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Promoting Human Capital: Are governments effective? The case of Macedonia

Analyzing the effectiveness of government efforts to improve human capital in Macedonia to foster economic growth through education reforms and addressing skills mismatches.

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Promoting Human Capital: Are governments effective? The case of Macedonia

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  1. Promoting Human Capital: Are governments effective? The case of Macedonia Dr. Nikica Mojsoska Blazevski University American College-Skopje Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  2. Human capital endowment “The level of human capital is still low.” “ The authorities continued to improve both the physical infrastructure of education and the regulatory framework …” “The low level of education and … contribute to a low general level of productivity” (EC, Progress Report, p.28) Without well educated workforce Macedonia cannot become a modern, innovation-driven, export-oriented economy Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  3. Growth path: neglected human capital Low-skill specialisation, with low-level equilibrium, low growth, high U, informal work, insufficient technological change Emphasis on school inputs rather than outputs Education policy was mainly focused on dealing with segmented systems of provision, with limited attention to employability (ETF, 2009) Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  4. Education outputs • Poor achievements on international assessment • Low expected years of schooling (12.3) • High share of early school leavers (1.8 p.p. higher than in the EU-27, 6 p.p. for females) • Only 14.3% of 30-34 years-olds with completed tertiary education (Europe 2020 targets 40%) • Difficult school-to-work transition Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  5. Education pays-off • Much higher employment rates and lower unemployment rate for highly educated persons • Higher probability of finding a job • Lower incidence of discouraged workers • Wage premiums Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  6. Educational reforms • Recent educational reforms: - introduction of nine-year primary education, - compulsory secondary education, - revised curriculums which promote outcome oriented and interactive teaching and learning, - reform of 4-year VET, - early learning of English language and ICT skills, - implementation of Bologna declaration, - expansion and subsidies to higher education Improvement of physical capacity at lower education levels and expansion of provision at university education Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  7. Report: Skills Not Just Diplomas “Without adequate information on the skills students acquire and those adults actually have, policies to address skills gaps operate in the dark,” Lars Sondergaard, lead author of the report. Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  8. Vertical mismatch - LFS Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  9. Occupational mismatch - ESA •  Planned demand (vacancies) equal to about 1.5% of current employment (10,060) • By industry: manufacturing (50%), trade (21.2%), construction (8%) and 5% in transport and communications • Highest demand for secondary educated workers (62.3%) • About 10% of total demand for workers with tertiary education • Focus on experienced workers, foreign languages, IT, and soft skills Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  10. Occupational mismatch – ESA (2) •  10% of firms reported that experienced difficulty in hiring (experience and soft skills) • Mainly in manufacturing industry and for secondary-educated • Findings are used for designing and implementing some ALMPs Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  11. Findings - ESA •  Mismatch problem is driven by specific factors at different educational levels - at lowest educational level, it is mainly an issue of low qualifications and lack of specific skills of non-qualified workers; - at lower and upper secondary education, the problem is lack of specialization of gymnasium graduates, and lack of additional skills and working experience for the rest; - for highly educated individuals, it is the occupational choice and surplus of degrees in less market-oriented sciences Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  12. Skill Demand Survey - WB About 30 percent of employers claim that hiring a worker with required skills is difficult Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  13. Skill Demand Survey – WB (2) • Modern and dynamic firms are more seriously harmed by skill shortages – potential constrain to growth • Newly created jobs differ in the skill content from old destructed jobs: high professional skills, or medium-level non-manual skills • Demand for advanced technical and professional skills Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  14. Skill Demand Survey – WB (3) • The aggregate job vacancy rate is 3% (unmet demand) • Vacancy duration from 2 weeks (sales worker) to 5 weeks (professional) Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  15. Skill Demand Survey – WB (4) • Top 5 most important skills for employers: • Sense of work ethics, • Overall literacy, • Communication skills, • Customer care, • Motivation. • Foreign language, ICT, technical / vocational skills, problem-solving • Top 5 skills that applicants lack: • Responsibility and reliability, • Motivation and commitment, • Communication skills, • Customer care, • General literacy skills. Unemployment seems more related to work ethics and key competencies than with technical/vocational and job specific-skills

  16. Skill Demand Survey – WB (5) • Lessons for educational policy: 1. Education system and curricula should be made more responsive to labour market needs – engage employers 2. More attention should be paid to soft skills – “beyond the traditional function of the educational system “ - Soft skills usually acquired outside the school system: Improve and expand early childhood learning programs, especially for children from disadvantaged social background/rural areas. Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

  17. What do studies show? • Employers value key competencies and soft skills • Greater demand for: - highly educated individuals and those with secondary education, and - medium and advanced professional and occupational skills • Occupations in demand? - Sectoral skill committees • Is it effective to invest heavily in higher education? • The role of institutions Conference "New Skills for New Jobs", Sarajevo, 27-28 October, 2011

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