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OECD Perspectives: Higher Education key to a more fulfilling career and life

OECD - Karine Tremblay and Patricia Mangeol

- Education

- Oct 3 2014

Once a privilege of the elites, higher education has faced a significant democratisation process over the past two generations, and even become a mass phenomenon in several OECD countries.

Today, nearly twice as many young adults (aged 25-34) are tertiary-educated compared to their parents’ generation 30 years ago (aged 55-64). If we were to look up at their grand-parents’ generation, the wave of the higher education attainment growth would look like a tsunami.

Chart 1: 25-24 and 55-64 year-olds with tertiary education, and percentage point difference between these groups (indicated by purple bars)

A positive tsunami though, as governments like individuals around the world acknowledge the importance of high-level skills to boost economic growth, career prospects and prosperity in today’s knowledge economies. And while a higher education degree does not systematically translate into high-level skills (i.e. proficiency levels 4 or 5 out of the 5-point scale of the OECD Survey of Adult Skills), tertiary-educated adults are on average more likely to display those high-level skills, which pay off in terms of earnings. Adults with a tertiary degree earn 75% more compared to workers who have only completed upper secondary education or post-secondary non-tertiary education, on average across the OECD. This holds true for both men and women.

Chart 2: Mean monthly earnings, by educational attainment and literacy proficiency level

Despite variations across fields of study, higher education is still the best protection against unemployment. The employment rate of tertiary-educated workers is 28 percentage points higher than those with less than an upper-secondary degree. Tertiary graduates are also more likely to be employed full-time – 74% of them are, compared to only 64% for employed adults with less than an upper-secondary degree.

Of course, while good jobs and personal income are important components of one’s well-being, this is not all that matters. For more than a decade now, the OECD has worked on approaches to measure quality of life beyond traditional economic indicators. Interestingly, data from the OECD Survey of Adult Skills show that people who have completed higher education not only obtain better employment prospects and higher earnings, but they also benefit from a range of other social outcomes such as a better health, higher levels of political efficacy and trust in others, and a greater propensity to engage in volunteer activities – all factors which research has shown are key elements of happiness and well-being. 

Chart 3: Various social outcomes, by educational attainment and literacy proficiency level

While there are many positive economic and social outcomes of attending and completing higher education, the distribution of these opportunities is another important component of well-being, and one where further progress is needed in most OECD countries. Indeed, higher education participation has democratised from the elites to the middle classes over the past decades, but social mobility has not yet trickled down to the most disadvantaged. OECD data show that across countries with available data, a youngster with at least one tertiary-educated parent is 4.5 times more likely to participate in tertiary education than one whose parents have attained below upper secondary education only.

There are many factors behind this lower participation of disadvantaged students in higher education. PISA studies have shown that these students tend to achieve lower performance at the school level and may be less prepared for higher education studies. The cost of higher education – which includes not only tuition fees but also living costs and indirect costs such as foregone earnings – can also be a problem. And even when adequate loan and grant schemes exist to cover some of these costs, underprivileged students may be deterred from attending in case no provision exists to write off debt whenever higher education does not generate positive returns.

Recent trends suggest that the employment and earnings benefits of higher education have become more volatile with the crisis, as higher education graduates have been severely hit in some countries. Meanwhile governments facing fierce budgetary constraints are pushing for higher tuition fees. In this context, the persisting socio-economic divide in accessing higher education is unlikely to be filled unless proactive policies are adopted to ensure students from disadvantaged backgrounds have the right information and support to make good choices for their future.

Finding a way out of the crisis in economies where knowledge is the main engine of growth will require maximising the economy’s skill potential. To do this, tackling equity issues in higher education is critical so that countries have a larger pool of qualified workers – and to ensure these workers can adapt and thrive in a fast-changing environment. Beyond economic prosperity, providing access to the well-being benefits of higher education to broader segments of the population should be an added motivation!

Karine Tremblay and Patricia Mangeol
Respectively Senior Analyst and Analyst in the Directorate for Education and Skills

About the OECD: The Organisation for Economic Co-operation and Development (OECD) is a global economic policy forum. It provides analysis and advice to its 34 member governments and other countries worldwide, promoting better policies for better lives.

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OECD Perspectives: Higher Education key to a more fulfilling career and life

Once a privilege of the elites, higher education has faced a significant democratisation process over the past two generations, and even become a mass phenomenon in several OECD countries.

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