Connect with us

Reports

Education critical to build a more resilient society

Published

on

The COVID-19 crisis has exposed the many inadequacies and inequities in education systems around the world. As governments start rebuilding their economies and people’s livelihoods, it is critical that long-term public spending on education remain a priority to ensure that every young person has the same opportunity to continue education, succeed at school and develop the skills they need to contribute to society, according to a new OECD report.

Education at a Glance 2020, together with an accompanying brochure analysing the impact of the crisis, warns that, while there is uncertainty about the overall impact of the COVID-19 pandemic on education expenditure, governments may face difficult decisions on the allocation of public funds as economic growth slows, tax incomes decline and healthcare and welfare costs rise. In 2017, total public expenditure on primary to tertiary education as a percentage of total government expenditure was 11% on average across OECD countries, with the share ranging from around 7% in Greece to around 17% in Chile.

“Strengthening education systems needs to be at the heart of government planning to recover from this crisis and give young people the skills and competencies they need to succeed,” said OECD Secretary-General Angel Gurría, launching the report in Paris. “It’s critical that every effort be made to ensure that the crisis does not exacerbate the inequalities in education that have been revealed in many countries. The current crisis has tested our ability to deal with large-scale disruptions. It is now up to us to build as its legacy a more resilient society.”

The crisis has hit the vocational and education training (VET) sector particularly hard. This is a major concern, according to the report, as many of the professions that formed the backbone of economic and social life during the lockdown hinge on vocational qualifications.

On average across OECD countries, young adults today are less likely to attain an upper secondary vocational path than their parents were and more likely to pursue an academic university degree. Earnings are also lower: adults with an upper secondary vocational qualification have similar earnings to those with an upper secondary general qualification, but they earn 34% less than tertiary-educated adults on average across OECD countries.

Governments should step up their efforts to make vocational education and vocational qualifications more attractive to young people. This should include enhancing work-based learning and strengthening ties with the private sector. Currently, only one third of upper secondary vocational students take part in combined school and work-based programmes on average across OECD countries.

Making it easier for students to move from vocational to higher education is also key and can improve learning outcomes. Upper secondary vocational students are more likely to complete their qualification when the programme provides access to tertiary education than when it does not. Today, almost seven in ten students are enrolled in programmes that, in theory, enable them to progress to higher degrees.

The crisis has also raised concerns around the value proposition of higher education institutions, with students reluctant to commit large amounts of time and money when much of the course work is only available online. This may affect international student mobility as students question the very value of obtaining a degree abroad. 

Any decline in enrolment of international students for the next academic year will hit the core education services universities offer, but also will indirectly affect the financial support they provide to domestic students, as well as research and development activities. While international students represent 6% of tertiary students on average across OECD countries, they represent 20% or more in Australia, Luxembourg and New Zealand. International student mobility is particularly high at doctoral level, where one out of five students on average travels abroad to earn their degree. To remain relevant, universities will need to reinvent learning environments so that digitalisation expands and complements, but does not replace, student-teacher and student-student relationships.

Education at a Glance provides comparable national statistics measuring the state of education worldwide. The report analyses the education systems of the OECD’s 37 member countries, as well as of Argentina, Brazil, China, Costa Rica, India, Indonesia, the Russian Federation, Saudi Arabia and South Africa.

Continue Reading
Comments

Reports

People are increasingly worried about inequalities but divided on how to address them

Published

on

Photo: Arno Senoner/Unsplash

For a recovery from the COVID-19 crisis that is strong, sustainable but also fair, it will be key to tackle inequalities and promote equal opportunities. Yet while there is growing consensus that inequality is a problem, people are increasingly divided about its extent and what to do about it, according to a new OECD report.

Does Inequality Matter? says that most people are concerned about inequality. Four in five people in the OECD feel income disparities are too large in their country. People care about inequality of both outcomes and opportunities, as they perceive high income and earnings disparities as well as low social mobility. Moreover, concern over income and earnings disparities has risen in the last three decades, in line with the increase in income inequality.

People’s perceptions are not disconnected from reality. Along the lines of observed trends in income inequality, people believed, on average, that top earners earned 5 times as much as bottom earners in the late 1980s/early 1990s, while this perceived top-to-bottom earnings ratio has increased to 8 today, after having reached a peak of 10 during the Great Recession. Tolerance for inequality has also increased, though by less. Today people believe, on average, that top earners should earn 4 times as much as the bottom earners, up from 3 times in the late 1980s.

More than 6 out of 10 OECD citizens believe their government should do more to reduce income differences between rich and poor with taxes and transfers. The more people are concerned about inequality and perceive low social mobility, the higher their demand for redistribution.

However, beliefs about effectiveness of policies and determinants of inequalities matter. People are less likely to demand more redistribution if they believe that benefits are mistargeted, and they are less in favour of progressive taxation if they believe that corruption is widespread among public officials, prompting the misuse and misallocation of public benefits.

Demand for more progressive taxation is also lower where people believe that disparities are justified by differences in personal effort, rather than to circumstances beyond people’s control. For example, in 2018 in Poland 25% of people believe poverty is due to lack of effort rather than injustice or bad luck and 54% demand more progressive taxation, while in Germany that figure is 4% and 77%, respectively.

Yet, despite most people being concerned about inequality, they have strongly different beliefs about its extent and what to do about it. Within the average OECD country, one fourth of people thinks that more than 70% of the national income goes to the 10% richest households, contrary to another fourth who think that less than 30% goes to the richest households.

Furthermore, the large heterogeneity of people’s views on inequalities has grown in the last three decades, even among people with similar socio-economic characteristics. There is evidence of growing polarization: in most OECD countries there is an increasing gap between those who believe inequality is high and those who believe it is low. More unequal countries have a more divided public opinion: in Chile and the United States – two among the most unequal OECD countries – the perceptions about the extent of the top richest 10% shares diverge the most.

Continue Reading

Reports

Data show how the COVID-19 pandemic has hit all aspects of people’s well-being

Published

on

The COVID-19 pandemic has not only had devastating effects on physical health and mortality but has touched every aspect of people’s well-being, with far-reaching consequences for how we live and work, according to a new study by the OECD.

 COVID-19 and well-being: life in the pandemic says the virus caused a 16% increase in the average number of deaths across 33 OECD countries between March 2020 and early May 2021, compared with same period over the previous four years. Over the same time frame, survey data in the report reveal rising levels of depression or anxiety and a growing sense among many people of loneliness and of feeling disconnected from society.

 Government support helped to sustain average household income levels in 2020 and stemmed the tide of job losses, even as average hours worked fell sharply. Although job retention schemes offered workers some protection, 14% of workers in 19 European OECD countries felt it was “likely they would lose their job” within three months, and nearly 1 in 3 people in 25 OECD countries reported financial difficulties.

 The report says experiences of the pandemic have varied widely depending on age, gender and ethnicity, as well as on the type of job people do and on their level of pay and skills. The crisis also aggravated existing social, economic and environmental challenges.

 In those countries with available data, workers from ethnic minorities have been more likely to lose their jobs during the pandemic. Mental health deteriorated for almost all population groups on average in 2020 but gaps in mental health by race and ethnicity are also visible. COVID-19 mortality rates for some ethnic minority communities have been more than twice those of other groups.

 Younger adults experienced some of the largest declines in mental health, social connectedness and life satisfaction in 2020 and 2021, as well as facing job disruption and insecurity.

 Launched on the first anniversary of the new OECD Centre for Well-being, Inclusion, Sustainability and Equal Opportunity (WISE), the report offers a primer for OECD recommendations on well-being. It assesses the impact of the pandemic across the 11 dimensions identified in the OECD’s Well-being Framework – income and wealth; work and job quality; housing; health; knowledge and skills; environment; subjective well-being; safety; work-life balance; social connections; and civil engagement. It features data on inclusion and equality of opportunity, and also considers how the stocks of economic, human, social and environmental resources that sustain well-being have fared.

 The report argues that as governments move from emergency support to stimulating the recovery, they need to refocus their action on what matters most to people’s well-being.

 A key objective must be to increase the job and financial security of households, and particularly those most affected by the crisis – with a focus on the most vulnerable, on youth, women and the low skilled.  Addressing the burden of poor physical and mental health and a cross-government approach to raising the well-being of the most disadvantaged children and youth must also be prioritised. The report also stresses that actions to raise living standards and equality of opportunity must take place within the context of greening the economy: the climate and biodiversity crises, like the pandemic, require a coordinated response across public policy.

 A well-being approach, the report explains, looks at government objectives as interconnected goals, focusing on how different policies can complement each other. Such an approach encourages decision-making that simultaneously considers impacts on current well-being, inclusion, and the sustainability of well-being over time. For instance, improving long-term economic opportunities through raising child well-being, or aligning efforts to combat climate change with social and economic objectives by increasing employment and mobility for people and places left behind.

 Natural, human and social capital will need rebuilding after the crisis, the report adds. Reducing inequalities in access to, and uptake of lifelong learning, for example, will help people – especially the disadvantaged – get high quality jobs by developing training programmes that address skills gaps and emphasise digital abilities.

 Social capital – the norms, shared values and institutions that foster co-operation – has shaped communities’ responses to the pandemic. Data from across OECD countries shows that both trust in institutions and interpersonal trust influenced the effectiveness of pandemic containment. Although it has recently shown signs of weakening, institutional trust in 2020 in most OECD countries was at its highest since records began in 2006.

 The report says reinforcing trust is key to reconnecting people to their societies, and to the institutions that are meant to support them. By doing so, the well-being of citizens is improved both today and in a post-pandemic future.

Continue Reading

Reports

Inflation Concerns Push Up Emerging East Asia Bond Yields

Published

on

Emerging East Asia’s bond market grew 3.4% in the third quarter to $21.7 trillion, although rising global inflation and a shift in the United States (US) monetary stance weakened regional financial conditions, according to the latest issue of the Asia Bond Monitor.

Bond yields rose, currencies weakened, and risk premiums edged up amid increased global inflation and the US Federal Reserve’s announcement that it would limit bond purchases starting in November, according to the report, released today by the Asian Development Bank (ADB).

“The encouraging macroeconomic outlook and accommodative policy stances are supporting the region’s financial conditions,” said ADB Acting Chief Economist Joseph Zveglich, Jr. “However, central banks in the region may find they need to be less accommodative to keep inflation in check and to keep in step with US monetary policy changes. That said, the chance of another ‘taper tantrum’ is limited as the direction of the Federal Reserve’s stance is clearly communicated and the region’s economic fundamentals remain strong.”

Emerging East Asia comprises the People’s Republic of China (PRC); Hong Kong, China; Indonesia; the Republic of Korea; Malaysia; the Philippines; Singapore; Thailand; and Viet Nam. 

Government bonds remained the dominant segment, increasing 3.9% from the previous quarter to $13.6 trillion. The bond markets of the Association of Southeast Asian Nations (ASEAN) members—many of which suffered from the coronavirus disease’s (COVID-19) Delta variant outbreak—grew 14.4% from a year earlier to $1.9 trillion in the third quarter, compared with 12.6% and 7.6% growth in the PRC and the Republic of Korea, respectively.

ASEAN bond markets showed sound market capacity during the pandemic, evident in low bond yields amid rapid market expansion. Domestic financial institutions, particularly banks, anchored bond market functioning. At the same time, a few ASEAN central banks facilitated market liquidity and government financing via asset purchasing programs. Mid- and long-term bonds account for a majority of outstanding bonds in ASEAN bond markets, implying a relatively stable financing structure.

Sustainable bond markets in the ASEAN region plus the PRC; Hong Kong, China; Japan; and the Republic of Korea totaled $388.7 billion, remaining the largest regional sustainable bond market after Europe and accounting for 19.2% of global sustainable bond markets at the end of September. Green, social, and sustainability bonds accounted for 71.6%, 13.0%, and 15.3% of the region’s sustainable bonds outstanding, respectively. As this regional market develops, the issuer base is also diversifying from just the financial sector to other business sectors.

The latest issue of the Asia Bond Monitor analyzes the price and yield differences between labeled and unlabeled green bonds. Recent research finds that investors would pay more for labeled or certified green bonds that have better information disclosure and lower reputational risk.

The report also discusses how the Delta variant outbreak and uneven vaccination progress slowed and caused divergences in regional economic recovery; the likelihood of a “taper tantrum” repeat; and risks to the current outlook, including continuing pandemic-induced uncertainty, slow vaccination rollouts in developing countries, and supply chain disruptions.

Continue Reading

Publications

Latest

Reports1 hour ago

People are increasingly worried about inequalities but divided on how to address them

For a recovery from the COVID-19 crisis that is strong, sustainable but also fair, it will be key to tackle...

business-technology business-technology
Tech News3 hours ago

Industrial innovation to accelerate transitions towards greener and digital economies

In the context of the 8th European Conference on Corporate R&D and Innovation (CONCORDI), 2021 – Industrial innovation for competitive sustainability,...

Reports5 hours ago

Data show how the COVID-19 pandemic has hit all aspects of people’s well-being

The COVID-19 pandemic has not only had devastating effects on physical health and mortality but has touched every aspect of...

Reports8 hours ago

Inflation Concerns Push Up Emerging East Asia Bond Yields

Emerging East Asia’s bond market grew 3.4% in the third quarter to $21.7 trillion, although rising global inflation and a...

Tourism9 hours ago

New COVID-19 Surges Keep Travel Restrictions in Place

One out of five destinations continue to have their borders completely closed as new surges of COVID-19 impact the restart...

East Asia11 hours ago

Summit for Democracy Attempts to Turn Multicolor Modern World into Black and White Divisions

One of the most important takeaways from the recent sixth plenary session of 19th CPC Central Committee is that Beijing...

East Asia13 hours ago

The Chinese diplomatic force in the IAEA to confront Western leadership

At the level of international relations, through China’s presence in all the relevant international organizations, and its membership in all...

Trending