Browse by: "2015"

The combination of work and study has been hailed as crucial to ensure that youth develop the skills required on the labour market so that transitions from school to work are shorter and smoother. This paper fills an important gap in availability of internationally-comparable data. Using the 2012 Survey of Adult Skills (PIAAC), it draws a comprehensive picture of work and study in 23 countries/regions. Crucially, it decomposes the total share of working students by the context in which they work (VET, apprenticeships or private arrangements) and assesses the link between field of study and students’ work. The paper also assesses how the skills of students are used in the workplace compared to other workers and identifies the socio-demographic factors and the labour market institutions that increase the likelihood of work and study. Finally, while it is not possible to examine the relationship between work and study and future labour market outcomes at the individual level, some aggregate correlations are unveiled.

What are the economic effects of implicit bank debt guarantees and who ultimately benefits from them? This paper finds that “financial excesses” – situations where bank credit reaches levels that reduce economic growth – have been stronger in OECD countries characterised by larger values of implicit guarantees and where bank creditors have not incurred losses in bank failure resolution cases. Also, implicit bank debt guarantees benefit financial sector employees and other high-income earners in two ways, increasing income inequality. First, implicit guarantees are likely to raise financial sector pay. This is consistent with the observation of “financial sector wage premia”, or financial sector employees earning in excess of their profile in terms of age, education and other characteristics. Second, implicit guarantees are likely to result in more and cheaper bank lending. If so, well-off people tend to benefit relatively more since household credit is more unequally distributed than income.

JEL classification: D63, E43, G21, G28, O47
Keywords: Bank funding costs, implicit guarantees for bank debt, bank failure resolution, finance and growth, finance and income inequality

Across OECD countries, 5% of students expect to work as teachers: 3% of boys and 6% of girls. The academic profile of students who expect to work as teachers varies, but in many OECD countries,students who expect to work as teachers have poorer mathematics and reading skills than other ambitious students who expect to work as professionals but not as teachers. PISA shows that, on average, a higher percentage of students expects to work as teachers in countries where teachers’ salaries are higher.

Top earners have become the subject of intense public and scholarly debate. This is the first paper that comprehensively documents the profiles of the 1% highest paid employees across 18 European countries. The data come from the largest harmonised source available, an employer-based survey that covers the labour income of 10 million employees, excluding the self-employed. The patterns that emerge are broadly common across countries. Workers in the top 1% tend to be 40 to 60 years old, be men, have tertiary education, work in finance or manufacturing, and be senior managers. The analysis also uncovers several cross-country differences. For example, top earners are younger in Eastern Europe, and they include more women in countries with higher overall female employment. The new estimates in this paper are similar to related ones based on administrative records in the few countries for which such studies exist, indicating that the sample is broadly representative of the characteristics of top earners.

The top-performing country in the PISA assessment of digital reading was Singapore, followed by Korea, Hong Kong-China, Japan, Canada and Shanghai-China. Students in Australia, Canada, Ireland, Korea, Singapore and the United States show the most advanced web-browsing skills. More often than students elsewhere, they carefully select links to follow before clicking on them, and follow relevant links for as long as is needed to answer a question. There is a strong association between countries’ digital reading performance and the quality of students’ navigation across digital texts.

This paper investigates the factors that influence the international mobility of research scientists using a new measure of mobility derived from changes in affiliations reported by publishing scientists in a major global index of scholarly publications over the period 1996-2011. Using a gravity-based empirical framework, our research shows that measures of geographic and socioeconomic and scientific distance correlate negatively with scientist mobility between two countries. Scientific collaboration appears to be a major factor associated with the mobility of scientists. The analysis shows that the mobility of scientists particularly relies on flows of tertiary-level students in the opposite direction, from destination to origin country. This provides strong evidence that brain circulation is a complex and multi-directional phenomenon. For a majority of country pairs (dyads) in our sample, the mobility of scientists is generally better described by commensurate knowledge flows in both directions, rather than one dominating the other. The analysis also shows that mobility can be positively influenced by convergence in economic conditions and resources dedicated to R&D, as well as reduced visa-related restrictions.

• When choosing a school for their child, parents in all participating countries value academic achievement highly; but they are often even more concerned about the safety and environment of the school and the school’s reputation.
• The children of parents who consider academic achievement very important score 46 points higher in mathematics than the children of parents who consider it not important.

The International Standard Classification of Education (ISCED) is the reference framework used to classify education programmes and related qualifications by education levels and fields. The basic concepts and definitions of ISCED are intended to be internationally valid and cover the full range of education systems. ISCED 2011, the second major revision of the classification, reflects significant shifts in the structure of tertiary education resulting from the Bologna process in Europe, the development of early childhood education, and increasing interest in statistics on the outcomes of education such as educational attainment. ISCED 2011 has been implemented for the first time in data collected for indicators published in Education at a Glance 2015. This new classification offers the potential for new analysis at both tertiary level and in early childhood education. The ISCED classification of fields of education was reviewed separately. The ISCED 2013 Fields of Education and Training classification (ISCED-F 2013) will be used for the first time in Education at a Glance 2017.

In most OECD countries, the large majority of adults had at least an upper secondary qualification in 2013, making the completion of upper secondary education the minimum threshold for successful labour market entry and continued employability or the pursuit of further education. Young people who left school before completing upper secondary education face difficulty in the labour market but also have particularly low cognitive skills compared with upper secondary graduates. Those aged 15-29 who left school before completing upper secondary education are twice as likely to have low numeracy scores than those with an upper secondary education. On average across OECD countries, the unemployment rate among 15-29 year-olds not in education is 13 percentage points lower among those with an upper secondary education than for those without. Having a tertiary qualification reduces unemployment rates by a further five percentage points.

OECD’s Recommendation of the Council on Budgetary Governance makes a substantial contribution to discussion of good budgetary practice by synthesising much common understanding while updating it to recognise some lessons from the experience of the Great Recession. Yet its implicit understanding of the purposes of budget processes has weaknesses both as policy and political analysis. The policy understanding overemphasises the importance of budget totals relative to budget details. The political understanding is as top-down as the policy view. Although budgets might be seen as contracts between citizens and the state, in a representative system they are better seen as treaties among citizens negotiated through politics. The Recommendation barely recognizes the existence of and challenges from political conflict.

JEL classification: H00, H60, H61
Keywords: Balance, fiscal policy, information, representation, top-down, United States

The growing literature studying the determinants of subjective wellbeing find that Mexicans report, on average, levels of life satisfaction that are above what would be predicted by the available objective measures of well-being. This paradox raises the following question: Are the drivers of subjective well-being in Mexico different from the drivers in other countries? This paper tries to answer this question using data from the World Gallup Poll and Instituto Nacional de Estadísticas y Geografía (INEGI). In particular, it investigates if the impact that key objective measures of well-being have on life satisfaction is different in Mexico than in other countries. The results show that the drivers of life satisfaction are very similar to those in other countries. In particular, as in other countries, in Mexico income, education, health, job status and other individual characteristics are significantly associated with life satisfaction. These findings suggest that the higher average level of life satisfaction in Mexico is probably related to unobserved country characteristics. This Working Paper relates to the 2015 OECD Economic Survey of Mexico (www.oecd.org/eco/surveys/economic-survey-mexico.htm).

• While PISA reveals large gender differences in reading, in favour of 15-year-old girls, the gap is narrower when digital reading skills are tested. Indeed, the Survey of Adult Skills suggests that there are no significant gender differences in digital literacy proficiency among 16-29 year-olds.
• Boys are more likely to underachieve when they attend schools with a large proportion of socio‑economically disadvantaged students.
• Girls – even high-achieving girls – tend to underachieve compared to boys when they are asked to think like scientists, such as when they are asked to formulate situations mathematically or interpret phenomena scientifically.
• Parents are more likely to expect their sons, rather than their daughters, to work in a science, technology, engineering or mathematics field – even when their 15-year-old boys and girls perform at the same level in mathematics.

Energy efficiency and renewable energy technologies provide important opportunities to reduce greenhouse gas emissions. However, households fail to take up many clean energy investments that are cost-effective. This paper reviews different explanations for apparent underinvestment in energy efficiency that have been put forward in the literature. While investments in renewable energy technologies are typically not (yet) profitable, many of its drivers are similar to those that determine energy efficiency investments, and the two types of investment are therefore assessed jointly. The paper also provides new evidence regarding barriers to investment in energy efficiency based on the OECD Survey on Household Environmental Behaviour and Attitudes. Finally, policy solutions that would help overcome some of these barriers are also presented.

The issue of a “level playing field” has re-emerged as a major issue in international aviation. This issue has been around for decades but has been raised in recent policy debates. One policy forum in which this has been raised is the European Commission’s proposed revision to Regulation 868/2004, which some view as a response to allegations by some legacy carriers to the rapid growth of the Middle East carriers such as Emirates, Etihad Airways and Qatar Airways. Another dimension to the concern over the level playing field is the evolution in foreign ownership rules, such as the type of treaty clauses being negotiated by the European Union. Could broader acceptance of service by carriers owned by third-party nationals create conditions for a flag of convenience regime of the kind that characterises parts of maritime liner shipping? The flag of convenience issue has been discussed in the U.S. media with regard to Norwegian Air Shuttle. Norwegian’s long haul services are operated by subsidiaries Norwegian Long Haul AS and Norwegian International Ltd. The former is registered in Norway while the latter is registered in Ireland and operates flights for its parent. Some long haul flights have operated with contract flight attendant labour based in Thailand.

The water in the General Agreement on Trade in Services (GATS) refers to the difference between the bound level of trade restrictiveness permitted by the GATS and the actual trade regime. Using the OECD Services Trade Restrictiveness Index (STRI), this report provides estimates of the water in 15 service sectors for 40 countries. The level of water in GATS commitments varies across sectors. It is highest in sectors where most countries have no commitments (unbound), such as audio-visual services or transport services, as well as sectors where countries tend to make commitments only for selected types of activities, such as legal services. The lowest level of water is observed in sectors such as telecoms, construction, computer and distribution services that are also characterised by a more liberal trade regime. Generally speaking, current services trade policies are much more open than what countries have committed in the GATS and sectors that are “unbound” can be fairly open.

While public regulation in food and agriculture is attracting attention at both policy and research level for their potential implications on international food trade, policy implications of agricultural standards – understood to be legally not mandatory and hence voluntary – are much less well understood. Yet, environmental and organic standards have grown in importance in agriculture and agri-food chains, making also their potential trade effects more relevant. In this context, understanding the linkages between governments and standards has become a key element in the debate. This report analyses possible roles of public authorities in the area of environmental and organic standards, including policy objectives, options for interaction and means for the use of standards for achieving public policy goals. It identifies the main objectives behind government activity on environmental and organic standards in the area of consumer protection and fraud prevention, the enabling of functioning food markets and the improvement of efficiency in the design, implementation and monitoring of public policies. Countries have taken very different approaches towards dealing with standards on organic agriculture which frequently, though not always, are seen as a subset of environment-related standards. Choices for organic standards range between market self-regulation and the development of government-owned public standards. More generally, the level of public intervention often reflects OECD governments’ perception on the environmental benefits of organic agriculture itself.

France devotes a great deal of resources to vocational training for youths and especially adults, but the system is unduly complex and yields rather poor returns. The basic literacy and numeracy skills of many French adults remain weak in international comparison, with harmful effects on employment opportunities, wages and well-being. Access to basic skills training is poor for those who need it most, many of whom come from disadvantaged socio-economic backgrounds. Secondary vocational education and apprenticeship training still suffer from a serious image problem in the minds of French families, even though the latter have a good track record. The government has succeeded in ensuring that the number of apprenticeships is growing, but that is mostly due to those studying at the tertiary level or at least for a higher secondary diploma. The labour market outcomes of those with only shorter vocational qualifications are not good, and quality in that stream needs to improve. To do so better teachers and workplace trainers need to be attracted to the field, especially individuals who can better link practical experience and theoretical concepts. The financing of the adult training system involves complex collection mechanisms even following a major recent overhaul. Making further changes will have to confront entrenched interests, even if the use of the training levy to finance business groups and unions has now ended. The goal is to direct more training funds to workers in small firms who have the weakest skills as well as to jobseekers, but this might be more easily achieved by shifting the funding base from a levy on employers to fiscal incentives or direct subsidies. There remains a need to align responsibilities for adult training with corresponding control over funds. Workers are henceforth to be given personal training accounts in which they can accumulate rights to up to 150 hours of training. But the enormous number of providers and courses on offer calls for greater efforts to develop good guidance, evaluation and certification systems to ensure the training finally chosen is appropriate and of sufficiently high quality.

This paper presents an analysis of urban spatial structure and its trends in the OECD between 2001 and 2011. It does so by using a standardised definition of urban areas in 29 OECD countries as composed of high density cores and their respective commuting zones. While urban population is growing everywhere, the way in which populations locate throughout the urban space differs across OECD cities and countries. The prevalent trend is an increasing dispersion of the population, with growth taking place outside existing centres. However, in specific countries, there are cities experiencing a higher growth in their central cores, while others are strengthening their polycentric structures. Overall, the population has grown more in relatively low-density locations close to the main centre, but outside it. Closeness to sub-centres also proves to be a strong advantage for growth and suggests the emergence of new centralities shaping urban spatial structures.