How the world reported the OECD skills survey

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Click to find out more

“The French are useless.” Not our opinion, but the response of Le Monde (paywall) to the release on Tuesday of results from the OECD’s adult skills survey, which placed adults in France in the bottom half of around 20 countries in assessments of literacy, numeracy and problem-solving using digital devices.

The Paris newspaper wasn’t the only one wringing its hands: Media outlets and commentators around the world took time to weigh the results of the OECD survey, finding reasons to lament – or celebrate – the results.

Despite its own gloomy verdict, Le Monde took some comfort from the results, noting that younger adults in France had generally done better in the survey than their older counterparts: “That’s a sign that the country has made a big effort and is making progress,” it concluded.

The same can’t be said for the United Kingdom, according to Richard Lambert, a university chancellor. Writing in the Financial Times, he said rates of literacy and numeracy among younger adults in England and Wales are only around the same as those of older adults. That’s unusual: In most developed countries, young people today usually spend more time in education than their parents and grandparents did, so literacy and numeracy levels tend to rise over time. But not, it seems, in the U.K. The result, wrote Mr Lambert, is that “young adults are entering a much more demanding and competitive labour market no better prepared to cope than those who are retiring.”

On the other side of the Atlantic, the mood was also downbeat. “U.S. Adults Fare Poorly in a Study of Skills,” reported The New York Times, which quoted education secretary Arne Duncan as saying that the findings “show our education system hasn’t done enough to help Americans compete …”.

But the Times noted a possible question mark over the U.S. showing: “If we’re so dumb, why are we so rich?” asked Anthony Carnevale of the Georgetown University Centre on Education and the Workforce. Answering his own question, he argued that the U.S.’s economic advantage has traditionally come from having “high skill levels at the top, being big, being more flexible than the other economies, and being able to attract other countries’ most skilled labour.” But, he warned “that advantage is slipping.”

The results for the U.S. highlighted another puzzle: As there’s such a big gap in the U.S. between pay for low- and high-skilled workers, shouldn’t that encourage more people to develop their abilities and so raise their incomes? In theory, it should; in practice, it doesn’t appear to be happening. Why? According to Eduardo Porter, also in the Times, there aren’t enough opportunities for either children and adults to do some quality learning: “Schools do not appear to be adding much value,” he wrote. “Nor do employers, which do little to train workers.” There is also a substantial socioeconomic barrier: “Not only is inequality particularly steep, little is done to redress the opportunity deficit of poorer students.”

A number of European countries were also given pause for thought by the survey. From the land of Cervantes, Tele Cinco in Madrid reported that the findings suggested “the majority of Spanish adults would have difficulty reading Don Quijote”. And, in the same week the Nobel prizes were awarded, Ireland – home to four literature laureates – also found itself questioning its literary reputation: “The Republic has considered itself a country with a long literary tradition and highly literate population,” wrote Dick Ahlstrom  in The Irish Times. “This, however, was found to be incorrect on the basis of the OECD study.”

Still, it wasn’t all bad news. “Japanese adults excel at reading comprehension and handling mathematical information,” wrote The Japan Times. In Korea, The Korea Herald reported that adults there had also performed well, but, as in France, it noted a big generational gap: “Korea is ranked second only to Japan when comparing proficiency among 16 to 24-year-olds, but when comparing the proficiency of 55 to 65-year-olds, it is among the three lowest-performing countries.”

Canada’s media also reported some strong results, although The Globe and Mail noted “a gaping digital divide, with large swaths of the adult population scoring at both the highest and lowest levels” in the assessment of digital skills. According to Jeff Johnson, education minister in Alberta, the results show “we’ve got some work to do, particularly in the areas of numeracy, and we always want to do better in literacy as well. But we’re competitive.”

Useful links

Explore the results from skills survey.

OECD Skills Outlook

Follow the story on Twitter at #OECDSkills

Find out more about the Survey on Adults Skills (PIACC)

Reducing fossil fuel emissions isn’t enough: We must aim for their complete elimination by the second half of the century

Click to download the report
Click to download the report

Today’s post is from OECD Secretary-General Angel Gurría who this morning is presenting a major address on the Organisation’s analysis of climate change, investment and energy policies at an event in London co-organised with the London School of Economics and the Climate Markets & Investors Association (CMIA),

We need to come to grips with the risk of climate change. While many countries have announced ambitious targets to reduce fossil fuel emissions by 2020, and even mid-century, further efforts are needed. UNEP estimates that current pledges will only get us between a quarter and half way of the goal to limit the increase in global average temperature below 2oC. To combat climate change, reducing emissions will simply not be enough! We need instead to eliminate them altogether.

“Zero net emissions” might sound extreme. Why not just simply reduce them? The problem is accumulation. Carbon dioxide is a long-lived gas: almost half the CO2 emitted this year will still be around 100 years from now. Carbon dioxide concentration, and its warming potential, will therefore increase over time, unless the rate of accumulation falls to zero.

Ending our reliance on fossil fuels was never going to be an easy task. Two-thirds of all the electricity generated and 95% of the energy consumed by the world’s transport systems still rely on fossil fuels. The good news is that the bulk of fossil fuel emissions are energy-related and could be completely eliminated using existing technologies. Carbon pricing is a powerful tool to encourage this transformation, either through taxes or by means of emissions trading schemes.

For these efforts to bear fruit, the whole range of price and non-price measures that can be put in place by governments must be mutually supportive and consistent. This is not the case now. For example, coal releases far more CO2 per unit of energy than oil or gas but is taxed at lower rates than most fuels used to generate electricity. Diesel, which emits around 18% more CO2 per litre of fuel than gasoline, is taxed in OECD countries on average a third less than gasoline. Likewise, many countries have tax breaks to support biofuels, even though in most cases these are costly and often of questionable, if not negative, environmental value.

Even worse, some countries still engage in “negative carbon pricing”, more commonly known as subsidies. The IEA estimates that subsidies to fossil fuel in developing and emerging economies totalled $523 billion in 2011. Approximately $55- $90 billion per year are spent in support of the consumption and production of fossil fuels in OECD countries. The net effect of this massive misallocation of resources is to tilt the playing field in favour of a continued reliance on fossil fuels.

A coherent approach to carbon pricing is thus needed to ensure that price signals sent to consumers, producers and investors alike are consistent and facilitate a gradual phase-out of fossil fuel emissions.

Pricing carbon is also essential to encourage the development of alternative technologies, including for carbon capture and storage (CCS). Progress in this area is badly needed. Even if all currently planned CCS capacity were to be built today, only 90 Mt of CO2 would be captured per year, which represent less than 1% of the current power sector CO2 emissions in 2012.

The building of a post-carbon world will offer new economic opportunities, but the transition will not be costless. Governments must be frank about this fact. The commitment to limit the increase in global average temperature below 2oC will require expensive mitigation and adaptation investments. This is a manageable and affordable target, and certainly much less costly in human and economic terms than the alternative of unmitigated climate change

Thus, the goal for governments is to develop a policy mix that, over time, remains credible given the scale of the transformation needed. In doing so, governments should address four key policy challenges:

First, the lack of strong, consistent carbon pricing signals. Up to now, when carbon prices have been imposed, exemptions and carve-outs have combined with very low prices to make the overall impact of pricing marginal at best.

Second, there is an urgent need for fossil fuel subsidy reform. One would imagine that twenty years into the climate debate, countries would at least have made progress in removing subsidies to fossil fuels that encourage carbon emissions. Unfortunately, subsidies continue to exist, not only for consumers (which often end up benefiting higher income households), but also in the form of official support to oil and gas companies for the exploration and exploitation of new fossil reserves.

Third, government needs to avoid mixed messages and stop-go policies in supporting renewable energy. What is required are consistent and coherent signals to encourage greater investor confidence, which in the past has been badly shaken.

Finally, governments need to tackle regulatory and market rigidities which continue to favour the use of fossil fuels in the electricity sector. Thus, governments should encourage demand-side options and increased consumer choice over energy sources.

Tackling these challenges is as much a political issue as an economic one. Businesses simply don’t believe that governments are committed, and their investment choices reflect this lack of confidence, perpetuating activities that bring fossil fuel to the market.

We are neither on track to achieve internationally agreed goals nor managing to execute existing policies in a cost-effective way. Every government needs to take a hard look at its policy mix and determine if it is consistent with a path that eliminates emissions from fossil fuels sometime in the second half of the century.

It will not be enough to cherry-pick a few easy measures, there has to be progress on every front, but notably in respect to carbon pricing. The OECD is committed to assist countries in this process, in order to design, promote, and implement better policies for better lives!

Useful links

The climate challenge: Achieving zero emissions Full text of the OECD Secretary-General’s speech

OECD work on climate change

Have we the skills we need to succeed?

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Click to find out more

Here’s a sobering statistic: In around 20 of the world’s wealthiest countries, at least one in 10 adults can make sense of only basic texts. Ask them a question based on a piece of writing, and they’ll be able to answer only if the text is short, uses simple vocabulary and provides clues by repeating words used in the question.

OK, you’re thinking, not great, but at least the other nine must be able to read pretty well, right? Not so: That figure of one in 10 is just a minimum. In some of the world’s richest countries, more than a third of adults struggle with anything other than basic texts.

These findings come from a new report, the OECD Skills Outlook, released this morning and which, we’re guessing, will be all over today’s news. It represents a first attempt by the OECD to gauge literacy, numeracy and problem-solving abilities among adults and extends the work of PISA, which assesses the knowledge and skills of high school students. If you’re familiar with PISA, you’ll know its results are closely watched around the world, especially the relative rankings of the 70 or so countries that take part. The new adult skills survey, PIACC, is likely to attract similar interest, although it covers a much smaller group of countries, around 24.

The results show substantial variations in skill levels between countries. In Japan and Finland, for example, roughly one in five adults score at the highest levels for literacy. In Italy and Spain, by contrast, that proportion falls to as low as one in 20.

Why do these findings matter? As the blog has noted before, demand for skilled workers is rising in today’s economies at the expense of less skilled workers. There’s further evidence of this phenomenon in today’s OECD report. Compared with people with high levels of literacy, those on the low end of the spectrum are more than twice as likely to be unemployed. The survey also shows that low-skilled people are more likely to suffer poor health. And it’s not just individuals who suffer: Low skill levels, or the failure to make the most of the available talent, holds back national economies, too.

Much of the media attention around today’s report is likely to focus on how countries rank compared to each other. On the main measure for literacy, for example, Japan, Finland, Sweden and the Netherlands take the top four places while, among OECD countries, the other end of the scale is occupied by Ireland, France, Spain and Italy. The pattern is the same for numeracy, with the exception of France, which yields its place in the bottom four to the United States.

When it comes to using computers at least one in 10 adults lack basic skills but, again, there are big variations between countries. In Sweden, only around one in 50 adults who took part in the survey said they had never used a computer; in Italy, that proportion rose to just under one in four.

But country comparisons form only a small part of the findings. There’s also a wealth of data on how people develop their skills and abilities, how they put them to use and how factors like poverty and social background shape skills development. Some of the findings are, to put it mildly, surprising. For example, the survey suggests we need to rethink the assumption that more education automatically translates into higher skills. According to the Skills Outlook, young adults in Japan and the Netherlands with only a high school education “easily outperform Italian or Spanish university graduates of the same age”.

As the first in a planned series, this survey in some ways poses as many questions as it answers: why, for instance, is social background – family wealth, in other words – a major factor in shaping skill levels in some countries but not in others? And why are skill levels rising with each generation in some countries but apparently stagnating in others, such as the United States and United Kingdom? It will be interesting to see the answers and analysis that emerge in response to such questions in the years to come.

Useful links

Explore the data here

Follow the story on Twitter at #OECDSkills

Find out more about the Survey on Adults Skills (PIACC)

Government budget, read all about it!

Wikimedia doesn't have many photos of government budgets
Wikimedia doesn’t have many photos of government budgets

Today’s post is from Kate Lancaster, editor in charge of publications on government finance at the OECD.

Government budgets are news. Tough choices have had to be made in these challenging economic times and we’re all interested in how our governments are managing our money.

While the big headlines capture our attention – “Spending Plan: Seven More Years of Pain”, “Government Shutting Down” – do you ever wonder what’s actually happening behind the scenes? Despite the political clashes that make the news, there is still solid, steady work going on in countries, ensuring that governments can manage fiscal reforms responsibly and budget well, as OECD research shows.

Interested in the nitty-gritty of how countries create and manage their budgets? Check out the OECD Journal on Budgeting, which draws on the work of senior budget officials from around the world and whose issues include reviews of the budgetary systems of more than thirty countries.

Concerned about reforms of public administration and about the quality of services delivered to the public? Have a look at the OECD’s Value for Money in Government series.

Want to learn more about the hard truths many countries are facing, as they decide where to spend, where to save, and how to do it all efficiently? The OECD’s recent review of Greece’s ongoing welfare system reforms may interest you, as may Restoring Public Finances.

Wondering about how your country’s borrowing needs compare? The OECD Sovereign Borrowing Outlook may be the book for you.

Worried about how much your government owes? This table, which presents governments’ deficits and surpluses (as a percent of GDP), may interest you, as might this one on government debt, while you’ll find the full picture in OECD Central Government Debt Statistics.

Want to know what it’s really all about? Watch this:

Useful links

OECD work on budgeting and public expenditures