From Aspirations to Occupations The Role of Information in Educational and Labor Market Decisions in Moldova Victoria Levin June 24, 2016
Outline Motivation Methodology and data Findings Policy implications 2
Outline Motivation Methodology and data Findings Policy implications 3
Increased productivity is needed to respond to the demographic challenge Age structure in Moldova, 2015 and 2060 Labor productivity in Moldova and comparators, 2012 Males Females GDP per person employed (1990 PPP) 35,000 100+ 90-94 30,000 2060 80-84 2015 25,000 70-74 60-64 20,000 50-54 15,000 40-44 30-34 10,000 20-24 5,000 10-14 0-4 0 250 200 150 100 50 0 0 50 100 150 200 250 Thousand people Source : UN World Population Prospects: 2015 Revision (left) and World Development Indicators (right). 4
Employment rates are very low, with many youth detached from the labor market Employment-to-population ratios, adult population (15+), 2014 70 % of working age population 60 50 40 30 20 10 0 NEET rate (population aged 15-29), 2012-2013 40% 30% 20% 10% 0% FYR Moldova Armenia Ukraine Russian Kyrgyzstan EU28 Macedonia Federation Male Female Source : WDI, modeled ILO estimates, (top graph) and School-to-work transition survey 2012-2013 (bottom graph) 5
Poor labor outcomes may come from skills mismatches Countries 14 where between 30% and 40% of 12 Number of Countries firms report BLR that “skills” KAZ 10 has become a UKR TJK severe MKD constraint to 8 ARM SRB growth AZE BGR GEO 6 CZE UZB HUN ALB 4 KGZ POL BIH MDA TUR MNE 2 LTA KOS SVN EST LVA ROM SVK HRV 0 EU10+1 and Turkey Western Balkans LI CIS MI CIS Source: BEEPS 2013
Large shares in upcoming cohorts seem to lack basic cognitive skills Proficiency in Reading, Moldova and Regional Comparators, 2010 100 600 90 Level 5&6 501 500 493 484 80 468 459 70 Level 4 400 390 388 374 60 362 Percent Score 314 Level 3 50 300 40 200 Level 2 30 20 100 Functionally illiterate 10 0 0 Overall reading score (right axis) Source: PISA 2010 results. 7
Bridging information gaps is critical to reduce skills mismatches Skills mismatches can arise from: • Education system • On-the-job training • Information gaps Particular relevance of information gaps in Moldova: • Midst of economic transition • Low urbanization • High migration • Lack of systematic career guidance Information constraints can be reduced through low-cost policy interventions
Outline Motivation Methodology and data Findings Policy implications 9
Moldova Jobs and Schooling Decisions Survey • Implemented during the 2014/2015 school year • Main objective : understand how individuals make their schooling and jobs decisions Number of Number of communities Respondents Group type Individual Individual FGDs FGDs interviews interviews 9 th graders 3 304 26 23 12 th graders 3 306 24 Professional school students 4 95 3 1 24 Collegium students 3 103 University students 3 3 102 25 Out-of-school youth who are jobless or in occasional jobs 22 3 203 21 Out-of-school youth with complete transition to the labor 2 2 No 0 14 market Parents of 9 th and 12 th graders No 2 0 16 Parents of professional school students No 1 0 7 Teachers of 9 th and 12 th grade No 2 0 16 1 2 FGDs mixing professional school and collegium students and 1 FGD with only professional school students 2 1 FGD with professional school and collegium graduates and 1 FGD with university graduates 10
Individual interviews: content • Sources of • Background information information • Household • Type of information taken into account composition • Education history Education and transitions Individuals’ and LM • Aspirations information information Labor Decision market influencers • Knowledge on • Extent to which earnings influencers are • Expectations on involved in the decision entry after education • Final decision maker • Job search methods
Focus Group Discussions: content Students Parents Teachers Young adults Students’ aspirations and education - Assessment of the community, school Module I and students How choices - Assessment of students’ future choices How choices were made are made - Factors that enable or constrain transitions Information sources, use and access - Transition into the first Module II job Their role as information channels - Labor market experience and values - Job search methods Module III Perceptions of career guidance activities 12
Outline Motivation Methodology and data Findings Policy implications 13
Educational and occupational decisions
Vocational education is as popular as general education among 9 th graders What do you want to do after...? 100% 80% 60% 20% 32% 40% 40% 29% 27% 20% 25% 36% 7% 4% 3% 0% All (N=304) Women Men (N=133) All (N=306) Women Men (N=112) (N=171) (N=193) …12th grade? ...9th grade? Professional school Collegium Lyceum University Study abroad Work Other Don't know yet 15
Educational aspirations are driven by perceived job opportunities 9 th graders: why do you want to continue studying there? Most important reason 60% 40% 20% 0% Good job Interest in Easy to Immediate First option Good To please Affordability Proximity to oportunities field of study study acquisition of that came to reputation parents home a profession mind Professional school Collegium Lyceum Study abroad Moderator: To what extent does your wish to find a job influence - your decisions regarding studies? - S : 98 percent. - Moderator : It matters that much? - All : YES! Focus group discussion with urban 12th graders 16
In choosing field of study, students opt for fields where vocation and job opportunities intersect Why would you choose/are you studying this field of study? 50% 40% 30% 20% 10% 0% Vocation Good job First option Good Immediate To please Other Easy to study opportunities that came to reputation acquisition of a parents mind profession 12th graders (prospective) Professional school (retrospective) Collegium (retrospective) University (retrospective) 17
However, many students lack occupational aspirations Ideally, what would you like to be doing when you are 30 years old? University students Collegium students Professional school students 12th graders 9th graders 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Armed Forces Legislators, senior officials and managers Professionals Technicians and Associate Professionals Working as… Clerical support workers Service and sales workers Craft and related trades workers Plant and machine operators, and assemblers Don't know 18
Gender differences in occupational aspirations are likely to translate to occupational disparities in the labor market What is the field of study you will most likely choose if you continue studying? (12 th graders) 40% 30% 20% 10% 0% Science, Humanities and Health Social Construction Education Sevices Agriculture and Other Manufacturing computing and art sciences, veterinary engeneering business and law Employment by gender and occupation, LFS 2014 40% 30% 20% 10% 0% Science, Humanities Health Social Construction Education Sevices Agriculture Other Manufacturing computing and art sciences, and veterinary and business and engeneering law Men Women Note : the exact question is “what are the two fields of study you will most likely choose if you continue studying? Indicate the top 2 options”, but the graph only shows the first option Field of study is approximated by type of occupation for the LFS. Additionally, only individuals with collegium education or more aged 25-34 are considered. 19 Source : Moldova Job and Schooling Decisions Survey and National LFS 2014
The role of information constraints
There is an information deficit on the labor market Do you think you have enough information about the labor market? Yes 100% • About half of 80% collegium students participating in MJSDS 60% underestimates the 40% education required to work in their ideal job 20% 0% 9th graders 12th graders Professional Collegium University (N=304) (N=306) school students students students (N=100) (N=99) (N=92) Men Women 21
Students perceive increasing returns to education, but certain important misperceptions exist Perceived and Actual Returns to Education after 9th Grade 350 wage index (9th grade=100) *** 300 *** 250 *** *** *** *** *** 200 *** *** 150 *** * ** 100 9th graders 12th graders Professional Collegium University LFS 2014 (25- school students students students 34 y.o) Perceived returns (MJSDS) Actual returns 3-year program in professional school (base) 12th grade Collegium Bachelor's degree Notes: Significant differences in the wage index compared to the base category of the 3-year professional school program: * 10%, ** 5%, ***1%. The wage index is calculated by setting the perceived monthly wages at age 30 after completing 9th grade as equal to 100. The actual returns to education are based on the results of a Mincer regression controlling for gender, age, marital status, education, and location. 22
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