QUALIFICATIONS AND THE INCENTIVES TO LEARN

Ewart KeepSKOPE

Cardiff University

The policy goal of participation

Across the developed world, policy aims for

higher levels of participation and

achievement by:

• Young people in initial E&T• Adults in continuing education, CPD and

lifelong learning

The UK problem

• Low achievement within compulsory schooling

• Middling post-compulsory participation (much remedial), adult learning skewed towards top end of occupational ladder.

• Polarised achievement across population, poor showing in OECD league tables

How can research help?Research AND policy thinking on what governs participation andachievement tends to be highly fragmented. Synthesis AND systemicapproaches are in very short supply. The field is broken into chunks:

• Aspiration• Parental attitudes• Class and social mobility• Gender• Ethnicity• Rates of return/wage premia on types of qualifications, levels of

qualification and different sorts of learning• Labour market structures and progression• Curriculum• Pedagogy• Assessment• Barriers to learning

Competing schools of thought

1. The learning process – need for new curricula, pedagogies, assessment systems &qualifications

2. Market failure (making the case that skills pay) and barriers to learning

3. Personal efficacy and aspiration failure (individual, community and class-based)

Example 1: Rates of return

• Dominant analytical frame in UK• Vast number of studies looking at many different

types/levels of qualification and sections of student/learner population

• Backward looking• Averages often artificial and misleading• Descriptive device – little explanation of results• Often blind to other factors (e.g height,

appearance, psychological traits, etc)

Example 2: Barriers to learning

Exploration of a wide range of barriers, such as:

• Lack of finance

• Time poverty

• Fear of failure

• Lack of transport

• Lack of relevance (including to work)

Each is interesting, but…..

Examined in isolation each body of research tells only afragment of the story, and policies follow this approach.The inter-relationships and trade-offs between the differentforces at play, and their capacity to mutually reinforce oneanother, is lost from view. Policy often implicitly favoursmono-causal models.

Why has this happened?

1. Structure of incentives facing academics – REF and disciplinary boundaries. Synthesis = zero REF ratings. In many areas, nothing that cannot be boiled down to an academic journal article counts. Lack of inter-disciplinary fora.

2. Structure of research commissioning by different parts of government – each researches their own slice of the problem.

3. The research has been commissioned and conducted in a non-cumulative fashion.

Incentives – a missing link?In order to make sense of what we already

know, we need to bring together and understand

holistically how and why choices are made.

We also need to have a clearer and more

complete map of the incentives that act on people

when making their choices.

Incentives as a key focusUnderstanding the incentive structures

individuals face could be key to making

progress, but first we have to:

1. Know what the various incentives are

2. How they interact

3. What force they exert (not least relative to one another)

4. Have some model of how they might be altered

A framework for thinking about incentives?What follows is one (evolving and incomplete) attempt to developFramework to map, analyse, explain(and possibly think about how toalter) the incentives to learn

It engages with ‘theories of the middle range’

It aims to provide a focal point for a more integrative analysis ofdifferent streams of data on a range of economic, social and culturalstructures and forces.

Incentive generation through:The PULL

of opportunities, both to learn and to utilise that learning, for pleasure

(intrinsic reward), to benefit others (altruistic reward), or (financial) gain.

The PUSH

of resources, expectations and social relationships which enable and

sustain learning - e.g. educational institutions, teachers, courses,

libraries, systems of student financial and pastoral support, and also

cultural and social expectations and encouragement

(e.g. well-educated parents who help a child to learn through support,

exhortation and example).

Incentive Generation SequenceRESOURCE PUSH AND OPPORTUNITY

PULL|

Leading to|

INCENTIVES OF VARYING FORCE|

Leading to|

EFFECTS OF VARYING STRENGTH

A typology of incentivesType 1 Incentives: generated within the E&T system, producing intrinsic

rewards through the act of learning. Develop and sustain

positive attitudes towards participation and progression.

Type 2 Incentives: generated in wider society and the labour market, and the rewards they

create are external to the learning process itself.

Examples of Type 1 incentives• Curriculum design and pedagogic styles that

increase the intrinsic interest of learning.

• Forms of assessment that are designed to encourage further participation rather than ration access to the next level.

• Institutional cultures in schools and colleges that nurture potential and celebrate achievement.

Discussion of Type 1 incentivesEndless waves of educational reform around making:• Curriculum• Pedagogy/teaching styles• Assessment and certification• Institutional structures• Technology

In England, the evidence suggests that the limits of the PUSH that this can achieve have been reached (or indeed passed) – hence compulsory raising of learning age.

Examples of Type 2 incentives• Wage returns to particular qualifications or skills.• Other benefits (intrinsic interest of job, opportunities for

progression, travel, etc).• Social status from higher level occupation.• Licence to practice and mandatory CPD regulations • Cultural expectations within society or particular ethnic or

class segments therein.• Non-economic benefits to do with enhanced satisfaction

in other aspects of adult life –sporting, cultural, parenting, etc.

A new incentive sub-categoryType 1b Incentives

In recent times, in the UK, the failure of Type 2

incentives to prove strong enough to catalyse major

increases in participation have led policy makers to

introduce a range of subsidy-based incentives to act in

lieu of signals from the labour market. They assume that

Type 2 incentives cannot be changed, so substitutes are

needed.

There are a number of ways you can cross-cut Type 1&2 incentives:

• Coverage• Strength• Duration• Complexity and uncertainty• Complementarity

Analysing Type 1&2 incentives

Positive and negative incentivesBoth Type 1 & 2 incentives can generate either positive ornegative effects.

For example, the wage returns for an adult worker to getting a qualification may be positive, but the time/quality of life costs of out of working hours learning produce a stronger negative incentive.

Many people do not enjoy schooling, feel they ‘failed’ and this subsequently puts them off adult learning.

Incentive coverage• The strength, scale and certainty of many Type 1

incentives are dependent upon course, teacher, and institution.

• Incentives are mediated by individuals’ innate ability and preferences (e.g. many might wish to become a professional footballer, but not all will have the ability).

• Unequal societies and polarised labour markets will tend to produce unequally structured and distributed Type 1 & 2 incentives (we will return to this point)

Incentive strengthSome incentives are absolute - e.g. LtP regulation means the qualification is essential. In many OECD countries thisincentive has a large impact on participation and achievement in initial E&T.

Other Type 2 incentives vary greatly in their strength, and the tendency to use average RoRs disguises this. Large/Strong Incentives = academic, higher level, and elite institutions.Small/Weak Incentives = vocational, lower level, and lowstatus institutions – Wolf Review

Incentive strength cont.In some cases the incentive strength will be large

enough to over-ride narrow economic rationality.

More follow journalism, and performing arts

courses than can reasonably expect to gain

employment in these occupations.

Incentive durationThe immediate impact of many Type 1 Incentives is transitory, but they

can produce lasting positive dispositions towards the act of learning.

Many Type 2 Incentives operate across an entire working lifetime (e.g.

professional progression structures and CPD systems) encouraging

both engagement with initial E&T and also with continuing adult

learning.

Complex patterns of returnMany Type 2 Incentives are complex and uncertain - e.g.

the outcomes of acquiring a qualification vary according to:• Age• Gender• Type and level of qualification• Subject and occupation it is related to• Location in which learning takes place (workplace v. non-workplace)

and status of learning provider and awarding body.• Who pays for it.

Participation does not = achievementMany policy makers fail to apprehend that participation

imposes costs, while not guaranteeing achievement. Too

often the policy literature on E&T slides from participation

to achievement to labour market outcome, while ignoring

the risks.

Perhaps those choosing not to participate realise/calculate

they have a lower chance of achieving and are making a

rational choice?

Complexity = UncertaintyThose at the lower end of the ability range/labour

market often face the weakest and most uncertain

Type 2 labour market incentives.

For those who cannot aspire to enter Higher

Education, the choices may be poor, and

non-participation rational.

Grouping and complementarity

Incentives can reinforce or undermine one another. Good jobs produce strong incentives - pay levels, social status, progression & intrinsic interest. Bad jobs the opposite. In theUK, the geography of both good and bad jobs is becomingmore concentrated. In areas where bad jobs are growing, theincentives to local people to invest in learning may beweakening.

Boosting one incentive can reduce another. For example expanding HE will reduce the range of labour market opportunities and incentives available to non-graduates.Win/win scenarios are quite hard to contrive.

Qualifications and incentives – where the problems are!

The bottom end of the labour market- why are

incentives weak:• Weak occupational identities and low skill requirements• Narrow conceptions of vocational learning and skill, that

do not support progression• Competence-based qualifications that embody 1 & 2• A weakly-regulated labour market, little LtP• Hold of VQs on recruitment limited• Opportunities for labour market progression limited

And low end work is NOT vanishing

• Work by the IPPR (Lawton, 2009) makes it clear that the overall number of low paid jobs in the UK will not decline this side of 2020 and may rise.

• The New Economics Foundation (2012) show that the range of jobs available to non-graduates is shrinking and that most of the job growth for non-graduates is likely to be in the lowest paying sectors. Upskilling these workers will have marginal impact.

The retail sector as an example:

• Largest single occupational group in UK = retail assistants

• More people employed in retailing than in the whole of manufacturing

• Dominant model for other sectors – fitness centres, banking, etc.

• Morrisons is now England’s largest provider of ‘apprenticeships’ – vast bulk Level 2 in ‘customer service’

Qualifications and retail ‘careers’

• Internal labour markets are limited, there are few upward rungs.

• Those trying to climb them meet graduates cascading down from above – 29 per cent of all recent graduates working in management roles do so in retailing.

• Much lower end work is relatively de-skilled, and the specification of the vocational qualifications reflect this reality.

• Skill utilisation is often extremely poor (Wright and Sissons, 2012)

Some young male retail workers’ reactions to ‘training and quals:

• “This woman would come in once a week and review us serving a customer or something and then ‘wahey’ we got a certificate…[employers] are not sitting there saying ‘I hope someone with an NVQ in retailing comes along because we could really do with someone like that”

• They wasn’t actually giving us any training…It was a total waste of time. It’s like, if the government really wants everyone to have a qualification by their name, yeah sure it’ll work, but it’s not going to achieve anything”

(Johnson, 2012)

Incentives = certainty (and reasonable returns)

Recent UKCES research on the barriers and motivators for learning for low waged employees (McQuaid et al, 2012) showed that staff have a realistic expectation of their current jobs and thetraining it provides. The bad news is that to motivate them to invest time and money in whole qualifications there would need to be the promise of significant and reasonably certain wage gains.

And the evidence shows that….

• Returns to many L2 VQs are variable, complex and sometimes poor.

• Returns to L2 NVQs are very low and uncertain.

• Average returns are very misleading, as there is huge variation around the average.

Why low returns? - labour economics 101:

Interns Anonymous website:Posts that were previously being offered to new graduates are now being staffed by unpaid interns…why would a company fork out £15,000 to £20,000 a year for an entry-level fashion designer, when they have an endless supplyof people willing to do it for free?

Wolf Review of Vocational Education, 2011: 31Other things being equal, high (wage) returns to a particular form of qualification mean high demand for, or short supply of, the skills and qualities to which it attests

Scarcity is in short supply…

Over-qualification in England:

1986 – 29.3%

1997 – 31.7%

2006 – 39.6%

SOURCE: Felstead et al, 2007: 83.

And for young workers…

UK 18-24 year old non-students, bottom half of theoccupational ladder, proportions with A level, N/SVQ3/4, degree, sub-degree:

Personal Service Occupations – 42.8%Sales and Customer Services – 40.0%Process, Plant and Machinery – 14.6%Elementary Occupations – 22.9%SOURCE: Roberts, 2012.

With the result….

“the proportion of degree qualified 24-29 year olds in the UK who are workingin jobs that do not require this qualification is 26%....compared with an OECDaverage of 23%. This also occurs at intermediate level,but the extent is farlower (12%)….despite lower mismatch levels than at graduate level, when welook internationally the UK has the 2nd highest rate of under-employment atintermediate level in the OECD…large proportions of young people riskbeing under-employed in terms of their skills while at the same time non-graduates are significantly disadvantaged”

UKCES Youth Inquiry, 2011: 14

Forecasts from Working Futures:

UKCES and the Joseph Rowntree Foundation explored the

future shape of the labour market in 2020. They wanted to

see if hitting the Leitch targets would reduce poverty. It

didn’t!

They also found that by 2020, if nothing changes, in

England across the lowest 3 deciles of earnings (the 30%

of the labour force with the lowest wages), at least 30% of

these workers will have an NQF levels 4-8 (i.e. sub-degree

of above).

And……

• None of these problems can be solved by yet more interventions inside the E&T system, including reform of VQs, unless they are matched by interventions inside the labour market.

• The major incentive problems are with Type 2 incentives, not Type 1.

Implications for Policy• A close analysis of existing incentives may not support

the ‘happy ending’ that policy has already decided upon.

• Choices that appear ‘bad’ to policy makers may be more rational than policy makers choose to believe.

• A strong reliance on Type 1b Incentives is a good way to waste money. The real problems lie with cultural expectations, class structures, the shape of labour market and the lack of labour market regulation.

More ImplicationsBecause policy makers misread the incentive structure they

set schools and colleges up to fail, expecting them to

produce Type 1 incentives that can compensate for:• unemployment and poverty• lack of supportive parents and family life• poor housing• drug and alcohol abuse• limited local amenities• a local labour market that offers limited opportunities

i.e. a PUSH to compensate for lack of PULL factors

A Polarised Labour Market = Polarised Incentives

The larger the Higher Education sector, the smaller the

range of good jobs open to non-graduates. If the ‘top half’

of young people go into HE and ‘graduate jobs’, what do

the bottom half go into (and the bottom half of the bottom

half)?

In a world where the number of good jobs is finite, and the

number of less good (low paid) jobs may either be stable or

growing, there are real issues about the incentives on offer

to those destined to enter such work.

Individualisation fails“We need to change the culture in this country around

skills, so that when someone complains they are in a low-

paid, dead-end job, people ask them what they are doing to

improve their skills” – UK Government, 2007.

• But while you can train (or accredit) away low qualified workers, you cannot necessarily train away the jobs they occupy.

• Low pay is often the result of power imbalances (weak TUs, lack of collective bargaining) rather than skill

The individual does not control…..

• The product market strategies, models of production design, work organisation, job design and people management that their employer chooses.

• A more skilled worker may not be able to change them.

• The leverage that publicly-funded training interventions have to change them is also open to doubt.

The central paradox1. A continued belief in ‘flexible’ labour markets

2. A concern that there are too many bad jobs that are not vanishing of their own accord

3. Concern about social and income inequality, and lack of social mobility

4. A rejection of collectivist solutions to 2&3

5. An inkling that publicly-funded increases in E&T, of itself, will not solve these problems

The answer…….?Primary Answer:

Structural problems can only be addressed via

structurally-rooted solutions. Without change

in the way the labour market (rather than the

E&T system) operates, the incentives to learn

faced by lower end workers will remain poor,

patchy, weak and uncertain. VQ reform, on its

own, will produce limited results.

The answer…….?Secondary Answers:

The capacity of lower end vocational courses and

certification to support:• Wider learning and understanding (beyond the job task)• Economic empowerment• Subsequent learning and progression (intellectual and

career-related)• Citizenship and wider community roles

need to be expanded. Why are we aiming so low at

present?