The leading source of labour statistics

Indicator description: Employment by education

Introduction

Human resources are the most valuable and productive resource. Countries depend on the health, strength and skills of their workers to produce goods and services for consumption and trade. The advance of complex organizations and knowledge requirements, as well as the introduction of sophisticated machinery and technology, means that economic growth and improvements in welfare increasingly depend on the degree of literacy and educational attainment of the population. People’s predisposition to acquire such skills can be enhanced by experience, informal and formal education, and training.

Information on the employed population by level of educational attainment provides insights into the human capital dimension of employment with potential implications for both employment and education policy.

ILOSTAT contains statistics from national sources on employment by level of educational attainment, also disaggregated by sex and age. Statistics are available using both aggregate and detailed categories of educational attainment.

Concepts and definitions

Employment comprises all persons of working age who during a specified brief period, such as one week or one day, were in the following categories: a) paid employment (whether at work or with a job but not at work); or b) self-employment (whether at work or with an enterprise but not at work).1Resolution concerning statistics of work, employment and labour underutilization, adopted by the 19th International Conference of Labour Statisticians, Geneva, October 2013

The working-age population is the population above the legal working age, but for statistical purposes it comprises all persons above a specified minimum age threshold for which an inquiry on economic activity is made. To favour international comparability, the working-age population is often defined as all persons aged 15 and older, but this may vary from country to country based on national laws and practices (some countries also use an upper age limit).

Data presented by level of education is based on the International Standard Classification of Education (ISCED). The ISCED was designed by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in the early 1970s to serve as an instrument suitable for assembling, compiling and presenting comparable indicators and statistics of education, both within countries and internationally. The original version of ISCED (ISCED-76) classified educational programmes by their content along two main axes: levels of education and fields of education. The cross-classification variables were maintained in the revised ISCED-97; however, the rules and criteria for allocating programmes to a level of education were clarified and tightened, and the fields of education were further elaborated. In 2011, a new classification ISCED 2011 was introduced; however, reporting according to ISCED-11 did not start until 2014.2For further details on ISCED 2011, see UNESCO: International Standard Classification of Education/ISCED 2011 (Paris, 2012)

Statistics on employment by level of educational attainment are presented in ILOSTAT according to both the categories of the latest version of the ISCED available and aggregate categories, based on the following correspondence table:

Aggregate level of educationISCED-11ISCED-97
Less than basicX. No schoolingX. No schooling
0. Early childhood education 0. Pre-primary education
Basic1. Primary education 1. Primary education or first stage of basic education
2. Lower secondary education 2. Lower secondary or second stage of basic education
Intermediate 3. Upper secondary education 3. Upper secondary education
4. Post-secondary non-tertiary education4. Post-secondary non-tertiary education
Advanced5. Short-cycle tertiary education 5. First stage of tertiary education (not leading directly to an advanced research qualification)
6. Bachelor’s or equivalent level
7. Master’s or equivalent level6. Second stage of tertiary education (leading to an advanced research qualification)
8. Doctoral or equivalent level
Level not stated 9. Not elsewhere classified ?. Level not stated

Recommended sources

Labour force surveys are the preferred source of statistics on employment by educational attainment, since they provide information on both the labour market situation of individuals and their level of educational attainment. Such surveys can be designed to cover virtually the entire non- institutional population of a given country, all branches of economic activity, all sectors of the economy and all categories of workers, including the self-employed, contributing family workers, casual workers and multiple jobholders. In addition, such surveys generally provide an opportunity for the simultaneous measurement of the employed, the unemployed and persons outside the labour force (and thus, the working-age population) in a coherent framework.

Other types of household surveys and population censuses could also be used as sources of data on employment by educational attainment. The information obtained from such sources may however be less reliable since they do not typically allow for detailed probing on the labour market activities of the respondents.

Interpretation and use of the indicator

Continual economic and technological change means that the bulk of human capital is now acquired not only through initial education and training, but increasingly through adult education and enterprise or individual worker training, within the perspective of lifelong learning and career management. Unfortunately, quantitative data on lifelong learning, and indicators that monitor developments in the acquisition of knowledge and skills beyond formal education, are sparse. Statistics on levels of educational attainment, therefore, remain the best available indicators of labour force skill levels. These are important determinants of a country’s capacity to compete successfully and sustainably in world markets and to make efficient use of rapid technological advances. They also affect the employability of workers. 

Examining education levels in relation to employment is also useful for policy formulation, as well as for a wide range of economic, social and labour market analyses. Statistics on levels and trends in educational attainment of the employed can: (a) provide an indication of the capacity of countries to achieve important social and economic goals; (b) give insights into the broad skill structure of the employed population; (c) highlight the need to promote investments in education for different population groups; (d) support analysis of the influence of skill levels on economic outcomes and the success of different policies in raising the educational level of the workforce; (e) give an indication of the degree of inequality in the distribution of educational resources between groups of the population, particularly between men and women, and within and between countries; and (f) provide an indication of the skills of the existing employed population, with a view to discovering untapped potential. 

Limitations

A number of factors can limit the comparability of statistics on employment by level of educational attainment between countries or over time. Comparability of employment statistics across countries is affected most significantly by variations in the definitions used for the employment figures. Differences result from age coverage, such as the lower and upper bounds for labour force activity. Estimates of employment are also likely to vary according to whether members of the armed forces are included. Another area with scope for measurement differences has to do with the national treatment of particular groups of workers. The international definition of employment calls for inclusion of all persons who worked for at least one hour during the reference period.3The application of the one-hour limit for classification of employment in the international labour force framework is not without its detractors. The main argument is that classifying persons who engaged in economic activity for only one hour a week as employed, alongside persons working 50 hours per week, leads to a gross overestimation of labour utility. Readers who are interested to find out more on the topic of measuring labour underutilization may refer to ILO: “Beyond unemployment: Measurement of other forms of labour underutilization“, Room Document 13, 18th International Conference of Labour Statisticians, Working group on Labour underutilization, Geneva, 24 November – 5 December 2008

Workers could be in paid employment or in self-employment, including in less obvious forms of work, some of which are dealt with in detail in the resolution adopted by the 19th ICLS, such as unpaid family work, apprenticeship or non-market production. Some countries measure persons employed in paid employment only and some countries measure “all persons engaged”, meaning paid employees plus working proprietors who receive some remuneration based on corporate shares. Other possible variations to the norms pertaining to measurement of total employment include hours limits (beyond one hour) placed on contributing family members before for inclusion in employment.4Such exceptions are noted in the footnotes and/or metadata fields in ILOSTAT’s data tables. The higher minimum hours used for contributing family workers is in keeping with an older international standard adopted by the International Conference of Labour Statisticians in 1954. According to the 1954 ICLS, contributing family workers were required to have worked at least one-third of normal working hours to be classified as employed. The special treatment was abandoned at the 1982 ICLS.

Comparisons can also be problematic when the frequency of data collection varies widely. The range of information collection can run from one month to 12 months in a year. Given the fact that seasonality of various kinds is undoubtedly present in all countries, employment figures can vary for this reason. 

The way in which employed individuals are assigned to educational levels can also severely inhibit cross-country comparisons. Many countries have difficulty establishing links between their national educational classification and ISCED, especially with respect to technical or professional training programmes, short-term programmes and adult-oriented programmes (ranging around levels 3, 4 and 5 of ISCED-97 and ISCED-11). In numerous situations, ISCED classifications are not strictly adhered to; a country may choose to group together some ISCED categories. It is necessary to pay close attention to the notes in order to ascertain the actual distribution of education levels before making comparisons. 

An issue that affects several countries in the European Union originates from the way in which those who have received their highest level of education in apprenticeship systems are classified. The classification of apprenticeship in the “secondary” level – despite the fact that this involves one or more years of study and training beyond the conventional length of secondary schooling in other countries – can lower the reported proportion of the labour force or population with tertiary education, compared with countries where the vocational training is organized differently. This classification issue substantially reduces the levels of tertiary education reported by Austria and Germany, for instance, where the participation of young people in the apprenticeship system is widespread. 

There is also the potential for further confusion as to how a person’s educational level is to be defined. Ideally, when making cross-country comparisons, all data should refer to the highest level of education completed, rather than the level in which the person is currently enrolled, or the level begun, but not successfully completed. However, because data are usually derived from household surveys, the actual definition used will inevitably depend on each respondent’s own interpretation.