Skills needed to achieve UN Sustainable Development Goals

An article from the IMF publication ‘Finance & Development’ tackled the question of how can the UN bring about the 17 SDGs? Economic development depends a lot on the skill levels of the population and this requires considerable investment and time. The IMF highlighted 3 issues:

  1. Skill differences account for three-quarters of cross-country variations in long-term growth.
  2. The global skill deficit is immense, as two-thirds or more of the world’s youth do not reach even basic skill levels.
  3. Accordingly, reaching the goal of global universal basic skills would raise future world GDP by $700 trillion over the remainder of the century.

Long-run growth depends primarily on the skills of the people. According to Hanushek and Woessmann 2015 relevant economic skills are captured quite well by international student achievement tests in math and science. The graph below shows the relationship between long-term growth and achievement. Skills are measured by two international assessments:
Programme for International Student Assessment [PISA]
Trends in International Mathematics and Science Study [TIMSS]

Growth and achievement are closely linked: countries with high-achieving populations grew fast; those whose people lag in achievement hardly grew at all. Achievement explains three-quarters of the variation in growth rates across countries. Moreover, years of schooling have no bearing on growth after accounting for what has actually been learned.

Although international achievement tests were first developed in the 1960’s the majority of poorer countries have never participated. The IMF define basic skills as those necessary to participate productively in modern economies. These are represented by mastering at least the lowest of the six skill levels of the PISA test – at this level students are able to carry out obvious routine procedures. However at this level they cannot solve simple problems involving whole numbers. These skills are imperative in the ever changing world of employment. 66% of the world’s young people fail to compete in the international economy. According to the IMF there are 6 development challenges by global deficits in basic skills:

  • At least two-thirds of the world’s youth do not obtain basic skills.
  • The share of young people who do not reach basic skills exceeds half in 101 countries and rises above 90 percent in 37 of these.
  • Even in high-income countries, a quarter of young people lack basic skills.
  • Skill deficits reach 94 percent in sub-Saharan Africa and 90 percent in south Asia, but they also hit 70 percent in Middle East and North Africa and 66 percent in Latin America.
  • While skill gaps are most apparent for the third of global youth not attending secondary school, fully 62 percent of the world’s secondary school students fail to reach basic skills.
  • Half of the world’s young people live in the 35 countries that do not participate in international testing, resulting in a lack of regular foundational performance information.

It is not enough for young people to be at school – low quality education is prevalent in most poorer countries. The last few years have not helped with school closures and reluctance to return to the classroom which will not disappear simply by restoring schools to their January 2020 performance. The pandemic has impacted the poorer children in both developed and developing countries.

Improving student achievement is the goal and a possible way of doing this is incentives related to educational outcomes, which is best achieved through the institutional structures of the school system. Notably, education policies that develop effective accountability systems, promote choice, emphasise teacher quality, and provide direct rewards for good performance offer promise, supported by evidence.

Source: IMF F&D The Basic Skills Gap – September 2022

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The youth of Spain fall mainly on the “dole”

Youth unemployment has been one of the major issues in the Spanish labour for a number of years. However, it has been the latest crisis in the euro zone that has highlighted the issue and it has worrying consequences for future growth in the Spanish economy. One cause is that of education participation.

As the chart (BBVA Research – Madrid) below shows, the rate of youth unemployment in Spain during the 1990‘s showed little change between the various sectors of education. From 2000 onwards those with secondary and tertiary education had lower rates of unemployment when compared to their counterparts whom had left secondary school early – the latter unemployment rate being consistently above 20%. The current crisis in the euro zone has seen the unemployment rate of those in the lowest level of education rise to 50% when compared to 35% amongst those who finished secondary education and 30% of whom gained a university degree. Tertiary education needs to be restructured in their content and duration as too many degrees have no direct future with regard to employment. Maybe there needs to be greater links with the private sector in order to improve the employability of graduates. It could be the case that certain degrees have compulsory internships that provide students with experience and specific knowledge.