The returns to investments in adult
skills in the UK, and the effectiveness
of policies aimed at improving them
Anna Vignoles
Institute of Education
What skills?
Cognitive and non-cognitive skills
 Basic skills, particularly literacy and
numeracy

 high
value in the labour market in UK
 for individuals with same qualifications, those
with better basic skills earn more

Qualification levels - used as indicator of
skill
Policy Background
 The
UK has a poor record in terms of the
basic skills of its adult population
•
•
•
Moser report, DfEE, 1999
UK in bottom half of the OECD basic skill
distribution
UK has higher proportion of unqualified
workers than many other countries
•
Leitch 2006
Literacy and Numeracy in the UK:
Age 16-65 Skills for Life Survey 2001
Level
Below target
Level 1
Level 2 or above
Average age
expected to
achieve
Age 7-11
Age 11-16
Age 16
Literacy
Numeracy
(% of sample)
(% of sample)
16
40
44
47
28
25
The proportion of the workforce
with low, intermediate and high
skills
Low
Intermediate
High
60
50
40
30
20
10
0
USA
Japan
Germany
Source: Leitch Interim Report, 2006
United
Kingdom
France
Qualifications and basic skills
No
qualifications
Level 1
Level 2
Level 3
Level 4
Level 5
Literacy
Below target
Level 1
Level 2
24.5
43.2
32.3
12.0
38.6
49.4
10.4
31.7
57.9
5.3
32.2
62.6
2.3
23.7
74.0
0.6
15.1
84.4
Numeracy
Below target
Entry level 3
Level 1
Level 2
40.1
38.2
15.0
6.8
23.0
34.4
30.1
12.6
17.3
28.5
30.6
23.7
14.0
20.9
36.5
28.7
6.4
17.4
37.4
38.8
1.3
11.2
33.0
53.6
How are skills produced?

Largely in childhood/ during schooling
 Socio-economic
gaps in cognitive and
non-cognitive skills emerge early
 Strong intergenerational component to
education and not all of this is genetic
 Intergenerational component to basic
skills too
What policies in adulthood?

Knowing that early interventions are
more effective does not mean that it is
impossible to design effective
interventions for adulthood
Only weak evidence that some adult
policy interventions have been
successful
Basic skills – UK policy




PSA target to improve the basic skills of 2.25 million
adults by 2010
Improvement defined as movement up a level or the
achievement of a qualification
Skills for Life programme increased from £167 million in
2000-01 to £995 million in 2006-07
Investment per course:



ESOL £1,000
Literacy / numreracy/ Level 1 and 2 qualifications £500
On course to meet the 2010 target but mainly through
16-18 year olds - not mature adults (NAO, 2008)
Basic skills and adult learning
Nil impact from taking numeracy or
literacy courses
 Gains in basic skills modest for adult
learners (some in reading/ none in
writing)
 Some evidence that basic skills tuition
reduces drop out

Workplace basic skills training





Gains in literacy/numeracy are very small
from workplace literacy courses
Courses can reach adults who are not
engaged in other learning
Course participants more likely to do other
learning
Courses are too short
Often turn into ESOL provision – massive inc
demand
Systematic Review of Literacy Interventions
Seven Random Control Trials(RCT) and
27 Control Trials (CT).
 Largely IT delivered basic skills training
 2 RCTs and 3 CTs found positive impact

Systematic Review of Numeracy
Interventions
Four RCTs and 8 CTs
 One RCT showed positive effect
 UK RCT no impact
 Studies so different “no conclusions could
be drawn about the precise effect of
particular instructional practices”

Training programmes/qualifications
Firm provided training
 Government subsidised training

 2006
Train to Gain
 subsidised training to first Level 2 qualification
 £300 million spent in 2005-06
 over £1 billion by 2010-11 ???

Vocational qualifications
Work related adult training
Work-based training by UK firms gives
good economic return both in terms of
wages and productivity
 Productivity gain > wage gain
 Partly because firms do not train low
skilled

Train to Gain





Subsidised work related training for low skilled
workers
Pilots evaluated by IFS in 2003 and 2004
Small positive but insignficant effect on
incidence of training
Majority undertaking this training would have
done so in the absence of the programme –
deadweight
Train to Gain benefiting employers that would
train anyway
The qualification route
Acquiring most qualifications (apart from
degrees) during adulthood has little impact
on earnings
 Acquiring qualifications late leads to lower
returns
 Qualifications can improve women’s
employment prospects

Qualifications for low skilled
Main policy vehicle for delivering training
to low skilled workers is the level 2
entitlement
 Some traditional level 2 vocational
qualifications yield sizeable wage returns

 13%
for a BTEC First or General Diploma
 5-7% for a City and Guilds Craft qualification
Qualifications for low skilled
Wage returns to National Vocational
Qualifications (NVQs) are negligible at
levels 1and 2
 Even for young workers, NVQs do not
perform as well as other VQs and certainly
not as well as academic qualifications

Qualifications for low skilled

Why the problem with NVQs?
 they
accredit existing skills
 they impart the wrong skills in some
sectors/occupations
 they are taken by the ‘wrong’ people
 they are target driven
Conclusions



Significant proportion of UK work force has low
skills/ low levels of qualification
Strong demand for cognitive, basic and noncognitive skills in labour market
Early development of these skills essential
 2006/7
45 % school leavers still not achieving Level 2
maths (GCSE grades A*-C) and 40 per cent not
achieving Level 2 English

Hard to design effective adult interventions,
although firm provided training is beneficial
Conclusions

Why are adult interventions not successful?
 Poor
quality provision e.g. poorly qualified teachers,
particularly in basic skills area
 Target driven so focus on qualifications not content
 Courses not intense enough

Comings (2003) concluded that time is an issue – learners
need 100-150 hours of instruction
 Heckman
argument that cognitive skill are less
malleable later in life