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Comparative assessment of skills in Russia: An economic rationale

Comparative assessment of skills in Russia: An economic rationale. T. Scott Murray DataAngel Policy Research Inc. dataangel@mac.com. What is old is new:. In the beginning: The US. Key scientific advances:

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Comparative assessment of skills in Russia: An economic rationale

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  1. Comparative assessment of skills in Russia: An economic rationale T. Scott Murray DataAngel Policy Research Inc. dataangel@mac.com

  2. What is old is new:

  3. In the beginning: The US • Key scientific advances: • Theory: The Abrams main battle tank and insight into what makes adult reading tasks difficult. Kirsch and Mosenthal • Applied statistics: The development of statistical techniques to summarize proficiency and to estimate errors. Bock and Rubin • Enabled the 1985 Young Adult Literacy Survey (YALS) ETS,NCES and USDOL

  4. In the beginning: Canada • In Canada 25 years of Scott measuring every kind of social and economic ill and being able to explain very little of it • Celtic allergy to empires built on unproven assertions of systemic discrimination • The Southam survey “24% of adult Canadians had literacy skill problems” • Conduct of the survey of 1989 Literacy Skills Used in Daily Activities (LSUDA)

  5. Precipitated multiple rounds of data collection: • IALS 1994 9 countries • IALS 1996 5 countries • IALS 1998 12 countries • Vanuatu, Immigrants in Ontario, the Deaf and Hard of Hearing in Ontario • ALL 2003 • ALL 2005 • PIAAC 2011

  6. What was learned for policy: • Large differences in skill existed both within and between countries • These differences were far larger than implied by differences in educational attainment • The differences mattered to individual outcomes but were too large to attribute to differences in educational quality

  7. The policy response: • There is no problem “Our problem is the same as that of our trading partners” • There is a problem but it doesn’t matter, “It doesn’t increase the size of the economic pie it is just an allocative mechanism” • There is a problem, it matters to growth but it is not our problem “It is a problem for individuals and firms to correct”

  8. The hypothesis of market failure: • Only governments have the tools to correct market failures: • Information • Incentives

  9. Issues that need attention: The dreaded mastery level • All adult assessments have used 80% as a proxy for what employers expect of workers • PISA uses 62.5% because education systems are not focused on mastery • OECD is pushing to have the PIAAC standard changed to distance it from IALS, a step that would break the series • Empirical analysis by Somers & Murray suggests that the Response Proficiency should vary by occupation from 40% to 95%

  10. Brain Structure Back to F r on t brain from the top Left to Right

  11. Brain Structure Information (processing-based) Back to F r on t Knowledge (thinking-based)

  12. Brain Structure What is this brain doing? brain from the side Decoding PET Scan

  13. Brain Structure What is this brain doing? Hearing PET Scan

  14. Brain Structure What is this brain doing? Speaking PET Scan

  15. Brain Structure What is this brain doing? Dr. Michael O’Boyle images from Texas Tech. University School of Medicine, Department of Neurology Math PET Scan

  16. Brain Structure What is this brain doing? Thinking PET Scan

  17. Brain Structure http://www.nil.wustl.edu/labs/raichle/

  18. Issues for further study: • Developing a better understanding of supply, demand and the efficiency of markets • Our analysis suggests that supply-side interventions are not enough. One needs to manage demand and improve the efficiency of markets that match workers with jobs

  19. Theoretical Framework: a “Markets” Model of Skill Skill Demand • Markets for skill: • Education • Labour • Health • Social Skill Supply = skill stock + net skill flow from lifelong, life-wide learning + quality of early childhood experience + quantity of primary and secondary education + quantity and quality of tertiary + quantity and quality of adult learning (formal, non-formal, informal) +/- immigration +/- emmigration - skill loss associated with insufficient demand+/- social demand for skill+/- economic demand for skill Outcomes

  20. Skill gain and loss, the behaviour of firms and the possibility of multiple equilibria:

  21. One way in which firms compensate for a workforce with weak literacy skills is to adopt less productive work organizations, work processes and technologies of production: The production frontier: the point where one gets the most output at the lowest unit cost Cost A less productive configuration Output

  22. Correcting the market failure: • Projecting down: skill profiles for small areas • Projecting down: Skill profiles for detailed occupations and cost-benefit analyses • Projecting out: Forecasts of skill supply and demand • RCT’s and quasi-experimental studies to establish effect sizes and cost-benefit

  23. Our basic hypothesis: A failure in the literacy market • The literacy market failure can be traced back to: • Complacency due to 50 years of economic success • A failure to appreciate the implications of the changes occurring in the global economy • A lack of information on the nature of the problem • A lack of tools to assess skills • A lack of efficient and effective instructional programs

  24. Projecting down: The local distributions of skill

  25. Projecting down: Absolute and relative risks of being in literacy shortage by occupation, Canada 2006:

  26. Colleges are admitting large numbers of low skilled youth:

  27. Fixing the flow: Quality of secondary graduates is not improving, large percentages have skills below those needed to take full advantage of PSE, and there are large social inequities

  28. Projecting out: How the distribution of performance by level is likely to change 2001 - 2031

  29. Literacy demand rising rapidly and literacy supply flat: Shortages will grow over coming decade

  30. Understanding the learning needs of low-skilled adults:The transition from learning to read to reading to learn: Learning to read Reading to learn Proficiency dominated by cognitive strategies Proficiency dominated by mechanics of reading 0 225 275 325 375 500 Level 4 Level 5 Level 2 Level 3 Level 1

  31. Literacy market segments in Canada:

  32. Segments in the Canadian literacy market:

  33. The efficiency of the market for literacy: Balance of total supply and total demand (in points)

  34. The efficiency of the market for literacy: Literacy skill surpluses and shortages by level of the job (in workers)

  35. 50% of workers in Alberta are in shortage:

  36. Estimated benefits are clear:

  37. Issue for further study: Improving our understanding of how skill drives productivity and wages • Two competing hypotheses: • Skill is a general driver of productivity growth across the whole spectrum of occupational demand • Skill only pays in jobs where demand for use is high • Reder: Skill pays but only in bad times

  38. 33% of wage variation in Canada is attributable to skill differences:

  39. The impact of skill on individual labour market outcomes Earnings and literacy proficiency, controlling for education and labour force experience … literacy explains a significant fraction of wage variability in Portugal, but less than education or experience …a sign of an inefficient labour market or low demand… Countries are ranked by the magnitude of the effect parameter associated with educational attainment PRC Source: International Adult Literacy Survey, 1994-1998.

  40. A Framework for Thinking about Essential Skills at the Individual Level: Mechanisms • Reliance on practical and crystallized cognitive tools• Reliance on others• Avoidance Outcomes for Social Institutions (MESO) Societal Outcomes (MACRO) Individual Outcomes (MICRO) Changing Skill Demands • Tasks to be accomplished/imposed by society/economy • Changes associated with the life course • • Individual goals/aspirations • Functioning in socially heterogeneou s groups • Acting autonomously • A well functioning, equitable economy and society • Successful institutions • firms • families • communities • schools Resolution Processes • Reliance on Physical tools • Reliance on fluid and creative cognitive and meta-cognitive tools

  41. Issues for further study: The impact of skills on health outcomes and costs: • Adults with low health literacy scores remain 2.5 times more likely to be in fair or poor health even after adjusting for a wide range of variables • Elimination of skill shortages using “best practice” interventions would break even if it saved 1% of health costs and would yield large economic benefits

  42. Issues for further study: The impact of skills on health outcomes and costs: • Need to understand biochemical pathway that links skill to health • Need an RCT to know • Hypothesis: • Low skill = bad outcomes = chronic stress = high blood cortisol =impaired immune response = higher rates of CVD, diabetes and cancer

  43. Qatar Russia

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