Labour market
·
Skills

Pick up the pace: the slowdown in educational attainment growth and its widespread effects

Kathleen Henehan
Kathleen Henehan

This paper uses the Brexit moment to take stock of where Britain has got to on educational attainment, and where we might be heading. It highlights that while improvements to the country’s human capital stock have been driven by increasingly educated cohorts of young people flowing into the labour market, the pace of growth in young people’s educational attainment has more than halved since the start of the 21st century. This ‘slowdown’ is worrying because the qualifications held by young people flowing into the labour market play the predominant role in raising the country’s overall stock of human capital, a major driver of progress on productivity and living standards.

Key findings

 

  • Between 1996-98 and 2016-18, the proportion of 22-64 year olds whose education stopped at a GCSE A*-C-or-equivalent levels has fallen by one-third; the proportion who went on to attain a degree or higher has more than doubled.
  • This boost to the country’s stock of qualifications has been driven by both an inflow of increasingly educated younger cohorts (a plurality of whom hold a degree) and an outflow of lesser-educated older cohorts (a plurality of whom did not study beyond GCSE-equivalent levels).
  • Class-based gaps in degree attainment appear to have waned: the degree attainment rate among 50-54 year olds who grew up in homes with a parent in a high-skilled occupation is 120 per cent higher than among their counterparts who grew up in homes with parents in mid- and lower-skilled work. The same gap among 30-34 year olds is 60 per cent – still large but half the size of their older counterparts.
  • However, this pattern does not extend to Master’s level and above. Young people with high-skilled parents are still almost three times as likely to have a Master’s degree as those with low- and-mid skilled parents – and the class-based gap in Master’s attainment gap does not appear smaller for younger people than it does for their older counterparts.
  • During the late 1990s and early 2000s, the qualifications held by young people flowing into the labour market rose at an astonishing rate: year-on-year between 1997 and 2003, the average increase in the share of 25-28 year-olds with a Bachelor’s degree or higher grew by 1.8 percentage points; the share with GCSE grade A*-C equivalent or lower qualifications reduced by an average of 2.3 percentage points.
  • However, these rates more than halved from 2004: over 2004-10, the average annual increase in Bachelor’s degree and higher attainment fell to 0.7 percentage points; even more significantly the reduction in those with GCSE and lower qualifications fell to just 0.3 points. These rates of change have improved slightly since 2010 but remain just over half the size of 1997-2003 levels.
  • Migration has had little effect on the 25-28 year old attainment slowdown: the slowdown is visible whether or not we focus on the whole population or remove migrants from the analysis. If anything, over the most recent period (2012-18) the inflow of migrants appears to have slightly masked the extent of the qualifications slowdown.
  • Firms’ hiring difficulties help to shed light on where an acceleration in skills supply could have the biggest impact on the economy. Our analysis finds that while higher-level academic qualifications have a role to play in filling some of the country’s largest skill shortages, a range of mid- and higher-level technical and vocational qualifications are strong candidates for restarting attainment growth in a way that matches current demand.
  • Skill shortages are particularly relevant when viewed through the light of Brexit and government proposals for a more restrictive migration regime: there are 1.4 million migrants (26 per cent of the working migrant population) who are currently employed in roles with above-average skill shortages and earn below the proposed salary thresholds for their occupation. Potentially affected roles include chefs, drivers, carers and nursing assistants, construction operatives and hotel and restaurant managers.
  • Work-related training has long been skewed towards the already-highly-qualified and away from the workers whom employers are most likely to say lack the skills required for their job. For instance, during 2016-18, 22-64 year olds with Master’s degrees were almost three times as likely to report having recently received work-related training as their counterparts with qualifications below GCSE A*-C-equivalent levels.
  • In addition, 29 per cent of staff in roles that, according to employers, have a below-average share of workers that lack the skills necessary for the job report having recently received training; just 16 per cent of staff in roles with an above-average share of such ‘skill gaps’ reported the same. Crucially, this skill gap-related difference in training rates persists even among workers with similar qualification levels.

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Kathleen Henehan
Kathleen Henehan