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This research paper is the fifth in a series produced as part of the Cedefop project The changing nature and role of VET (2016-18). Based on comparative analysis of labour force survey data from 2014, the report analyses the vocational effect on labour market and education outcomes, asking whether any advantages conferred by vocational qualifications in early career would be offset by disadvantages later in life. The report explores the functioning of the safety net and the diversion effects across countries, demonstrating how these vary considerably with the specific institutional structure of schooling and work-based training. The results indicate that VET graduates are potentially sacrificing the longer-term gains associated with further education in favour of short-term benefits. [This research was carried out by a consortium led by 3s Unternehmensberatung GmbH and including the Danish Technological Institute, the Institute of Employment Research (University of Warwick), the Institute of International and Social Studies (Tallinn University) and Fondazione Giacomo Brodolini. The Federal Institute for Vocational Education and Training (BIBB) in Germany is supporting the project as a subcontractor.]

Governments recognise that careers guidance, underpinned by accurate labour market information, can help learners make post-secondary education choices that match their interests, aptitudes and abilities, and lead to rewarding employment. For this reason, they have invested in building linked education/employment information systems and other information resources which are displayed on websites targeted to learners and their families. However, researchers and governments agree that these efforts are often ineffective in informing learners' decisions -- access to information is not sufficient to provide effective support to student choice. Drawing upon the insights of behavioural economics, this paper examines how learners access and use information, and what this implies for the design of public study and career choice websites that aim to effectively support student choice. The report also takes stock of the career guidance websites in use in the majority of OECD countries, and sets out to provide actionable advice for policy makers to guide the design of effective information policy levers that support student choice.

A strong VET system is increasingly seen as essential to overcoming the current economic crisis in Europe. VET is seen as a powerful tool to assist in balancing labour market inefficiencies, increasing youth employment possibilities, and reducing skills mismatch. Its inherent flexibility and closeness to the labour market place VET in a good position to contribute to a faster economic recovery and long-term sustainable development. However, crucial for this role is continuous and systematic VET renewal that assures its relevance for the labour market. This publication explores 15 European national approaches to feedback mechanisms between VET and the labour market. It illustrates the diversity of solutions currently applied across Europe and how they are embedded in national traditions and education philosophy. The study asks three fundamental questions: how inclusive are national mechanisms for feedback between the VET system and the labour market; how responsive are existing mechanisms; and how transparent? Three annexes provide: (1) Case Studies; (2) List of interviewees; and (3) List of experts responsible for the country overviews. Bibliography and references are included. [This paper is the result of a team effort reflecting the work of a research consortium led by Jörg Markowitsch from 3s Research Laboratory who together with Tanja Bacher, Carol Costley, David Etherington, Gerhard Geiger, Günter Hefler, Jelena Helemäe, Triin Roosalu, Ellu Saar, Auni Tamm, and Odd Bjørn Ure conducted the research and fieldwork and drafted the report. This work was carried out under Cedefop's service contract No 2011-0161/AO/ECVL/JB-IPS/Cooperation Labour market--VET/007/11.]

This paper looks at the importance of mechanisms that give formal recognition to vocational skills acquired through work-based learning and how such mechanisms might be developed. It describes how skill recognition can benefit individuals, employers and society as a whole, and identifies in which contexts skill recognition has the highest potential to bring benefits. The focus is on three tools that are commonly used to shorten the path to a formal qualification: admission into a programme, reduced programme duration and qualification without a mandatory programme. For each of these tools, this paper sets out country approaches, discusses common challenges that arise in their implementation and advances policy messages to support policy design and implementation.

This paper presents a comprehensive analysis of the link between age and proficiency in information-processing skills, based on information drawn from the Survey of Adult Skills (PIAAC). The data reveal significant age-related differences in proficiencies, strongly suggesting that proficiency tends to "naturally" decline with age. Age differences in proficiency are, at first sight, substantial. On average across the OECD countries participating in PIAAC, adults aged 55 to 65 score some 30 points less than adults aged 25 to 34 on the PIAAC literacy scale, which is only slightly smaller than the score point difference between tertiary educated and less-than-upper-secondary educated individuals. However, despite their lower levels of proficiency, older individuals do not seem to suffer in terms of labour market outcomes. In particular, they generally earn higher wages, and much of the available empirical evidence suggests that they are not less productive than younger workers. Older and more experienced individuals seem therefore able to compensate the decline in information processing skills with the development of other skills, generally much more difficult to measure. On the other hand, proficiency in information-processing skills remain a strong determinant of important outcomes at all ages: this makes it important to better understand which factors are the most effective in preventing such age-related decline in proficiency, which does not occur to the same extent in all countries and for all individuals. Two broad interventions seem to be particularly promising in this respect. First, it is important to ensure that there is adequate and effective investment in skills development early in the life-cycle: as skills beget skills, starting off with a higher stock of human capital seems also to ensure smaller rates of proficiency decline. Second, it is equally important that policies are in place that provide incentives to individuals (and firms) to invest in skills across the entire working life. In this respect, changes in retirement policies can not only have the short-term effect of providing some reliefs to public finance, but have the potential to radically reshape incentives to stay active, to practice their skills and to invest more in training, thus helping to maintain high levels of proficiency. One table, Age Differences and Age Effects, is appended.

Using the 2012 PIAAC data, our analysis confirms that there are significantly higher earnings and employment returns to "both" increasing levels of formally recognised education, and to increasing levels of numeracy, literacy and information and communication technologies (ICT) skills proficiencies controlling for the level of education. Unsurprisingly, the labour market returns to changes in formally recognised levels of education in general exceed the labour market returns associated with increasing levels of skills proficiency. In the case of literacy and numeracy proficiencies, improved literacy and numeracy skills narrow the labour market outcomes gap between individuals with different levels of formally recognised education, but do not close it completely. The analysis demonstrates more substantial returns to ICT skills. Furthermore, possession of higher levels of ICT skills and lower levels of formally recognised qualification are often associated with higher returns compared to individuals with higher levels of formally recognised education but lower ICT proficiency levels. In other words, ICT skills proficiencies often entirely compensate for lower formally recognised qualifications in the labour market. Contains the following annexes: (1) Country Literacy and Numeracy Profiles; and (2) Demographic Control Variables.

This paper explores the impact of policies and institutions on employment and unemployment of OECD countries in the past decades. Reduced-form unemployment equations, consistent with standard wage setting/price-setting models, are estimated using cross-country/time-series data from 21 OECD countries over the period 1982-2003. In the "average" OECD country, high and long-lasting unemployment benefits, high tax wedges and stringent anticompetitive product market regulation are found to increase aggregate unemployment. By contrast, highly centralised and/or coordinated wage bargaining systems are estimated to reduce unemployment. These findings are robust across specifications, datasets and econometric methods. As policies and institutions affect employment not only via their impact on aggregate unemployment but also through their effects on labour market participation -- particularly for those groups "at the margin" of the labour market, group-specific employment rate equations are also estimated. In the "average" OECD country, high unemployment benefits and high tax wedges are found to be associated with lower employment prospects for all groups studied, namely prime-age males, females, older workers and youths. There is also evidence that group-specific policy determinants matter, such as targeted fiscal incentives. The paper also finds significant evidence of interactions across policies and institutions, as well as between institutions and macroeconomic conditions. Consistent with theory, structural reforms appear to have mutually reinforcing effects: the impact of a given policy reform is greater the more employment-friendly the overall policy and institutional framework. Certain more specific interactions across policies and institutions are found to be particularly robust, notably between unemployment benefits and public spending on active labour market programmes as well as between statutory minimum wages and the tax wedge. Finally, it is shown that macroeconomic conditions also matter for unemployment patterns, with their impact being shaped by policies. (A bibliography is included. Contains 144 footnotes, 9 figures, 3 boxes and 27 tables.)

This working paper assesses the ease of immigrants' integration in OECD labour markets by estimating how an immigration background influences the probability of being active or employed and the expected hourly earnings, for given individual characteristics. Applying the same methodology to comparable data across twelve OECD countries, immigrants are shown to significantly lag behind natives in terms of employment and/or wages. The differences narrow as years since settlement elapse, especially as regards wages, reflecting progressive assimilation. Strong differences in immigrant-to-native gaps are also observed across countries, and the paper shows that they may, to a significant extent, be explained by differences in labour market policies, in particular unemployment benefits, the tax wedge and the minimum wage. In addition, immigrants are shown to be overrepresented among outsiders in the labour market and, as such, highly sensitive to the difference in employment protection legislation between temporary and permanent contracts. (Contains 36 footnotes, 1 figure and 10 tables.)

This paper examines policies regarding access to social benefits and the labor market in nine representative liberal industrialized democracies. Five are self-consciously nations of immigration: the United States, Canada, Australia, Israel, and France. Four are de-facto immigration nations within the European Union (EU): Germany, the Netherlands, Austria, and Britain. The countries reflect substantial variation in size and character of immigration flows, as well as differing regimes of access to both the social welfare state and labor market and approaches to granting citizenship. This analysis focuses on legal or tolerated immigrants. After section 1, "Introduction," section 2, "Access to Public Benefits: General Policy Trends," discusses the path to permanent status; rationing benefits by citizenship in the United States, Austria, and Britain; indirect bars to benefits; restrictions to contributory benefit programs; and whether rationing by citizenship makes good policy. Section 3, "Rationing Access to the Labor Market on the Basis of Citizenship," discusses public sector employment, private sector employment, and self-employment. Section 4 focuses on "Is Citizenship Enough? Antidiscrimination Policies." Section 5, "Policy Recommendations," offers five recommendations. An appendix presents summary tables (benefit eligibility by country). (Contains 63 references.) (SM)

This volume presents reports on the flows of graduates from higher education and on their entry into working life in Germany, Austria, Belgium, and Australia. Each paper is written according to detailed guidelines designed to assemble information from many sources, to reflect the state of the art, and to illustrate a variety of approaches, methodologies and philosophies. The paper on Germany by Manfred Tessaring describes changes in the past two decades, the higher education system in Germany, employment and unemployment, the changing input and output of higher education, graduate transition to employment and concluding thoughts. An appendix contains 11 tables of statistics. The report on Australia by Bruce Williams primarily describes employment prospects for graduates there. The paper on Austria is in two parts. The first, "Developments in Higher Education and the Changing Transition to the Labour Market," was written by Lorenz Lassnigg, Susanne Loudon and Hannes Spreitzer. The second part by Klaus Schedler is titled "Employment and Labour Market Prospects of University Graduates in the Austrian Trade and Industry." The report on Belgium is in French and was written by Andre Bonte. Extensive tables and figures illustrate all the studies. (JB)