Tertiary enrolment exploding but benefits vary – OECD

Tertiary enrolment is expanding rapidly, with very strong returns for individuals and taxpayers, but new evidence shows that universities can fail to offer, and individuals fail to pursue, the fields of study that promise the greatest labour market opportunities, according to a new OECD report.

“More guidance and support must be provided to young students as they select their future careers,” said Angel Gurria, OECD secretary-general. “Young people need to find the right balance of personal interests, potential social and economic outcomes, and the skills they can expect to develop in the selected education programmes that will carry them through their lives.”

Education at a Glance 2017 includes for the first time in-depth analysis of the subjects students take at vocational and tertiary level. It finds that business, administration and law are the most popular careers in countries surveyed, chosen by around one in four students.

This compares to 17% studying engineering, construction and manufacturing, and less than 5% of students studying information and communication technologies or ICT, despite graduates in these subjects having the highest employment rate on average across OECD countries, exceeding 90% in about a third of them.

The report found that 5% of tertiary students study natural sciences, statistics and mathematics. But interest in science, technology, engineering and mathematics or STEM subjects grows with higher levels of education, with almost double the share of students graduating from these fields at doctoral level than in bachelor’s level in 2015.

These fields are also favoured among international tertiary students, with the highest share, almost one-third of those studying in OECD countries, doing so in a science-related field.

STEM-related fields also benefit from higher employment rates, reflecting the demands of an increasingly innovation-driven society. ICT graduates can expect an employment rate that is seven percentage points higher than those graduating from arts and humanities, or from social sciences, journalism and information, the report says.

However, employment rates within science-related fields are unequal: natural sciences, mathematics and statistics graduates are more likely to have similar employment rates to arts and humanities graduates – both lower than the rates enjoyed by engineers or ICT specialists.

Overall, adults with a tertiary degree benefit from substantial returns on their investment: they are 10% more likely to be employed, and will earn 56% more on average than adults who only completed upper secondary education, the report says.

They are also the first to recover from economic downturns. Employment rates for young adults with tertiary degrees have returned to pre-crisis levels, while rates for those who did not complete upper secondary education are still lagging behind.

They are also less likely to suffer from depression than their less-educated peers.

“Tertiary education promises huge rewards for individuals, but education systems need to do a better job of explaining to young people what studies offer the greatest opportunities for life,” said Gurria. “Equitable and high-quality education fuels personal fulfilment as well as economic growth. Countries must step up their efforts to ensure that education informs their aspirations for the future.”

While the life chances of the better educated are rising, those who are left behind pay an increasing price, in terms of worsening employment and low wages. Some 43% of 25- to 34-year-olds in the OECD had a tertiary degree in 2016, up from 26% in 2000.

Progress towards Sustainable Development Goals

This year’s edition of Education at a Glance also assesses where OECD and partner countries stand on their way to meeting the Sustainable Development Goals for education by 2030.

For some targets, the disparities across OECD countries are substantial. On average over the past 12 months, OECD and partner countries have achieved gender parity in the participation rate of adults in formal and non-formal education programmes and training.

However, this result masks one of the largest variations among all gender parity indicators, with the ratio of women to men participating in such programmes in the past 12 months ranging between 0.7 and 1.4 across countries.

“The persistent differences in the way men and women select their future careers are disturbing,” Gurria says.

Women still represent approximately only one in four entrants to engineering, manufacturing and construction. On the other hand, they represent close to three of four entrants to health and welfare fields of study. Other fields, such as business administration and law, and natural sciences, mathematics and statistics, have almost achieved gender parity among new recruits.

Men are falling behind in the share of entrants into tertiary education in almost all OECD countries, with this trend set to continue in the future. The first-time entry rate to tertiary education for women under 25 is 11% higher on average than for men.

Education spending increasing

Expenditure has been increasing at a higher rate than student enrolments at all levels, particularly tertiary expenditure since 2010. OECD countries spend on average US$10,759 per year per student on education institutions from primary to tertiary education: US$8,733 per primary student, US$10,235 per lower secondary student, US$10,182 per upper secondary student and US$16,143 per tertiary student.

Spending on primary to tertiary education institutions relative to gross domestic product or GDP reached 6% or more in Canada, Denmark, Iceland, South Korea, New Zealand, Norway, the United Kingdom and the United States.

At the other end of the spectrum were the Czech Republic, Hungary, Indonesia, Luxembourg, the Russian Federation and the Slovak Republic, which spent less than 4% of GDP on education.

Across OECD countries, total public spending on primary to tertiary education averages 11.3% of total government expenditure, ranging in OECD and partner countries from less than 8% in the Czech Republic, Hungary, Italy and the Russian Federation to at least 16% in Brazil, Costa Rica, Indonesia, Mexico, New Zealand and South Africa.