Remarks by Angel Gurría, OECD Secretary-General, at the launch of the OECD Survey of Adult Skills, 8 October 2013, Brussels, Belgium

 

Commissioner Vassiliou, Ladies and Gentlemen,

It is a great pleasure to be here in Brussels to launch our first OECD Survey of Adult Skills. Let me begin by expressing my sincere gratitude to Commissioner Vassiliou and the European Commission for supporting us in this important and ambitious endeavour.

Last year, we launched our Skills Strategy to help countries build better skills policies and turn them into jobs, growth, and better lives. Today I’d like to present a new powerful tool to help countries achieve this goal, make the best use of a high-quality pool of skills and prepare their workers for success in a fluid, rapidly-changing and highly-technological 21st century labour market.

The Survey of Adult Skills (otherwise known as PIAAC) assesses the depth and breadth of countries’ talent pools, how well countries use them and what benefits they gain. It is a sort of ‘PISA for adults’. It helps countries set meaningful targets benchmarked against the achievements of the world’s leading skills systems. Indeed, what we are measuring is the “key information-processing competencies”, necessary for individuals to become fully integrated into the labour market, education and training, and social and civic life. The main goal is to identify how, those who are already in the labour market, acquire, improve and utilise their skills.

We have opened a new gold-mine of knowledge that will be crucial for policy-makers to succeed in their efforts to improve education systems and tackle unemployment effectively. Let me share with you some of our main conclusions and recommendations.

 

The OECD Survey on Adult Skills: Some Key Findings.

 

1. What people know has a major impact on their life opportunities. Our study confirms that knowledge is destiny. On average across countries, the median hourly wage of workers who get high scores in our literacy test - Level 4 or 5, meaning that they can make complex inferences and evaluate subtle arguments in written texts - is more than 60% higher than the hourly wage of workers who score at Level 1 or below - meaning those who can, at best, read relatively short texts and understand basic vocabulary. Those with poor literacy skills are also more than twice as likely to be unemployed. In short, poor skills severely limit people’s access to better-paying and more-rewarding jobs. It works the same way for nations. The Skills Survey shows that the distribution of skills relates closely to how the benefits of economic growth are shared within societies. For instance, the Slovak Republic and Czech Republic have a gini coefficient of just 0.25 and a very low dispersion of literacy skills. At the other extreme, the United States and the United Kingdom have gini coefficients exceeding 0.34 and a very high dispersion of literacy skills.

2. Proficiency in basic skills affects more than earnings and employment. In all countries, adults with lower literacy proficiency are far more likely than those with better literacy skills to report poor health, to perceive themselves as objects rather than actors in political processes, and to have less trust in others. In other words, we can’t develop fair and inclusive policies and engage with all citizens if a lack of proficiency in basic skills prevents people from fully participating in society. In Southern European Countries, just one in twenty adults is proficient in literacy at the highest levels, in contrast with one in five adults in Japan and Finland.

3. Even highly literate nations have significant shallow areas in their talent pools. In all countries except Japan, at least one in ten adults doesn’t make it beyond the baseline level in literacy or numeracy. Across the 24 countries that took the test, that translates into more than 80 million people. On top of that, in the United States, Poland, Germany, Italy and England, a difficult social background often translates into poor literacy skills.

4. Countries are making quite uneven progress in empowering new generations with better skills. Some countries have made impressive progress in equipping more people with better skills. Young Koreans, for example, are outperformed only by their Japanese counterparts, while older Koreans are among the three lowest-performing age groups in the countries surveyed. This reveals a significant generational improvement. The results from Finland tell a similar story. In contrast, young Brits and Americans are entering a much more demanding job market with similar literacy and numeracy skills as those who are retiring. This is scary. Over the next decades, the talent pool in these countries could shrink significantly unless urgent action is taken both to improve schooling and to provide adults with better opportunities to develop and maintain their skills.

5. Actual skill levels often differ markedly from what formal education qualifications suggest. In fact, in most countries at least a quarter of university graduates do not score higher than Level 2 on our literacy test, and are thus insufficiently equipped for what their jobs demand of them. It is also striking that young Japanese and Dutch high school graduates easily outperform university graduates in some other countries. Surely there are many reasons why skills and qualifications differ; but the data suggests that we may need to update and re-define our education qualifications.

6. Some countries are implementing very effective policies to help adults who did not benefit from great schooling. The Nordic countries, the Netherlands and Canada, for example, have been much better, than other countries, in providing high-quality lifelong learning opportunities, both within and outside the workplace. They’ve developed programmes that are relevant to users and flexible, both in content and in how they are delivered. They’ve also made skills everybody’s business by engaging with governments, employers, and individuals.

What We Do With What We Know: Matching Skills and Jobs

All this said, skills are only valuable when they are used effectively, and the Skills Survey shows that not all countries are good at making effective use of their talent. In fact, some perform much better than others. For example, while the US and England have a limited skills base, they are extracting good value from it. The reverse is true for Japan, where rigid labour-market arrangements prevent many high-skilled individuals, most notably women, from reaping the rewards that should accrue to them.

At times, over-reliance on qualifications makes it harder for those who have the right skills, but who did not have the same access to education as others, to gain entry into jobs where those skills can be put to full use. Under-use of skills is particularly common among young and foreign-born workers and among those employed in small enterprises, in part-time jobs or on fixed-term contracts. And it shows in their wages.

The Skills Survey suggests that we can – and should – do better in matching the demand and supply of skills. Coherent, easy-to-interpret certification that incorporates formal and informal learning over the working life is essential, particularly for foreign workers. Where there is under-skilling, we need public policies that identify workers with low skills and incentivise employees and employers to invest in developing skills.

When the skills available aren’t adequately used, we need better management practices. Hiring practices that make it easy for school leavers to access jobs that match their skills, and for those who have withdrawn from the labour market to return to it, will help countries realise their untapped potential. We also need to assess the skills held by unemployed individuals at the start of their jobless spell so that employment services can identify the most appropriate course of action to help these people return quickly to employment, or access the right training programmes.

Ladies and Gentlemen:

The bottom line is that skills matter! What is the point of going to school and then perhaps on to university, a Master’s degree and even a PhD, if after that long and thorny road there is a cliff called unemployment? How can we sustain our enthusiasm for life if we find ourselves in maturity prepared for a job that is no longer relevant, with the skills for a play which is no longer on stage? The only way to address this is by helping people to develop and nurture the relevant and pertinent skills, and to transform them and invest in new skills as the situation demands.

The OECD stands ready to help countries interpret the findings of the Adults Skills Survey and come-up with a road-map for improvement in this area. From next month you can also find out how your skills measure up against those in the countries surveyed by completing the online Survey at our Education & Skills portal.

I hope you will join me in telling the world that skills must become a new global priority if we are to succeed in delivering better policies for better lives.

Thank you very much.