ECONOMICS OF
EDUCATIONAL ADAPTABILITY
Henry M. Levin
Columbia University
Fundación Ramón Areces
Fundación Europea Sociedad y Educación
Madrid
25 March 2014
Educational Preparation of
Workforce--2050
 Workplace
and Employment are
Changing.
 New Educational Needs.
 How Should We Prepare Educationally to
Meet Economic Changes in Workplace?
 Alternative Strategies.
Traditional Strategy of Preparation
 Project
changes in output
 Project changes in work organization.
 Project occupational needs.
 Establish educational levels and
requirements.
 Transform educational capacity and
content to accommodate new
requirements.
Failure of Educational Planning

Even forecasts for a decade of occupational
employment are poor.
 Predicting changes in work requirements based
upon changing technology and organization over
50 year period requires knowledge of a future
that is entirely unknown.
 Mediterranean project of manpower planning of
OECD in sixties led to massive forecasting
errors in a much more stable period than we are
presently facing.
Education and Labor Productivity
 Educated
workers can make better
resource allocation decisions.
 Better understanding of work process.
 Better allocation of own time.
 Allocation of other resources of the firm
such as avoiding bottlenecks by using
skills developed in cross-training.
 Better allocation of scarce inputs.
Achievement Scores and
Educational Attainment
 Test
scores are one measure of skill.
 Research shows test scores are related to
worker productivity and earnings.
 But relationship is surprisingly modest.
About 10 percent of variance in earnings is
explained by test scores.
 Number of years of educational attainment
explains about four times as much of the
variance in earnings as do test scores.
Why is educational attainment so
powerful in explaining productivity?
 Students
learn many cognitive skills not
covered by the limited way in which we
measure student achievement.


Limited test domains.
Limited methods of measurement.
 Educational
attainment imparts noncognitive skills important for worker
productivity such as conscientiousness,
effort, and interpersonal relations.
21st Century Skills and Workplace
 Phelps
and Nelson (1966) “Education is
especially important to those functions
requiring adaptation to change.”
 Change is what we will face continually in
21st Century.
 Rather than educating for narrow
occupations and roles, educating for
adaptability.
Adaptability at Present
 Considerable
substitution in occupational
placement among educational levels as
relative costs of educational labor and job
requirements change.
 For example, in U.S.with a 1 % increase in
the relative cost of workers at one level of
education there is a 1.5 % increase in
employment of those with next lower level
of education (elasticity of substitution).
Traditional Qualifications
 Assumes
each job has specific and
narrowly defined qualifications that are
reasonably stable.
 Education laws require that training
embody these qualifications for official
recognition of title.
 By law public employment is based upon
official titles more than actual capabilities
of different workers.
 Private employers also use this system.
Transition
 Focus
on a more balanced system in
which education for qualification is
balanced by education for adaptability.
 Adaptability
becomes a key part of
qualifications system for all workers.
 What
are requirements for adaptability?
Education Goals for Adaptability
 Initiative.
 Cooperation.
 Group
work.
 Peer training.
 Evaluation.
 Reasoning.
 Problem solving.
Worker Goals (cont.)
 Decision
making.
 Information retrieval and use.
 Planning.
 Learning skills.
 Multicultural skills.
Infusion of Adaptability
 All
educational levels.
 Emphasis on practical applications in
conjunction with subject focus.
 Focus on innovation and knowledge
production.
 Leadership and peer skills in studies.
Conclusion
 Promote
continued expansion of
education, but focus on quality too.
 Movement towards worker adaptability.
 Concern with education of immigrants and
those from low-income backgrounds.



Faster growth of these populations.
Need to raise their productive participation.
Serious challenge foreseeable future.
THANK YOU