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Abstract

Education plays a crucial role in Europe's future. Yet it seems that the educational systems throughout Europe do not relate well to the overall labour market. This article will look at the educational systems in Europe and present best practices, while examining recent policies in the area of education.

Keywords

Education Employment Dual system of vocational training Youth policies Youth guarantee Master's degree loan guarantee scheme

Introduction

In times of crisis any corresponding shortages are pointed out. These may be a shortage in tax revenues resulting in tightened federal budgets, a shortage of overall employment opportunities, or a shortage of certain skills and abilities that prevent the younger generation from entering the labour market. This apparent deficiency in the provision of skills is often indicated in current efforts to reduce youth unemployment. It is revealed in policies such as the youth guarantee and the agendas of politicians, which both focus primarily on reducing youth unemployment among those aged under 25.

So the question to be tackled in this article is whether there are persistent shortages in the provision of education which cause certain needs of the labour market not to be filled. What methods already exist to close the gap between education and employment–-and where does Europe need to improve? What role can and should formal education play?

Point of departure: soaring youth unemployment, its measurement and its sources

Youth unemployment has been at an all-time high since the crisis hit Europe, challenged the legitimacy of its union and demonstrated the imperfections of its common currency. While for too long the issue of the unemployed youth has been underestimated, one has to be careful not to focus on issues which are caused by deeper, structural problems: policies, and their implementation, must face a close examination.

While the overall unemployment rate in the EU (EU27) rose from 9.0% in 2003 to 10.5% in 2012, the data for unemployment among young people show that it rose from 18.5% to as much as 22.8% in the same period (Eurostat 2013a). The difference here is significant, and marks out the particularities affecting the younger generation.

A distinction must be made between the unemployment rate and the unemployment ratio. While headlines often state that as many as half of the youth in southern Europe are jobless, this only refers to the unemployment rate. The unemployment rate is pictured in comparison to the labour force. Full-time students who are neither working nor seeking employment alongside their studies are not included in the labour force. However, they would be included in the main unit if the unemployment ratio is measured. An example: if one looks at the Greek unemployment rate, which compares unemployed young people with the population aged 15–24 who have already joined the labour force, it is at a high of 55.3% (Eurostat 2013b). If this figure is compared with the unemployment ratio for the same age group, it is just 16.1% (Eurostat 2013b). Many young Greeks are still in education during these years of their lives, so the simple expression that half of Greece's youth is without work is a fallacy. However, whether the unemployment rate for the young population is at 16.1% (Greece) or at 20.6%, as it is in Spain, it is disproportionately high for the younger generation (Eurostat 2013a). And this is not just true for countries in the south of Europe. Where there are inflexible labour laws in force, the younger generation often faces difficulties entering the labour market in the first place. The transition from education to the labour market creates certain frictions. Even in the years of economic boom, some countries, such as Spain, were experiencing high rates of youth unemployment. Thus youth unemployment is not a new phenomenon, but a reality that has only been taken account of recently.

Moreover, as Gros (2013) points out, it is important to consider how youth unemployment relates to overall unemployment. In the above-mentioned countries, Spain and Greece, youth unemployment accounts for less than a quarter of the overall unemployment level. However, in Sweden and the UK, youth unemployment accounts for as much as 40% of overall unemployment. This is a frightening figure, since it reveals the high hurdle that needs to be overcome to become a successful part of the labour force. It also shows that youth unemployment is not a particularly ‘southern’ problem. Therefore, it needs to be acknowledged that policymakers are gearing up to increase opportunities for the younger generation. It is crucial that the problems that the younger generation is facing are dismantled, so that careful measures can be found to tackle the root of the shortcomings and a suitable, smart framework can be implemented. It is time to act.

The role of higher education

The role that higher education must play in this context is crucial. In recent years, enrolment numbers for higher education institutions have been growing throughout Europe. While in 1998 there were about 15 million students in the EU, by 2008 this number had reached 19 million (Statista 2013). This is good, because Europe does not possess endless resources and must invest in the younger generation so that it can shape a vision for its future.

While any cooperation between the private sector and public universities should be appreciated, it will depend on the success of this as to whether we will manage to create universities that, as has been Europe's legacy, support the development of free, creative and critical thinking. Therefore, it is not advisable to recommend or ‘prescribe’ in which direction studies should be accomplished. Motivation cannot be generated if secondary school leavers are pushed into studying fields which they cannot relate to. It is important to point out the opportunities and to discover talent. However, trials in which the aim has been purely to match studies with labour market needs have failed in the past and will continue to fail. The direction of studies cannot be steered by an overall institution, since this attempt hardly allows for the innovation which is a necessity in the ever-changing world we live in today, nor can such attempts foresee the future. Competences and expertise need time to be developed, so if certain shortages in a particular field in the labour market appear, these demands tend to be fulfilled to excess after a time, a result referred to as the ‘hog cycle’ in production theory (Hanau 1928).

Thus, it is better to stick to what is known as Say's Law. This law indicates that supply will trigger demand, and this principle of economics should be just as applicable to education. To sustain growth, specialists are needed. But growth also requires human beings who can provide a certain set of skills, human beings who have learned to reason critically, who stay curious, and who are aware of the historic path that we traverse every day. Human beings encompass far more than just logical reasoning, thus growth also requires the broader framework of education, which reaps a society that reinvents itself while conscious of its heritage.

Employability and enablement

Some of these competences are reflected in the term ‘employability’. Yorke (2006, 8) defines employability as ‘a set of achievements–-skills, understandings and personal attributes–-that make graduates more likely to gain employment and be successful in their chosen occupations, which benefits themselves, the workforce, the community and the economy.’ The term ‘employability’ hints at the working world that the younger generation is entering. While it used to be common for individuals to join a company and stay there for most of their working life, the reality now is that people change not only their positions but also their employer more frequently. These adjustments among the labour force in the understanding of which skills, which ‘tool-set’, are required by the labour market, and the accompanying mindset shaped by this approach, allow for the changes in the labour market. Whereas adjustments can be interpreted as challenges, innovation and knowledge also prompt new opportunities for employment. Such opportunities have arisen, for example, from the development of the Internet, and many jobs have been created in that field which did not exist before. Similarly, it can be expected that the future will see further developments, further opportunities and further jobs created. Therefore, training and education cannot be interpreted too narrowly. It will, in fact, be necessary for education to provide the skill set, as described above, to enable the individual to further develop and adjust to the changing environment. While certain features are more easily generated than others, the term ‘enablement’ is the one that makes the difference. The state must not provide the individual with everything.

However, educational policies should aim to provide incentives so that the market can find adequate solutions. Moreover, effective career services and strong coaching can contribute their fair share to the realisation of the best path at any stage of career development.

Once talents are discovered, they need to be developed. To promote studies and make them available to a wider student body, independent of the financial background of families, tools such as state financial help and scholarships are available. While scholarships are usually available to encourage talent, many young people do not apply for them, since they do not think of themselves as entitled to them, even if they would qualify.

Student loans, another common method of financing education, are not very popular either. From a banking perspective, the amounts asked for in student loans are usually too small to justify a full credit assessment by the banking institutions. However, students can feel insecure about these procedures, which can be perceived as too complicated, resulting in even fewer applications for loans, even if a loan could present a reasonable way of financing studies.

Similarly to entrepreneurial activities or small start-ups, for studies–-particularly those in innovative areas or in the field of humanities–-it is difficult to calculate the worth of an acquired skill, let alone where that skill might be used. To put a value on it by making assumptions about the additional cash-flow generated from that additional qualification is almost impossible for banking institutions. It will always hold true that the value of any qualifications acquired, or skills learned, will depend heavily on the use that is made of them.

Master's degree loan guarantee scheme and mobility

However, one method that is being implemented currently to tackle this issue is the Master's degree loan guarantee scheme. It provides students that plan to spend the entirety of their Master's studies abroad with more affordable loans. By doing so, it tackles the complexity of the EU and the different levels of economic development in which citizens live.

When applying for financial help with studies, national facilities may already be in place in some countries of the European higher education area (EHEA). However, these facilities focus on students who study in that particular country. If students intend to study abroad, only schemes through the Erasmus + framework are available. Yet these do not cover the entirety of, for example, a Master's programme, but just the period for which students may apply to study abroad. Thus, a gap exists where students want to study abroad for the entirety of a study programme: there is no framework in place under which students can apply. This is the point of departure for the Master's degree loan guarantee scheme. Here it is useful to provide a European solution in the form of a European framework.

The Master's degree loan guarantee scheme aims to increase the mobility of students, providing them with knowledge which they could not otherwise acquire in their home countries: certain curricula are not taught in each Member State of the EHEA but require the student to study abroad in order to learn from the best in the desired field of expertise. This mechanism will lead not only to better education through increased competition among higher education institutions, but will also provide students with additional skills that could not be attained otherwise: living in a different society, and learning about and from different cultures and languages, will result in increased flexibility concerning the future employment of that graduate. It will increase employability–-the graduate will have proven that he or she can adjust to different environments, and that he or she is willing to invest in his or her future. This policy is to be appreciated as an approach that is being used in order to enable young people to learn, achieve and be proud of their accomplishments. While the guarantee may still represent a risk for banking institutions, the risks imposed through such credit lines are much smaller than those imposed by a generation that is held back from performing at its fullest. Other ways to support education and mobility have already been implemented or are in the process of being implemented.

Recently, one may have observed the rapid development of ‘massive open online courses’ or ‘MOOCs’, which make single classes and, even more recently, entire degrees available for individual studies via the Internet. The impact of such online courses and their supporting platforms should not be underestimated. EdX, the successful not-for-profit start-up from Harvard and the Massachusetts Institute of Technology, had an astonishing student body of 370,000 students in the autumn semester of 2012 (Pappano 2012). And Coursera, a for-profit MOOC provider founded in January 2012 by Andrew Ng, a professor at Stanford University, had a total of almost two million enrolled students within its first year of existence (Pappano 2012).

Using economies of scale, these classes are made available online to a ‘massive’ audience; the individual, on the other hand, can determine the speed at which the subject is studied. The distinctive point in comparison to former long-distance learning is that interaction is technologically viable now, thus increasing the effects of study. While, for a final examination a visit to a testing centre may currently be necessary, technology is being developed which will recognise whether the same person who took classes is taking the exam. This might result in testing centres becoming obsolete in the future. With MOOCs, a single or a few classes can enable an individual to tap into knowledge and prove his or her abilities, or gain some initial experience in a new field. This will help individuals who are trying to progress from one profession to another. The transition will be smoother, and the expectations and requirements of the profession can be clarified. Through these private initiatives, new technologies have already altered the world of higher education significantly, and we should stay curious about the impact that such changes will have in the future.

Europe might have found an answer to the MOOCs presented above. With diversity, which came online in October 2013; Future Learn in Britain, which started operating in September 2013; Eliademy, founded in Finland in early 2012; and others it has tried to provide a European answer to the US MOOCs (Schuetze 2013). In his article, Schuetze also notes that Spanish and French MOOCs are planned. The European solution enables the cultural dimension of the EHEA to be fulfilled by providing classes in different languages. While it would ideally provide courses in as many languages as possible, the critical mass remains a factor not to be forgotten. The teaching staffs of MOOCs are not sufficient to be able to answer all the questions arising with respect to the courses offered. By reaching a ‘mass’ however, it is hoped that the self-correcting nature of the group can be of use–-a phenomenon that can be seen from the development of online sources such as Wikipedia in recent years.

With technological developments experiencing shorter innovation cycles, new methods have just entered the qualification process for certain professions. Entry into careers that used be accessed only by a degree gained from a university through a formal process is increasingly being supported by informal qualifications or classes taken online as described above.

While costs for higher education are not as high in Europe as they are in the US, the recognition of courses via the European Credit Transfer and Accumulation System (ECTS) as it is used within the Bologna framework is crucial for both the acceptance and use of online courses and studies abroad.

The Erasmus + framework has come to be very familiar and much appreciated since the programmes it encompasses were first initiated more than 25 years ago. They are familiar to a wider public. The programmes the framework comprises not only tackle higher education but also school exchanges (Comenius), vocational training (Leonardo da Vinci) and adult education (Grundtvig). All of these programmes rely on the learning effects that can be generated by an exchange of best practices and cultures. A rise of about 40% in the educational budget of the EU is provided for during the time span of the Multiannual Financial Framework 2019 to 20; therefore the framework expects to reach an even wider public than before.

All these support programmes aiming at an increase of mobility within Europe will strengthen our continent in the long run. While the Erasmus programme has been in effect for a long time, only 2.5% of the population in the EU lives in a Member State other than the one in which they are from (Eurostat 2012). Europe has certainly not reached its goal yet. But how can mobility be further increased and academic exchange be supported so that the younger generation can enter the labour market more easily? While universities themselves are not the entire solution to the gap in youth employment, they are also not the problem. Europe possesses excellent universities (Times Higher Education 2012).¹

The Times ranking of universities lists 32 universities in Europe among the world's 100 best in 2012-13. Among the best 150, Europe provides an astonishing 62 and has 84 universities ranking among the best 200 universities worldwide.

Moreover, it is the market and its companies which are in need of qualified employees and so they should help to provide the solution and live up to this responsibility for their own benefit. This is important since education can never be thought of as a concept detached from the private sector and production. While education should develop reasoning and thinking, this gained knowledge must be put into action. Education cannot be considered a ‘closed world’: it is closely related to the environment surrounding it, including the labour market.

Market solutions, responsibility and the dual system of vocational training

Consequently, Europe should look to the free market and its companies to find solutions. Examples of best practice may be found across Europe. In some countries, such as Austria and Germany, companies, regardless of their size, acknowledge that they need experts and so they take on the responsibility of developing talented people themselves (Statistisches Bundesamt 2013). While large companies such as Daimler, BASF and Siemens operate their own schools, smaller companies work together with others from the same or a similar industry and in cooperation with educational institutes to offer a dual system of vocational training.

Secondary school leavers who do not anticipate pursuing a purely academic career may opt for this education. While the theoretical part of the programme is still taught in an educational institution, the practical part is learned under the direction of the companies. Students have the opportunity to gain in-depth knowledge and, at the same time, learn about the economy while actually working for a company that provides them with hands-on experience, rather than in the bubble of academia. Industry bodies and chambers of commerce alike are involved to ensure that the levels of work and teaching match up. In this way, students get a better insight into the actual job and the working environment. They learn the reasoning behind some of the more difficult parts of their courses, since they are more easily able to recognise their application and usefulness, and they can decide more clearly on whether they are in the right field for them since they are in the working environment from the very first day of their training. They are also part of a real workplace, in which they are contributing measurably to the performance of a company, and this results in greater satisfaction. Since the parts of the programme which are taught at educational institutes are learned in a class, the students also gain a wider experience of their work environment through exchanges with their classmates.

This system has led to lower drop-out rates. Only 6.9% of students who study in the vocational system drop out of their courses in Germany, while the student drop-out rate at universities or conventional colleges varies between 19% and 35% depending on the field of studies (compare Hamburger Abendblatt 2013 and Stifterverband für die Deutsche Wissenschaft 2013).

Come in and find out! Education opportunities

The question remains of how to ensure that young people learn about their talents and are able to choose the direction in which they wish to develop their expertise. Austria, which has the lowest unemployment rate within the European Union at 4.3% (Eurostat 2013a), uses tailored coaching and counselling so that individuals are better informed about the actual options and opportunities available to them.

Many jobs are not widely known, while for others, there are more applications than education opportunities available. It remains an important task to better present the employment opportunities and professions that exist in the market, as there is a very high concentration in particular fields, while other professions are little known. For example, 55.2% of all female and 36% of all male apprentices in Germany's largest federal state study for as few as 10 recognised occupations that require formal training (Sell 2013).

While it is true that many young people are not aware of all the different employment and educational opportunities that exist, it also holds true that not every job requires a thorough academic background to be accomplished well. There are many alternate pathways somewhere in between full-time academic study at university and an apprenticeship through the system of dual vocational training.

Conclusion

Higher education needs to adjust to the world we live in today. While universities will play an important role, their role does not encompass the labour market and its needs in their entirety. Europe must learn from its best practices: it needs strong universities, but it must also allow for greater diversity in education and training.

Successful models such as the dual vocational system must be considered across Europe. In order to leave room for personal and professional growth, work experience and informal education must be acknowledged more thoroughly. Europe does not need to follow one model, but it does need to highlight opportunities for the younger generation and enable them; it must become more open to mobility and flexibility so that the younger generation in Europe can progress into the labour market easily and stay on the competitive edge.

Footnotes

Eva Majewski is Chair of the European Democrat Students, the EPP's official student organisation. Before joining the European office of the Konrad-Adena-uer-Stiftung as a research associate, she worked in the German Bundestag as an advisor for finance and taxation. She holds an M.Sc. in business administration, management and economics from Humboldt University, Berlin.

References

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