Tertiary education: The gift that keeps on giving

The data on earnings in Education at a Glance 2014 point to a widening gap between the educational ‘haves’ and ‘have-nots’. Across OECD countries, the difference in income from employment between adults without upper secondary education and those with a tertiary degree continues to grow.

If we consider that the average income for 25-64 year-olds with an upper secondary education is represented by an index of 100, the income level for adults without upper secondary education was 80 in 2000 and fell to 76 in 2012, while the average income of tertiary-educated adults increased from 151 in 2000 to 159 in 2012.

These data also show that the relative income gap between mid-educated and highly educated adults grew twice as large as the gap between mid-educated and low-educated adults. This means that, in relative terms, mid-educated adults moved closer in income to those with low levels of education, which is consistent with the thesis of the 'hollowing-out of the middle classes'.

Changes in the income distribution towards greater inequality are increasingly determined by the distribution of education and skills in societies. Across OECD countries, 73% of people without an upper secondary education find themselves at or below the median level of earnings, while only 27% of university graduates do.

Educational attainment is the measure by which people are being sorted into poverty or relative wealth; and the skills distribution in a society – its inclusiveness, or lack thereof – is manifested in the degree of income inequality in the society.

Countries with large proportions of low-skilled adults are also those with high levels of income inequality, as measured by the Gini coefficient, as are countries with a polarised skills profile – that is, many low-skilled and many high-skilled people, and the skills distribution is usually linked to socio-economic background.

The risks – and, in many instances, also the penalties – of low educational attainment and low skills pertain not only to income and employment, but to many other social outcomes as well. For example, there is a 23 percentage-point difference between the share of adults with high levels of education who report that they are in good health and the share of adults with low levels of education who report so.

Levels of interpersonal trust, participation in volunteering activities, and the belief that an individual can have an impact on the political process, are all closely related to both education and skills levels. Thus, societies that have large shares of low-skilled people risk deterioration in social cohesion and well-being.

When large numbers of people do not share the benefits that accrue to more highly skilled populations, the long-term costs to society – in healthcare, unemployment and security, to name just a few – accumulate to become overwhelming.

Indeed, the increasing social divide between the educational ‘haves’ and ‘have-nots’ – and the risks that the latter are excluded from the social benefits of educational expansion – threaten societies as a whole. In the past, countries were predominantly concerned with raising their average level of human capital without paying much attention to the way education and skills were distributed across the population.

Of course, improving the general level of educational attainment and skills in a population is necessary for economic growth and social progress. But, as more developed countries move towards higher levels of education and skills, aggregate measures of human capital seem to lose their ability to explain differences in economic output between countries.

Analysis of data from the Survey of Adult Skills shows that when people of all skills levels benefit from greater access to education, so do economic growth and social inclusion. Countries with small shares of low-skilled adults and large shares of high-skilled adults – that is, countries with a higher degree of inclusiveness in their skills distribution – do better in terms of economic output and social equality than countries with a similar average level of skills but with larger differences in skills proficiency across the population.

Education and skills have thus become increasingly important dimensions of social inequality; but they are also an indispensable part of the solution to this problem. Education can lift people out of poverty and social exclusion, but in order to do so, educational attainment has to translate into social mobility.

Maybe the biggest threat to inclusive growth is the risk that social mobility could grind to a halt. Comparing our cross-sectional data over age groups seems to confirm that across OECD countries this risk is real.

In the countries that participated in the Survey of Adult Skills in 2012, 39% of 35 to 44 year-old adults, on average, had a tertiary qualification. Their parents’ educational background had a strong influence on the likelihood that they too would acquire a tertiary degree: 68% of the adults with at least one tertiary-educated parent had also attained a tertiary education; while only 24% of adults whose parents had not attained an upper secondary education had a tertiary degree.

But among the younger age group (25 to 34 year-olds), where the tertiary attainment rate had risen to 43%, the impact of parents’ educational background was just as strong: of the adults with at least one tertiary-educated parent, 65% attained a tertiary qualification; while of the adults with low-educated parents, only 23% did.

In other words, the benefits of the expansion in education were shared by the middle class, but did not trickle down to less-advantaged families. In relative terms, the children of low-educated families became increasingly excluded from the potential benefits that the expansion in education provided to most of the population.

And even if they were able to access education, the interplay between their disadvantaged background and the lower quality of education that these students disproportionately endure, resulted in the kinds of education outcomes that did not help them to move up the social ladder.

Inclusive societies need education systems that promote learning and the acquisition of skills in an equitable manner and that support meritocracy and social mobility. When the engine of social mobility slows down, societies become less inclusive.

Even at a time when access to education is expanding, too many families risk remaining excluded from the promises of intergenerational educational mobility. On average across the countries that participated in the Survey of Adult Skills, upward mobility (the percentage of the population with higher educational attainment than their parents) is now estimated at 42% among 55 to 64 year-olds and 43% among 45 to 54 year-olds, but falls to 38% among 35 to 44 year-olds and to 32% among 25 to 34 year-olds.

Downward educational mobility increases from 9% among 55 to 64 year-olds and 10% among 45 to 54 year-olds, to 12% among 35 to 44 year-olds and 16% among 25 to 34 year-olds. These data suggest that the expansion in education has not yet resulted in a more inclusive society, and we must urgently address this setback.

OECD averages can be misleading in that they hide huge differences among countries. In this edition of Education at a Glance, the most interesting findings may not be the averages across OECD countries, but the way the indicators highlight the differences among countries.

These variations reflect different historical and cultural contexts, but they also demonstrate the power of policies. Different policies produce different outcomes, and this is also true with regard to education and skills.

Some countries do better than others in breaking the cycle of social inequality that leads to inequality in education, in containing the risk of exclusion based on education and skills, and in keeping the proportion of low-skilled adults small while providing opportunities to as many adults as possible to improve their skills proficiency.

Education and skills hold the key to future wellbeing and will be critical to restoring long-term growth, tackling unemployment, promoting competitiveness, and nurturing more inclusive and cohesive societies. This large collection of data on education and skills helps countries to compare and benchmark themselves, and will assist them in identifying policies that work.

* Ángel Gurría is secretary-general of the OECD. This is an edited version of an editorial that opens the report Education at a Glance 2014. Readers can see further extracts from the report in this OECD section.