The return to improved educational qualifications. An analysis of the Portuguese case

An educated labour force is increasingly perceived as a crucial resource to support technology-intensive and knowledge-intensive growth in industrialised countries. The emphasis on the skills and competences of employees goes along with the importance attached to a progressive enlargement and deepening of individual capabilities able to meet the evolution of workplace requirements. The switch from a clear-cut separation between education and working life to an overlapping of educational and training experiences centred on the concept of lifelong learning involves noteworthy consequences. First, formal education and training become two opportunities in a range of multiple learning sources that also include non-formal learning and informal learning (European Commission, 2000). Second, adult education (including formal, non-formal, and informal learning) turns into a viable means to improve the skills and competences of the existing labour force (Colardyn and Bjornalvold, 2004). Despite prospecting an attractive opportunity to improve the quality of existing labour stocks, adult education involves huge public investment but prospects uncertain returns in a comparatively distant future. Significant doubts exist on the effectiveness of adult education in improving the labour market outcomes of participating employees, for instance by augmenting career opportunities and earnings. The Portuguese case provides an interesting chance to assess the short-, medium-, and long-term effects of upgrading individual educational achievements. Starting from year 2000 subsequent Portuguese governments supported a range of initiatives aimed at improving the educational qualification of the labour force in Portugal by means of adult education, validation and certification of individual competences, and accomplishment of education curricula interrupted by young adults. The efforts of subsequent Portuguese governments developed across two main steps. The first phase (2001-2005) focused on basic educational qualifications (corresponding to the completion of the 4th grade, the 6th grade, and the 9th grade of Portuguese curricula) whereas the second phase, labelled “Novas Oportunidades initiative”, involved the certification of competences corresponding to both basic and secondary education (up to the 12th grade of Portuguese curricula). Also when new educational qualifications were achieved by means of validation and certification of existing competences, i.e., without acquiring additional capabilities, participants in the program were expected to increase their career opportunities thanks to better signalling in the labour market. In addition, participants also had the chance to develop new skills by joining adult education courses to fulfil drawbacks in their competence portfolio identified during the certification process.\ud Judgement of the program outcomes is still controversial. On the one hand, the initiative had a sizable impact on the Portuguese labour market. Over 400.000 Portuguese adults achieved a higher educational qualification between 2006 and 2011 (Sistema de Informação e Gestão da Oferta Educativa e Formativa). In addition, in a sample of participants 32% recognised a positive impact of the Novas Oportunidades initiative on their professional life (CEPCEP, 2010). On the other hand, preliminary analyses displayed very small effects of the initiative on employability and even negative effects on earnings (Lima et al., 2012). Quadros de Pessoal (QdP), a longitudinal archive of linked employer-employee data on the Portuguese labour market, offers a rich testbed to provide a new assessment of the impact of improved educational qualifications on the labour market outcomes of adult employees in Portugal in the first decade of this century. The proposed analysis searches for systematic differences between earnings increases and job improvements achieved by employees who upgraded their educational qualification and a control group of employees who did not change their educational certificates. In addition, the effectiveness of the efforts enacted by Portuguese governments after 2000 is testes by comparing participants and non-participants in adult education in three distinct period: • a reference period before the launch of the Novas Oportunidades initiative (1996-2000); • the first phase of the program aimed at improving labour force education in Portugal (2001-2005); • the second phase of the Novas Oportunidades initiative (2006-2010). Preliminary evidence shows overall increase of educational levels, also due to adult education and competence validation and certification programs; steeper increase of education levels in the years of Novas Oportunidades compared to the baseline period; faster wage growth for participants; and higher job mobility for employees who improved their educational qualifications