OECD (2000)

INDIVIDUAL, SOCIAL AND LABOUR
MARKET OUTCOMES OF EDUCATION
E
Education and work are intimately connected, with education having two obvious effects on economic
productivity. First, education can contribute to the development of knowledge, which translates
into technological improvements and aggregate productivity gains. Secondly, education can increase the
skills and knowledge of individual workers, allowing them to accomplish particular tasks better and to
adapt more easily to changing job requirements. In a free labour market, the success of an education system
manifests itself among other things through the success of the individual in finding and holding a job,
as well as in the level of wages that employers are willing to pay for the skills which the individual has.
The adequacy of workers’ skills and the capacity of the labour market to supply jobs that match those
skills are important issues for policy-makers.
Indicator E1 examines the relationship between educational attainment and labour-force activity,
examining rates of participation in the labour force first, and then rates of unemployment.
The transition from school to work is a critical period for young people − when the knowledge and
skills learned in formal education come up against the skill requirements of the labour market. The extent
to which learning at school or university translates into workplace skills and performance, and the work
habits acquired at this stage, have a considerable effect on social integration and future labour-force
activity and earnings.
Young people represent the principal source of new skills in our societies. In most OECD countries,
education policy seeks to encourage young people to complete at least secondary education. Since jobs
on offer in the labour market require ever higher levels of skill, persons with low attainment are often
severely penalised in the labour market. Despite progress in attainment levels, many young people are
subject to unemployment. Differences in unemployment rates by level of educational attainment are an
indicator of the degree to which further education improves young people’s economic opportunities.
The youth unemployment rate by age group is the most common measure available for describing
the problems of transition between school and work. However, it gives only a partial view of the situation.
Introducing an indicator showing youth unemployment as a proportion of the population as a whole, and
confining it to young people who are not in education, is a way of defining the most significant population
for the purposes of education policy and youth employment policy.
Indicator E2 reveals the education and work status of young people in a number of OECD countries,
in the age groups 15 to 19, 20 to 24, 25 to 29, and the overall situation for all young people aged 15 to 29.
Working during education can occur in the context of work-study programmes or in the form of part-time
jobs out of school hours. As young people get older, fewer remain in education, and fewer hence combine
it with work. Young adulthood is generally the period when initial schooling is completed and young persons
enter the labour market for the first time. In certain countries, education and work take place largely
consecutively, while in other countries they may occur concurrently. The various patterns of education
combined with work can have significant effects on the success of the transition process.
Indicator E3 focuses on the specific forms of young people’s employment. At issue here is the kind
of work available to young people leaving the education system. Part-time work is becoming more widespread,
as are fixed-term contracts and temporary jobs. But labour-market regulations differ widely
© OECD 2000
257