Education and Training in Europe

by Giorgio Brunello (Editor), Pietro Garibaldi (Editor), Etienne Wasmer (Editor)

Overview

While Europe is certainly one of the richest and most educated areas of the world, some of the challenges faced by the old continent are staggering: low economic growth, structural difficulties in the labour market, and increasing international competition. Politicians and policymakers may advocate different means of overcoming the potential economic decline of Europe, but most agree that Europe needs to strengthen human capital, its ultimate competitive advantage in the world economy. This book looks at the accumulation of human capital from two perspectives, first through formal education and then professional training. It provides a useful summary of the key characteristics of education and training in Europe and also asks key questions about the fundamental problems with the current educational and training systems. More importantly, the book goes on to discuss which policies are necessary to make existing education and training systems more efficient, while also making higher skills available to a wider range of people.

Product Details

ISBN-13:	9780191526251
Publisher:	OUP Oxford
Publication date:	05/17/2007
Series:	Fondazione Rodolfo Debendetti Reports
Sold by:	Barnes & Noble
Format:	eBook
File size:	5 MB

About the Author

Giorgio Brunello holds a MsC in Economics from the LSE and a PhD in Economics from Osaka University, Japan. He has taught at Osaka, Venice, and is currently Professor of Economics in Padova. He is a Research Fellow at IZA (Bonn) and CESifo (Munich). Pietro Garibaldi is Professor of Economics at the University of Turin, and acts as Economic Counselor of the Italian Ministry of Finance. He is also head of Labor Studies for the Fondazione Debenedetti and research fellow at IGIER, CEPR, and IZA. He holds a PhD in Economics from the London School of Economics. He was previously an economist in the IMF Research Department and an associate professor of Economics at Bocconi University. Etienne Wasmer is Professor of Economics at Sciences Po. Paris and at Université du Québec à Montréal. He is also a Research Fellow in both the Labour Program and the International Macro Program of CEPR. Etienne received a Ph.D. in Economics from the London School of Economics. He is also associate editor of the French think tank on-line telos, and been a consultant for the European Commission for the Socio-Economic Impact of the Cohesion Fund and the Ministry of Finance in Québec. He is currently External Member of the Council of Economic Advisors of the French Prime Minister.

Table of Contents

List of Figures     xi
List of Tables     xiii
List of Contributors     xvii
Preface     xix
The Macroeconomics of Education   Etienne Wasmer   Peter Fredriksson   Ana Lamo   Julian Messina   Giovanni Peri     1
Introduction     3
Background     3
Organization and summary of the report-Part 1     4
Theory and facts     4
The growth vs. cohesion trade-off     4
Improving the trade-off: a study of mismatch, mobility and skill specialization     6
Policy Implications     8
Theory and Facts     9
A brief theoretical perspective on human capital investment with a focus on institutions     9
Introduction     9
Theory     9
Perfect financial markets     9
Financial imperfections     10
Life-cycle and on-the-job investments     13
Labour market frictions     13
Conclusions of the theory part     14
Classification of education     15
The supply of education and its trends     18
Financing and quality     22
Returns to education: unemployment, wages, mobility     25
Wage returns to education     25
Employment and unemployment     28
Geographical mobility     31
Conclusion     35
Education Priorities: Growth vs. Cohesion
Cohesion and the Supply of General Skills in Europe     36
Introduction     36
Schooling and skills by cohort: a long-run perspective     36
Data description     37
Schooling and skills by cohort     39
The skills among those still in school     47
Mean student performance     47
Student/teacher ratios     49
Equality     51
Implications for wage inequality     52
Concluding remarks     54
Higher Education, Innovation and Growth     56
Introduction     56
A survey of the effects of education on growth     57
International migration, the brain drain and 'talents'     59
Immigration to the EU and the USA: size and composition     59
'Talents': analysing their mobility and contribution     63
Highly educated, productivity and innovation     66
Quality of highly skilled foreign-born in the US     66
Effect on innovation     68
Conclusions      70
The Margins of Improvement of Education Institutions: Skill Mismatch, Skill Portability and Mobility
Internal Mobility, Skills and Education     71
Introduction     71
Internal mobility: EU versus USA     72
Mobility and education in Europe     73
Introduction     73
Data: ECHP and geographical mobility     75
More descriptive statistics on mobility     76
Theory     78
First strategy: comparing job-related mobility and mobility for other reasons     80
Second strategy: estimating the income gain from migration     85
Further comments on mobility and education     88
Determinants of mobility of highly skilled workers across US state data     88
Conclusions     90
Skill Mismatch and Over-qualification in the Enlarged Europe     91
Introduction     91
A brief survey of the literature     92
Skill mismatch and over-qualification in the EU-15     93
Who is over-qualified or mismatched?     97
Over-qualification, skills mismatch and wages     101
Education mismatch in a transition economy: the case of Poland     104
Returns to over-under-education     106
Nature of education mismatch in Poland      108
Overall conclusions     110
Specificity of Skills and Reallocation     111
Introduction     111
Skill specialization in Europe     111
Measurement of specific skills     114
An application to two accession countries, Poland Estonia     115
Policy implications     118
References     122
Appendices     131
Comments     134
Juan J. Dolado     134
Daniel Gros     140
Workplace Training in Europe   Andrea Bassanini   Alison Booth   Giorgio Brunello   Maria De Paola   Edwin Leuven     143
Introduction     145
An Overview of the Theoretical Framework     158
The received wisdom     158
Challenges to this orthodoxy     159
An overview of the various approaches and their empirical predictions     161
General training in a perfectly competitive labour market     161
Imperfect capital markets and general training     161
Pure specific training     162
Mixture of training types     162
Oligopsonistic wage setting     163
Asymmetric information      164
Comparisons of predictions of these models     165
A clarification of wage compression     165
Is there under-provision of training?     167
Is there an equity issue?     169
Institutions     170
Trade unions     170
Otherwise competitive labour markets     171
Imperfectly competitive labour markets     171
Union concern over the wage-employment package     173
Labour turnover     173
Unions' use of training to control labour supply     174
Selectivity and other issues     174
Minimum wages     175
Taxes and social security systems     176
Product market competition and deregulation     176
Schooling institutions     177
Summary     177
Appendix 1     179
Appendix 2     182
Appendix 3     184
Unions     184
Product market regulation     185
Stylized Facts about Workplace Training     187
Measurement issues     188
The distribution of training across countries and regions     193
Who pays for training?     197
The distribution of training investments across firms      201
Training differences across employees     205
Summary     214
Description of the Datasets and Supplementary Tables     216
Training and Labour Market Institutions     232
Previous empirical literature     233
Unions and training     233
Minimum wages and training     234
Flexible labour contracts and training     235
Product market competition, employment protection and training     235
Schooling and training     236
Training and pensions     236
The data     237
The empirical set-up     243
The empirical results     244
Summary     251
The Costs and Benefits of Workplace Training     253
Estimating the private returns to training     254
Identification     254
Rates of return     256
Returns to employees     257
The US evidence     258
The European evidence     261
Evidence from the ECHP     263
Are the wage returns to training really high?     265
Summary     267
Returns to employers     267
Training and growth      270
Summary     270
Is There Scope for Policy?     272
Policy responses to market failures in training provision     273
Under-provision: what is the evidence?     273
Training and turnover     276
Credit constraints     278
Is there an equity issue?     278
What do we learn from the empirical evidence?     282
A political economy approach     282
Policies offering financial support to workplace training     283
Labour market policies and training     287
Summary     289
A Simple Political Economy Model of Training Subsidies     290
Training Policies in Europe     293
Regulation: pay-back clauses, time working accounts and apprenticeship contracts     293
Co-financed schemes directed at firms     301
Co-financed schemes directed to individuals     306
References     310
Comments     324
Giuseppe Bertola     324
Jorn-Steffen Pischke     330
Final Remarks   John P. Martin     343
Index     349