational Preparation of Educational Preparation of Workforce--2050Workforce--2050

Workplace and Employment are Workplace and Employment are Changing.Changing.

New Educational Needs.New Educational Needs. How Should We Prepare Educationally to How Should We Prepare Educationally to

Meet Economic Changes in Workplace?Meet Economic Changes in Workplace? Alternative Strategies.Alternative Strategies.

Traditional Strategy of PreparationTraditional Strategy of Preparation

Project changes in output Project changes in output Project changes in work organization.Project changes in work organization. Project occupational needs.Project occupational needs. Establish educational levels and Establish educational levels and

requirements.requirements. Transform educational capacity and Transform educational capacity and

content to accommodate new content to accommodate new requirements.requirements.

Failure of Educational PlanningFailure of Educational Planning Even forecasts for a decade of occupational Even forecasts for a decade of occupational

employment are poor.employment are poor. Predicting changes in work requirements based Predicting changes in work requirements based

upon changing technology and organization over upon changing technology and organization over 50 year period requires knowledge of a future 50 year period requires knowledge of a future that is entirely unknown.that is entirely unknown.

Mediterranean project of manpower planning of Mediterranean project of manpower planning of OECD in sixties led to massive forecasting OECD in sixties led to massive forecasting errors in a much more stable period than we are errors in a much more stable period than we are presently facing.presently facing.

Education and Labor ProductivityEducation and Labor Productivity

Educated workers can make better Educated workers can make better resource allocation decisions.resource allocation decisions.

Better understanding of work process.Better understanding of work process. Better allocation of own time.Better allocation of own time. Allocation of other resources of the firm Allocation of other resources of the firm

such as avoiding bottlenecks by using such as avoiding bottlenecks by using skills developed in cross-training.skills developed in cross-training.

Better allocation of scarce inputs.Better allocation of scarce inputs.

Achievement Scores and Achievement Scores and Educational AttainmentEducational Attainment

Test scores are one measure of skill.Test scores are one measure of skill. Research shows test scores are related to Research shows test scores are related to

worker productivity and earnings.worker productivity and earnings. But relationship is surprisingly modest. But relationship is surprisingly modest.

About 10 percent of variance in earnings is About 10 percent of variance in earnings is explained by test scores.explained by test scores.

Number of years of educational attainment Number of years of educational attainment explains about four times as much of the explains about four times as much of the variance in earnings as do test scores.variance in earnings as do test scores.

Why is educational attainment so Why is educational attainment so powerful in explaining productivity?powerful in explaining productivity? Students learn many cognitive skills not Students learn many cognitive skills not

covered by the limited way in which we covered by the limited way in which we measure student achievement.measure student achievement. Limited test domains.Limited test domains. Limited methods of measurement.Limited methods of measurement.

Educational attainment imparts non-Educational attainment imparts non-cognitive skills important for worker cognitive skills important for worker productivity such as conscientiousness, productivity such as conscientiousness, effort, and interpersonal relations. effort, and interpersonal relations.

2121stst Century Skills and Workplace Century Skills and Workplace

Phelps and Nelson (1966) “Education is Phelps and Nelson (1966) “Education is especially important to those functions especially important to those functions requiring adaptation to change.”requiring adaptation to change.”

Change is what we will face continually in Change is what we will face continually in 2121stst Century. Century.

Rather than educating for narrow Rather than educating for narrow occupations and roles, educating for occupations and roles, educating for adaptability.adaptability.

Adaptability at PresentAdaptability at Present Considerable substitution in occupational Considerable substitution in occupational

placement among educational levels as placement among educational levels as relative costs of educational labor and job relative costs of educational labor and job requirements change.requirements change.

For example, in U.S.with a 1 % increase in For example, in U.S.with a 1 % increase in the relative cost of workers at one level of the relative cost of workers at one level of education there is a 1.5 % increase in education there is a 1.5 % increase in employment of those with next lower level employment of those with next lower level of education (elasticity of substitution).of education (elasticity of substitution).

Traditional QualificationsTraditional Qualifications Assumes each job has specific and narrowly Assumes each job has specific and narrowly

defined qualifications that are reasonably defined qualifications that are reasonably stable.stable.

Education laws require that training embody Education laws require that training embody these qualifications for official recognition of these qualifications for official recognition of title.title.

By law public employment is based upon By law public employment is based upon official titles more than actual capabilities of official titles more than actual capabilities of different workers.different workers.

Private employers also use this system.Private employers also use this system.

TransitionTransition

Focus on a more balanced system in Focus on a more balanced system in which education for qualification is which education for qualification is balanced by education for adaptability.balanced by education for adaptability.

Adaptability becomes a key part of Adaptability becomes a key part of qualifications system for all workers.qualifications system for all workers.

What are requirements for adaptability?What are requirements for adaptability?

Education Goals for AdaptabilityEducation Goals for Adaptability

Initiative.Initiative. Cooperation. Cooperation. Group work.Group work. Peer training.Peer training. Evaluation.Evaluation. Reasoning.Reasoning. Problem solving.Problem solving.

Worker Goals (cont.)Worker Goals (cont.)

Decision making.Decision making. Information retrieval and use.Information retrieval and use. Planning.Planning. Learning skills.Learning skills. Multicultural skills.Multicultural skills.

Infusion of Adaptability

All educational levels. Emphasis on practical applications in

conjunction with subject focus. Focus on innovation and knowledge

production. Leadership and peer skills in studies.

ConclusionConclusion

Promote continued expansion of Promote continued expansion of education, but focus on quality too.education, but focus on quality too.

Movement towards worker adaptability.Movement towards worker adaptability. Concern with education of immigrants and Concern with education of immigrants and

those from low-income backgrounds.those from low-income backgrounds. Faster growth of these populations.Faster growth of these populations. Need to raise their productive participation.Need to raise their productive participation. Serious challenge foreseeable future.Serious challenge foreseeable future.

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