The OECD Skills Strategy
Better skills, better jobs, better lives
Bert Brys
Senior Tax Economist, CTP/OECD
LAC Fiscal Forum 16-17 June 2015
OECD Skills Strategy (2012)
Skills transform lives and drive economies
 What people know and what they can do
has a major impact on their life chances
 Building the right skills can help countries
improve economic prosperity and social
cohesion by supporting:
 improvement in productivity and growth
 high levels of employment in good
quality jobs
 social outcomes such as health, civic and
social engagement
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What do we mean by skills?
“Skills (or competencies) are defined as
the bundle of knowledge, attributes and capacities
that can be learned and that enable individuals to
successfully and consistently perform an activity or task
and can be built upon and extended through learning.”
“The sum of all skills available to the economy at a given
point in time forms the human capital of a country.”
OECD Skills Strategy (2012)
What is the OECD Skills Strategy?
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Skill levels vary considerably across countries
Adult Mean Numeracy Skills by Proficiency Levels (PIAAC, 2012)
Japan
Finland
Sweden
Denmark
Netherlands
Slovak Republic
Czech Republic
Norway
Estonia
Austria
Flanders (Belgium)
Russian Federation³
Germany
Average
Australia
Canada
Korea
Poland
England/N. Ireland (UK)
Ireland
France
Italy
United States
Spain
1,2
0,0
0,0
0,4
2,3
0,3
0,6
2,2
0,4
1,8
5,2
0,3
1,5
1,2
1,9
0,9
0,3
0,0
1,4
0,5
0,8
0,7
4,2
0,8
80
%
60
Level 2
Source: OECD, Survey of Adult Skills 2012
40
Level 1
20
Below Level 1
0
20
Level 3
40
Level 4/5
60
80
No information
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Skills vary across levels of educational attainment and
across OECD countries
Mean literacy score of 25-64 year olds, by educational attainment (PIAAC, 2012)
320
Below upper secondary education
Upper secondary or post-secondary non-tertiary education
Tertiary education
300
280
260
240
220
Source: OECD (2013), PISA 2012 Results: What Makes Schools Successful? Resources, Policies and Practices (Volume IV), PISA , OECD
Publishing.
Russian Federation* 276
Italy 249
Spain 251
Estonia 274
Canada 273
Korea 269
Ireland 266
Denmark 270
Germany 269
France 260
Slovak Republic 273
England/N. Ireland (UK) 274
Austria 268
Poland 264
Average 272
United States 269
Norway 280
Flanders (Belgium) 274
Czech Republic 273
Australia 280
Sweden 279
Finland 287
Japan 296
Netherlands 282
200
PIAAC
mean
literacy
score for
all levels of
education
combined
Evolution of the employment-to-population ratio
Percentage of the working-age population (aged 15 or more)
%
80
70
60
50
40
30
Current
(Q2 2014)
Start of the crisis
(Q4 2007)
Projected value
(Q4 2016)
Labour productivity and labour resource utilisation differ
considerably across the OECD
50
30
10
-10
-30
-50
-70
50
30
10
-10
-30
-50
-70
A. Percentage GDP per capita difference compared with the upper half of OECD countries¹
B. Percentage difference in labour resource utilisation and labour productivity²
Labour productivity
Labour resource utilisation
PIAAC Literacy Scores, 16-24
Year Olds
Low Skills – High (Youth) Unemployment
305
300
Japan
Netherlands Finland
S. Korea
295
290
Estonia
Australia
Sweden
Germany
Czech Rep. Poland
Austria
Denmark
Norway Canada
France
United States
285
280
275
270
Slovak Rep.
Ireland
265
Spain
Italy
260
255
0
10
20
30
40
50
60
Youth Unemployment
Countries with low skills tend to have higher
unemployment, especially among young people (also
because “insiders” are “protected”).
Source: PIAAC, OECD Employment Database
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Turkey
Spain
Italy
Chile
Mexico
Ireland
Brazil
Hungary
Slovak Republic
Korea
Portugal
France
United Kingdom
Poland
Estonia
Israel
United States
OECD average
Belgium
New Zealand
Greece
Czech Republic
Canada
Denmark
Finland
Australia
Slovenia
Germany
Austria
Sweden
Switzerland
Iceland
Norway
Luxembourg
Netherlands
A large % of Chilean and Mexican youth is NEET:
neither employed nor in education nor in training
NEET population among 15 to 29 year-olds (2012)
% of 15-29
year-olds
30
25
20
15
10
5
0
Source: OECD (2014), Education at a Glance 2014, OECD Publishing.
Linkages between Skill Development and Skill Activation
Labour
Market
Participation
Skills Levels
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Use of Skills at Work
Use of Skills at Work (PIAAC, 2012)
Most frequent use= 4
Average
Spain
United States
2,4
Index of Use
2,2
2
1,8
1,6
1,4
Reading at work
Least frequent use = 0
Writing at work
Numeracy at work
ICT at work
Problem solving at
work
The demand for skills is changing
Levy and Murnane
13
New technologies and work practices
are transforming workplaces
Percentage of workers who reported changes in their current workplace during the
previous three years that affected their work environment
60
Low-skilled clerical
High-skilled manual
50
High-skilled clerical
Total
Low-skilled manual
40
30
20
10
0
10
Poland
Spain
Turkey
Hungary
Italy
Greece
Slovenia
Portugal
Austria
Germany
Belgium
Slovak Republic
Czech Republic
Croatia
Average
Luxembourg
France
Latvia
Ireland
Estonia
Korea
Netherlands
United Kingdom
Norway
Denmark
Finland
Sweden
20
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High level skills will be in high demand
Job opportunities in EU 28 by qualification levels, forecast 2013-2025
(baseline scenario, 000s)
Expansion Demand
Replacement Demand
50.000
40.000
30.000
20.000
10.000
0
-10.000
-20.000
Low
(ISCED 1 and 2)
Source: CEDEFOP skills forecast, 2013-2025
Medium
(ISCED 3 and 4)
High
(ISCED 5 and 6)
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Taxation and Skills Activation, Development and
Effective Use
Labour Tax
Wedge
Employment
Skill Levels
Where taxes on labour are too high, it can be too expensive
to hire, and not rewarding enough to work, to up-skill or to
change jobs where skills are rewarded more.
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United States
Austria
Netherlands
Ireland
Belgium
Australia
Sweden
United Kingdom
Spain
France
Finland
Slovenia
Italy
Portugal
Korea
Israel
Poland
Czech Republic
Slovak Republic
Hungary
Chile
Mexico
Overall Spending on Education USD,
adjusted for GDP
Financing Education: total spending on education
(primary, secondary and tertiary education)
14000
12000
10000
8000
6000
4000
2000
0
Participation in job-related adult education varies
Participation in job-related adult education (PIAAC, 2012)
% of adults
Job-related adult education
100
80
60
40
20
0
Source: OECD (2013), OECD Skills Outlook 2013: First Results from the Survey of Adult Skills, OECD Publishing.
Financing and expenditure on Skill systems &
Employment & Skill Levels
Financing &
expenditure on
Skill systems
Employment
Skill Levels
• Create effective, efficient and equitable financing policies.
• Set up financing policies that create strong incentives for all
stakeholders to maximise skills development, activation and
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use.
What is the OECD Skills Strategy?
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OECD Skills Strategy – Developing relevant skills
Developing relevant skills
What skills are relevant
How can skills be developed
effectively (where, when and how)
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OECD Skills Strategy – activating skills supply
Activating skills supply
 How can people be encouraged to
 bring their skills to the labour market
 stay in the labour market
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OECD Skills Strategy – putting skills to effective use
Putting skills to effective use
How can people get into jobs that use their skills
How can employers make better use of skills
How can skills be used in alternative and better ways
(e.g. through innovation, entrepreneurship, freelancing)
How can countries develop more highly-skilled economies
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OECD Skills Strategy – strengthening skills systems
Strengthening skills systems
How to get coherent policy settings -- across portfolios
and levels of government
How to engage all relevant stakeholders
How to ensure that policies are effectively implemented
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OECD Skills Strategy – building national skills strategies
Strategic Approach to Skills Policies – a framework
Building effective skills systems at national and local levels
Facilitating better policy development and
effective implementation
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OECD Skills Strategy country projects underway
2013
NOR
DIAGNOSTIC PHASE
AUT
DIAGNOSTIC PHASE
KOR
DIAGNOSTIC PHASE
PRT
ESP
2015
2014
ACTION PHASE
IMPLEMENTATION
(tbc)
ACTIVE
LEARNING
DIAGNOSTIC PHASE
DIAGNOSTIC PHASE
(tbc)
(tbc)
Guiding principles for National Skills Strategy projects
Strengthening policy coherence on skills
Whole-of-government approach
Engaging all relevant stakeholders




Collaboration between OECD and country
Tailored to country context and priorities
Cross-directorate OECD team
National cross-ministry project team
Challenging perceptions with evidence
Drawing together experience within a country
Learning from international comparisons
Learning from other countries
Better Skills, Better Jobs, Better Lives
For more information, please contact:
Bert BRYS, Ph.D.
Senior Tax Economist
Head Country Tax Policy Team
Head Personal and Property Taxes Unit
Tax Policy and Statistics Division
Centre for Tax Policy and Administration
2, rue André Pascal - 75775 Paris Cedex 16
Tel: +33 1 45 24 15 97 – Fax: +33 1 44 30 63 51
[email protected] || www.oecd.org/tax
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