The OECD Skills Strategy Better skills, better jobs, better lives Bert Brys Senior Tax Economist, CTP/OECD LAC Fiscal Forum June 2015

OECD Skills Strategy (2012) 2 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

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)

4 What is the OECD Skills Strategy?

5 Skill levels vary considerably across countries Source: OECD, Survey of Adult Skills 2012 Adult Mean Numeracy Skills by Proficiency Levels (PIAAC, 2012)

Skills vary across levels of educational attainment and across OECD countries Source: OECD (2013), PISA 2012 Results: What Makes Schools Successful? Resources, Policies and Practices (Volume IV), PISA, OECD Publishing. Mean literacy score of year olds, by educational attainment (PIAAC, 2012)

Evolution of the employment-to-population ratio Percentage of the working-age population (aged 15 or more)

Labour productivity and labour resource utilisation differ considerably across the OECD

9 Low Skills – High (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

A large % of Chilean and Mexican youth is NEET: neither employed nor in education nor in training Source: OECD (2014), Education at a Glance 2014, OECD Publishing. NEET population among 15 to 29 year-olds (2012)

11 Linkages between Skill Development and Skill Activation Labour Market Participation More years in the labour force - more time to earn back the cost of upskilling Skills Levels Higher skills - more incentives to keep working

Use of Skills at Work Use of Skills at Work (PIAAC, 2012)

The demand for skills is changing 13 Levy and Murnane

New technologies and work practices are transforming workplaces 14 Percentage of workers who reported changes in their current workplace during the previous three years that affected their work environment

15 High level skills will be in high demand Job opportunities in EU 28 by qualification levels, forecast (baseline scenario, 000s) (ISCED 1 and 2) (ISCED 5 and 6) (ISCED 3 and 4) Source: CEDEFOP skills forecast,

16 Taxation and Skills Activation, Development and Effective Use Employment Labour Tax Wedge 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.

Financing Education: total spending on education (primary, secondary and tertiary education)

Participation in job-related adult education varies Source: OECD (2013), OECD Skills Outlook 2013: First Results from the Survey of Adult Skills, OECD Publishing. Participation in job-related adult education (PIAAC, 2012) % of adults

19 Financing and expenditure on Skill systems & Employment & Skill Levels Employment Financing & expenditure on Skill systems 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 use.

20 What is the OECD Skills Strategy?

OECD Skills Strategy – Developing relevant skills 21 Developing relevant skills What skills are relevant How can skills be developed effectively (where, when and how)

OECD Skills Strategy – activating skills supply 22 Activating skills supply How can people be encouraged to bring their skills to the labour market stay in the labour market

OECD Skills Strategy – putting skills to effective use 23 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

OECD Skills Strategy – strengthening skills systems 24 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

25 OECD Skills Strategy – building national skills strategies Building effective skills systems at national and local levels Strategic Approach to Skills Policies – a framework Facilitating better policy development and effective implementation

2013 ACTIVE LEARNING (tbc) DIAGNOSTIC PHASE ACTION PHASE NOR AUT KOR PRT IMPLEMENTATION ESP (tbc) OECD Skills Strategy country projects underway DIAGNOSTIC PHASE

Collaboration between OECD and country Tailored to country context and priorities Cross-directorate OECD team National cross-ministry project team Guiding principles for National Skills Strategy projects Strengthening policy coherence on skills Whole-of-government approach Engaging all relevant stakeholders Challenging perceptions with evidence Drawing together experience within a country Learning from international comparisons Learning from other countries Better Skills, Better Jobs, Better Lives

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 Paris Cedex 16 Tel: – Fax: || For more information, please contact: 28