Report

Skills for the 21st Century – PIAAC is the jewel OECD says

The OECD Survey of Adult Skills is the jewel in the crown of its Programme for the International Assessment of Adult Competencies (PIAAC). This paper argues that the findings and policy lessons from the project to date justify the high hopes which were placed in PIAAC when detailed planning for the project began in 2003. First, it presents a brief recap of PIAAC and its two predecessor international skills surveys. Second, it outlines the main themes which have been investigated to date using data from PIAAC. Third, the main findings and policy lessons drawn from PIAAC are highlighted. Finally, looking forward to the second cycle of PIAAC, for which planning is now underway, the paper suggests some priority areas for improvement to the survey design in order to add to its analytical usefulness and enhance its utility to policy makers.

To date, analyses of data from the OECD Survey of Adult Skills have tended to be grouped around a number of major themes as follows:

  • The Transition from School to Work. High youth unemployment is a scourge in many OECD countries. One route to reducing it is to improve the transition from school to work, thereby enabling youth to gain valuable work experience to add to their educational qualifications. Here the OECD has been able to exploit links between its well-known PISA assessment of 15-year-olds in school and how the cohort aged 16-25 in PIAAC has been faring in the labour market. Ideally, one would like to do this via longitudinal data following students sampled in PISA who were also sampled in PIAAC – a few countries are able to do this (Denmark, Canada, Germany). Others have to rely upon comparing synthetic cohorts computed from the cross-sectional data based upon single year of age or 5-year age intervals.
  • Returns to Skills. There is a vast literature documenting the returns to skills in terms of earnings and employment probabilities. However, the bulk of this literature proxies skills by measures of educational attainment. The advantage of PIAAC is that it provides comparable measures of key skills among the adult working-age population independent of educational attainment and thus serves to enrich the debate on returns to skills.
  • Skill Mismatch. There is a large literature on the theme of skill mismatch. Economists have argued that skill mismatches, which arise when the skills that workers have are not well matched to the skill requirements of their current jobs, have negative impacts on wages, productivity, job quality and worker satisfaction. Typically, skill mismatch in this literature is proxied by either educational attainment or occupation. However, PIAAC, by virtue of its direct measures of skills, is able to produce new measures of mismatch which resonate more closely with the underlying concept.
  • Skill Use at the Workplace. At the same time, the PIAAC background questionnaire allows one to assess how certain key information-processing tasks are undertaken in the workplace. This provides a very useful complement to the mismatch data and begins to dig into the important issue of how human resource practices within the firm impact on outcomes.
  • Changing Comparative Advantage and Global Value Chains (GVCs). For many years, skills have been recognised as a source of a country’s comparative advantage alongside land, capital and innovation. The standard approach to measure skills has been to disaggregate the labour input into low-skilled and high- skilled workers. Once again, the literature on the determinants of comparative advantage has typically opted to proxy skills by educational attainment or occupation for want of a more direct measure of skills. PIAAC can overcome this lacuna in the literature with its direct measures of workers’ skills.

Chosen excerpts by Job Market Monitor. Read the whole story at Skills for the 21st century – Papers – OECD iLibrary

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