IS LIFELONG LEARNING WORTHWHILE?

Transcription

1 IS LIFELONG LEARNING WORTHWHILE? Author(s): Anneleen Forrier 1. Abstract After the Top of Lisbon, lifelong learning has grown into one of the top priorities of the European employment strategy. The Government of Flanders and the social partners share this focus. The fact that lifelong learning is indispensable for employability in our rapidly changing society is being challenged by few. And yet, research results about the impact of lifelong learning seem to put this strong belief in the added value of lifelong learning somewhat in perspective. Studies at a micro, meso and macro level point towards different effects and don't always tell the same story. To pursue a well-defined and well-balanced, activating labour market policy, a good understanding of the impact of lifelong learning on individuals, organisations and society is therefore of crucial importance. This paper is based on a literature study which developed an overview of the key findings at the three research levels. It led to the following conclusions. The multitude of studies available on this theme all largely support the idea that lifelong learning is worthwhile both for individuals, organisations and society. However, they question an exaggerated belief in its impact. At the individual level, It appears that lifelong learning is not necessarily worthwhile for each and every person. Also, there are indications that those who have not yet found the way to lifelong learning, may not enjoy an equally positive effect from education and training as the ones who did. Other activation measures might be advisable for this group of people. In short, it cannot simply be asserted that lifelong learning is bridging the gaps in the labour market. Also, research clearly shows that training programmes are not the most effective employment strategy. Not everyone benefits from a 'training shower'. A tailored employment strategy seems to be the most effective solution. For organisations, training and education are mainly targeted at attitudes and motivation of staff. In addition, the return on investment of much training is high due to positive impact on company performance (productivity, competitiveness, quality). Another positive aspect is that managers believe in the added value of training (although many overestimate its impact). Still, research does not show an undisputed effect of lifelong learning on financial performance. Another returning question is why organisations invest in training and education. Research shows that one of the key objectives of training is to eliminate acute knowledge and qualification deficiencies. Training mainly works as a lubricant to reduce friction between education and the labour market, or between external and internal labour markets. Organisations are, first and foremost, concerned about their business, and they have every right to be. A government policy that puts continuous employability and 'lifelong learning' on the agenda should indeed pay attention to the training efforts undertaken by organisations, but those efforts should not become its primary point of focus. The growing attention for individually attributable rights to education (also in collective labour agreements) is therefore very welcome. The added value of lifelong learning for society is unmistakable. Spillover effects and externalities further enhance that added value. In the case of spillover, the effects of education and training not only have an impact on the individual (and hence on society), they can also reflect on others. Externalities include the beneficial effects for health, life expectancy and the environment, a reduction of the criminality rate and the positive impact on democratisation and distribution of prosperity, etc. These conclusions show how important it is for the government to develop an adequate policy regarding lifelong learning. And yet, at present there is insufficient clarity about the extent to which displacement effects, i.e. worse employment perspectives for unskilled people, may jeopardise the added value of lifelong learning for society. Further study is recommended. Key words: Lifelong learning, activating labour market policy, individual, organisation, society 1

2 2. Objectives Several studies on the impact of education and training try to demonstrate the actual added value of lifelong learning for individuals, organisations and society. These studies do not always provide an unambiguous image. To pursue a well-defined and well-balanced, activating labour market policy, a good understanding of the impact of lifelong learning on individuals, organisations and society is of crucial importance. In that context, a literature study was carried out to investigate the key findings at all three levels and draw lessons for future labour market policies. With respect to individuals, the study addressed the following questions: (1) "Is lifelong learning worthwhile?" (2) "Is lifelong learning worthwhile for everyone?" (3) "Is lifelong learning more, or less worthwhile than other measures that aim at increasing individuals' chances in the labour market?" Two independent variables were examined in this context: wages and employment opportunities. In order to outline the impact of lifelong learning at an organisational level, the study focused on the following result indicators: (1) HR indicators, e.g. turnover, motivation, etc.; (2) performance indicators, e.g. productivity, quality, competitiveness; and (3) financial indicators, e.g. profitability. Studies that examine the benefits of lifelong learning for society investigate the impact of training and education at an aggregate level. This study focused on the following indicators: (1) wages; (2) productivity; (3) labour market participation and (4) spillover effects and externalities. Clarification of key concepts The research distinguished between education and training. Most studies define education as a formal learning process that leads to a certificate (Blundell et al., 1999). Training, on the other hand, is covered by a wide spectrum of definitions, most of which assume that it is work-related and aims at gathering knowledge, skills and attitudes for (either or not immediate) application in a position or work area (Simons & Thijssen, 2005). Blundell et al. (1999, p.6) define training as courses designed to help individuals develop skills that might be of use in their job. 3. Methods and data The researchers opted for a literature study that focused on studies into the impact of training and education at an individual level, at an organisational level and at a social level. 4. Findings 4.1 Impact on the individual - micro level Information about participation in education and training by 25 to 64 year olds in Flanders shows that there is still a lot of work to be done (Policy Research Centre for Work and Social Economy). Participation in education and training must increase and the educational and age gaps must be bridged in order to accomplish the Pact 2020 targets. Many research projects into lifelong learning already investigated which aspects could have a positive effect on participation in lifelong learning, but the question remains whether that is all there is to it. Does increased participation in education definitely lead to more equality and a better labour market position for everyone? Existing research was consulted to find an answer to that question. In this context, a distinction was made between the impact of lifelong on (1) wages, and (2) the chances of employment. The study also addressed the question how lifelong learning relates to other employment measures. The literature study resulted in the following four conclusions. (1) Lifelong learning is worthwhile. Research indicates positive effects from both education and training on wages and chances of employment of individuals. The importance attached to lifelong learning by policy-makers is therefore justified. Yet, it does merit some reservations: (2) Lifelong learning is not worthwhile to the same extent for everyone. Several studies show that education and training create higher wages for disadvantaged groups in the labour market, such as women and low-skilled people. For the higher age groups, however, training is more likely to affect the chances of employment than wages. These conclusions could suggest that lifelong learning may help to close some gaps in the labour market. This must be approached with caution. First of all, most studies focus on the impact of training within a disadvantaged group, e.g. women who took training vs. those who didn't. Hence a positive impact of lifelong learning does not necessarily imply closure of the gap between men and women or between low-skilled and higher educated people. Secondly, some studies point at the importance of unobserved heterogeneity. The positive impact of lifelong learning is not simply an effect from education or training; it also involves different attitudes, motivation and unobserved capacities between participants and non-participants. Research indicates that those who have not yet found the way to lifelong learning, may not enjoy an equally positive effect from education and training as the ones who have. (3) Not all forms of lifelong learning are worthwhile. Some types of education and training have greater impact than others. However, research findings are not unambiguous and often don't allow for comparison, one of the reasons being the vast difference between types and descriptions of education between countries and research projects. Nonetheless, we made an attempt at an overall 2

3 conclusion. One important finding is that adult education generates a lower income yield than basic education. Diplomas have a positive effect on the actual wage in general, but to a lesser extent when they are obtained at a later age. As far as training is concerned, this is likely to have a higher impact when it involves transferable knowledge. (4) Lifelong learning is less worthwhile than work experience programmes. To be able to appreciate the full added value of lifelong learning, we investigated how it compares to other employment measures. Most studies compare the effects of different employment measures on the chances of employment and corresponding wage development for the unemployed. This research shows that lifelong learning has an important positive impact, particularly from a long-term point of view. It also shows, however, particular added effectiveness from employment programmes aiming to increase the work experience. Not everyone benefits from a 'training shower'. A tailored employment strategy might prove to be the most effective. These conclusions indicate that however justified, the attention for lifelong learning should not turn into blind optimism. Lifelong learning is not a panacea for all evils. 4.2 Impact on the organisation - meso level Lifelong learning is generally accepted as providing added value for individuals. There is less unanimity as regards the importance of education and training for organisations. Those in favour of training argue that qualified staff contributes to the performance, competitiveness and innovative power of an organisation. Sceptics point at the possible impact of training on staff turnover due to the increased employability of trained employees. The same sceptics also underline the often limited transfer of what has been learnt towards the workplace (Alliger et al., 1997). To check to which extent education and training constitute added value for organisations, we made an overview of the existing findings regarding the impact of educational and training efforts on company results. Pursuant to research into the impact of human resource management (HRM) on company performance, the following result indicators for education and training were examined: (1) HR indicators, e.g. turnover, motivation...; (2) performance indicators, e.g. productivity, quality, competitiveness; and (3) financial indicators, e.g. profitability. Research shows that training and education have the largest impact on human resource indicators. In that context, the correlation between education/training and attitudes and motivation is higher than the correlation between education/training and staff turnover. Personnel from organisations that provide more training usually display higher work satisfaction and more commitment. The correlation between education/training and staff turnover is less clear. Most studies indicate a lower staff turnover for organisations that provide more training, but others find a positive correlation and establish that organisations with high staff turnover provide more training. Since most of the research is cross-sectional, the direction of the causality remains unclear. Furthermore, education and training also affect a number of performance indicators (quality being the most important one). Hence training does indeed offer added value at the organisational level, yet it has less impact on an organisation s financial performance. This is hardly surprising given the fact that the distance between HR practices and financial performance indicators is bigger and that the latter are influenced by numerous other factors. Still, these results must be placed into perspective. Due to different measurement of both training and company indicators it is hard to make general assumptions. In addition, most studies are cross-sectional, which makes it hard to make assumptions about causality and its direction. Very few studies try to find the impact of different kinds of training (e.g. on-the-job training versus formal education) and hardly any of them look into the actual participants (e.g. high potentials vs. operating staff). Nevertheless, depending on the type of training and on the target group, the correlations with the above-mentioned company indicators could provide a totally different outcome. The earlier described findings on a micro level underline this assumption. 4.3 Impact on society - macro level The benefits of lifelong learning for individuals (so-called private return) can also be transferred to other levels, for instance to the entire economy or society. This is called 'social return'. If the government seeks to encourage education and training, insight into this social return is essential. Several studies have examined the impact of lifelong learning on society. They all look at the effects at an aggregate level and use dissimilar indicators such as (1) wages; (2) productivity; (3) participation in the labour market; and (4) spillover effects and externalities. (1) Studies that examine the effect on wages of lifelong learning at a social level, compare the total costs of education and training with the sum of the gross wages of individuals who enjoy the education and training. Several studies thus produce a 6 to 12% social rate of return for education (Wilson & Briscoe, 2004). This is in line with the rates of return of other forms of capital. Hardly any/no studies calculated the social rate of return for training. (2) Several studies indicate that the educational level of the employment population is closely related to economic growth. Developing countries feel the greatest impact of an increased share of people with a primary or secondary school certificate in the total working population. For developed countries, the greatest effect is produced by an increase in the number of highly educated people. (3) OECD analyses (2004) indicate a strong correlation between the level of initial education and additional training in a country on the one hand, and participation in the labour market on the other. However, they do not show a correlation between education and training and unemployment rate. The fact that training does not go hand in hand with a lower aggregate unemployment rate, but does correspond with a lower risk of unemployment for educated 3

4 individuals, might point to a displacement effect, which means that training one person may reduce the employment perspectives of an untrained person. However, further analyses do not confirm this assumption and indicate that displacement effects are limited (OECD, 2004). (4) Several studies show that education and training generate spillover effects. This means that the effects of education and training not only have an impact on the individual (and hence on society), but can also reflect on others. Research indicates that besides showing a higher productivity rate, trained workers also have a positive effect on the productivity rate of their untrained colleagues. In addition, there are externalities, such as the beneficial effects on health and life expectancy, a reduced criminality rate, a positive influence on the environment and on democratisation and distribution of prosperity, etc. The above conclusions demonstrate the important social added value of lifelong learning. The discussion on spillover effects and externalities further shows that investments in lifelong learning not only benefit economic growth and participation in the labour market, but also have an impact on other areas with social value. 5. Conclusions and policy implications The multitude of studies that have been discussed in this research all largely support the idea that lifelong learning is worthwhile for individuals, organisations and society. They do, however, add reservations with respect to an exaggerated belief in its impact. From an individual point of view, lifelong learning does not appear to be worthwhile for each and every person. Also, there are indications that those who have not yet found the way to lifelong learning, may not enjoy an equally positive effect from education and training as the ones who have. Other activation measures might be advisable for this group of people. In short, it cannot simply be asserted that lifelong learning is bridging the gaps in the labour market. Also, research clearly shows that training programmes are not the most effective employment programme. Not everyone benefits from a 'training shower'. A tailored employment strategy might prove to be the most effective solution. At an organisational level, training and education seem to be largely targeted at attitudes and motivation of staff. In addition, many investments in training pay for themselves due to their positive impact on company performance. Another positive aspect is that managers believe in the added value of training (although many overestimate its impact). And yet, lifelong learning does not affect the financial performance of organisations. Another returning question is why organisations invest in training and education. Earlier conducted research shows that one of the key objectives of training is to eliminate acute knowledge and qualification deficiencies. Training works as a lubricant to reduce friction between education and the labour market, or between external and internal labour markets. Organisations, are, first ande foremost, concerned about their business, and they have every right to be. A government policy that puts continuous employability and 'lifelong learning' on the agenda should indeed take consideration of the training efforts of companies, but that should not be its exclusive focus. The growing attention for individually attributable rights to education (also in collective labour agreements) is therefore very welcome. The added value of lifelong learning for society is unmistakable. Spillover effects and externalities further enhance that added value. This conclusion shows how important it is for the government to develop an adequate policy regarding lifelong learning. Still, at present there is insufficient clarity about the extent to which displacement effects could jeopardise the added value of lifelong learning for society. Further study is recommended. Despite the multitude of existing findings, further study may provide yet better insight into the value of lifelong learning. Most studies at an individual level are based on British and American data sets, so better insight into the situation in Flanders is recommended. At a company level, there is little knowledge about the extent to which the type of training and target group affect the correlation between lifelong learning and company indicators. This must be investigated to enable a more distinct comparison of the findings on a micro and meso level. As said earlier, the macro level requires more insight into the displacement effects. Furthermore, it is important to check whether overqualification of the working population could have negative effects in the long run and destroy the added value of lifelong learning. Finally, longitudinal research at a micro, meso and macro level is recommended to allow for better determination of the direction of the causality. More research must also shed light on the extent to which selection effects play a role. This issue has been the subject of extensive debate in econometric literature for quite some time. Several methods, each with their advocates and opponents, have been suggested in order to deal with the problem of 'selection bias' (see Bollens, 2000). They distinguish between experimental and non-experimental approaches. The former try to simulate the traditional lab experiment. Usually the group of individuals who volunteer for a measure are 'randomly' split up into two groups: (1) the treatment group, that is allowed to participate in the measure, and (2) the control group, that is excluded from participation. A subsequent comparison between the two groups, e.g. for career development, is then carried out. Because both groups agreed in principle to participate in the measure, there is no 'self-selection' issue. However, it is impossible to set up an experimental design of this type for each measure. Furthermore, it gives rise to ethical questions since this method deliberately excludes certain people from a measure. The non-experimental design is an alternative method. Based on traditional ways of data collection, such as surveys, the aim is to form a group of individuals with maximum comparability to the group of individuals who participate in the measure. Here, it is 4

5 important to develop models that take account of selection effects. Several techniques are already available that, for instance, allow for simultaneous estimates of the selection mechanism and the outcome mechanism. This type of analysis requires high-quality longitudinal data. Full reference of study report(s) and or paper(s) and other key publications of the study summarised here Forrier, A. (2009). Loont levenslang leren? De impact van levenslang leren op micro-, meso- en macroniveau. Over. Werk. Magazine of Steunpunt WSE (Policy Research Centre for Work and Social Economy), 19(1), pp Alliger, G., Tannenbaum, S., Bennett, W., Traver, H. & Shortland, A. (1997). A meta-analysis on the relations among training criteria. Personnel Psychology, 50, pp Blundell, R., Dearden, L., Meghir, C. & Sianesi, C. (1999). Human capital investment: the returns from education and training to the individual, the firm and the economy. Fiscal Studies, 20(1), pp Bollens, J. (2000). Impactevaluatie van actief arbeidsmarktbeleid. Paper for WAV-SISWO congress, 17 November OECD (2004). Improving skills for more and better jobs: does training make a difference? In Employment Outlook, Chapter 4. Paris: OECD. Simons, P. & Thijssen, J. (2005). Opleiden in organisaties. In F. Kluytmans, Leerboek Personeelsmanagement. Deventer: Kluwer Bedrijfswetenschappen. Wilson, R. & Briscoe, G. (2004). The impact of human capital on economic growth: a review. In P. Descy, & M. Tessaring, (Eds.). Impact of education and training. Thessaloniki: Cedefop Reference Series 54. Zwick, T. (2006). The impact of training intensity on establishment productivity. Industrial Relations, 45, pp