Education in UK – The pace of growth in young people’s educational attainment has more than halved since the start of the 21st century

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.

The UK’s exit from the European Union has ignited a debate on its skills opportunities and challenges, making now a good time to take stock.

As Britain’s exit from the European Union nears, questions about the country’s access to skills have come to the fore. Some have argued that ‘turning off the tap’ of migrant labour will bring with it challenges, by denying businesses access to the skilled labour they need, with potentially destabilising economic effects. Others maintain that reduced levels of migration as a result of Brexit offer opportunities: they could compel educators and employers to focus on upskilling UK-based workers – particularly younger cohorts – much more than they have in the recent past.

This paper uses the Brexit moment to take stock of where Britain has got to on educational attainment, and where we might be heading. In particular it highlights that while improvements to the country’s human capital stock have been driven by increasingly educated cohorts of young people owing 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 in equal parts worrying and frustrating. Worrying – because the qualifications held by young people owing 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. Frustrating – because young people are those within closest reach of policy. For these reasons, they form a central focus of this report.

Recent decades have been characterised by a marked boost in educational attainment

The notion that adults today are more educated than those who came before them has been widely established: today’s young adults were, after all, born during an era in which the soon-to-be Prime Minister declared “education, education and education” his top priorities. The scale of educational attainment change experienced by adults since the 1990s has indeed been considerable: the proportion of 22-64 year olds whose education stopped at a GCSE-or-equivalent level 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). As such, while the modal UK worker in 1996-98 had attained at most a Level 2 (GCSE-equivalent) qualification, the modal UK worker in 2016-18 was a graduate. The scale of the change over this period is particularly high by international standards.

Attainment growth has been spread across the labour market, as well as across gender and ethnicity

Importantly, educational attainment growth has not been limited to a particular set of jobs nor to specific groups of people. Since the late 1990s, the share of 25-28 year old new job entrants qualified only up to GCSE- equivalent levels has fallen across 24 out of the 25 occupations that make up the Office for National Statistics’ (ONS) two-digit occupational classification. Some of the largest falls occurred within elementary service, caring, sales and secretarial roles – jobs that both employ a large share of the overall UK workforce and that started out the time period with a high share of lower- qualified workers.

Moreover, the rise in qualification levels has not been entirely centred on Bachelor’s degrees; among some roles, like health and care assistants, much of the growth has centred on mid-level qualifications. While in other jobs, such as professional researchers and engineers, growth has been exclusively within top-level qualifications – Master’s degrees and PhDs.

Just as attainment growth has been spread across occupations, so too has it been spread across sex and ethnicity. While the wider 25-28 year old degree attainment rate more than doubled from 17 per cent in 1996-98 to 40 per cent in 2016-18, the share of young black women with degrees more than trebled (from 13 per cent to 49 per cent), as did the share of young Indian women with degrees (from 22 to 75 per cent). These patterns mean that the level of variation in attainment that exists between sex and ethnicity groups has fallen. In 1996-98, young Indian men were more than 3 times as likely to have a degree as young Pakistani & Bangladeshi women. Today, no group has a degree attainment rate that is treble that of any other. This pattern of progress and attainment gap narrowing is very good news.

However, large attainment gaps persist

Class-based gaps in degree attainment also appear to have waned to some extent: 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 sizable but half that of their older counterparts. Importantly however, this pattern does not extend to Master’s level and above. As degrees have become the ‘new norm’, individuals from advantaged backgrounds have differentiated themselves by seeking out higher levels of attainment.

The advantage of having a ‘head-start’ also extends to region. For instance, the degree attainment rate among 25-28 year olds in Northern Ireland during 2016-18 (35 per cent) was just below the degree attainment rate in inner London a full 20 years earlier (36 per cent). In fact, regions that experienced the largest percentage point growth in the size of their young degree-holding populations between 1996-98 and 2016-18 were those that began the period with an above-average share of young degree holders. Despite quali cations growth, those that started out behind the pack have struggled to make relative gains.

The least painful way of closing these persistent geographical and class gaps in young adults’ education attainment requires continued overall attainment growth that is targeted at the groups and areas still experiencing large attainment gaps today.

The pace of educational attainment growth has more than halved since the turn of the century, and this slowdown has been widely spread During the late 1990s and early 2000s, the quali cations held by young people owing 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 quali cations 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 signi cantly the reduction in those with GCSE and lower quali cations 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.

This slowdown in quali cations improvements has not been driven by any particular region or group: attainment progress slowed in all but one of the UK’s regions of residence, as well as among ethnic minority and white women, and white men. Men from black, Asian and ethnic minority (BAME) backgrounds have proved an exception, experiencing higher-levels of attainment growth over 2012-18 than during 1997-2003.

This slowdown matters because educational attainment growth can deliver higher living standards – and cannot be dismissed as simply the result of migration or skills saturation.

The premise of this work is that this slowdown in human capital growth is problematic because rising educational attainment is a driver of productivity improvements, which determine real pay improvements in the long run. But it is worth considering some counter-arguments that might be made about why policy makers should be relaxed about the attainment growth slowdown. We focus on two, the interaction with migration and the suggestion that slowing skills supply growth simply reflects slowing demand growth.

On migration one might note the correlation between the timing of the attainment slowdown and the rise in inward migration that occurred from 2004. One hypothesis could be that an inflow of migrants relieved some of the country’s demand-driven education and training needs, leading to slower human capital growth for younger cohorts. A second, competing, hypothesis would be to suggest that migrants from the EU, were they to enter the UK with lower-levels of education than the UK-born average, could have been responsible for a downshift in the wider pace of attainment growth that is then driving the overall attainment growth slowdown.

Both hypotheses are not good explanations for what we see in the data. The rst hypothesis disproves itself: had skilled migration allowed the country to take its foot off the pedal of attainment, there would not have been a slowdown. The second hypothesis also falls short: the rise in migrant numbers during and after 2004 appears to have had little effect on the slowing pace of educational attainment that occurred among the wider 25-28 year old population. Indeed the slowdown in attainment growth 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 in ow of migrants appears to have slightly masked the extent of the quali cations slowdown.

Another argument against worrying about the slowdown in attainment growth is that it reflects Britain reaching the limits of educational improvements desired by our rms. But there is little evidence to back this up, not least when we consider Britain in international context. It is still the case today
that more than a quarter of 25-28 year olds in the UK have lower-level or no qualifications (i.e. GCSE-equivalent and below) and the UK is unique for having such a large share of lower-quali ed young adults: the UK has a higher share of low-qualified (below GCSE A*-C -equivalent) young adults (13 per cent) than many other English-speaking countries, including Canada (7 per cent), the US, Ireland (8 per cent each) and Australia (11 per cent).

Chosen excerpts by Job Market Monitor. Read the whole story at Pick up the pace: the slowdown in educational attainment growth and its widespread effects – Resolution Foundation