United States General Accounting Office __________________________________________________________________ GAO Report to Congressional Requestors __________________________________________________________________ May 1990 TRAINING STRATEGIES Preparing Noncollege Youth for Employment in the U.S. and Foreign Countries Some of the information in this report--e.g., pictures, charts, and tables--was not in ASCII text format and not included. If you wish to obtain a complete report, call GAO report distribution at 202/275-6241 (7:30 a.m.-5:30 p.m. EST) or write to GAO, P.O. Box 6015, Gaithersburg, MD 20877. __________________________________________________________________ GAO/HRD-90-88 May 11, 1990 The Honorable James H. Scheuer Chairman, Subcommittee on Education and Health Joint Economic Committee Congress of the United States The Honorable Augustus F. Hawkins Chairman, Committee on Education and Labor House of Representatives This report, prepared at your request, contains information on (1) the weaknesses in the U.S. education and training system for preparing noncollege youth for employment and (2) foreign strategies that appear relevant to the U.S. shortcomings. It also includes policy actions that might be considered by the federal government and by state and local governments. As requested, we did not obtain written comments from the Departments of Education or Labor. We did, however, discuss matters described in this report with officials in these agencies, and their comments have been incorporated where appropriate. We are sending copies of this report to other congressional committees and subcommittees, the Secretaries of Labor and Education, and other interested parties. This report was prepared under the direction of Franklin Frazier, Director, Education and Employment Issues, who may be reached on (202) 275-1793 if you or your staffs have any questions. Other major contributors to this report are listed in appendix III. Charles A. Bowsher Comptroller General of the United States 1 B-238820 __________________________________________________________________ EXECUTIVE SUMMARY __________________________________________________________________ PURPOSE The United States is renowned worldwide for its college and university system, which provides extensive opportunity for higher education. Yet only about half of U.S. youth go to college. For the other half, U.S. education and training often provide inadequate preparation for employment. The perception that foreign competitors excel in world trade partly because their workers are better educated and trained prompted the Joint Economic Committee and the House Education and Labor Committee to ask GAO to compare how the United States and competitor countries prepare noncollege youth for employee. Specifically, GAO was asked to -- review U.S. education and training strategies and identify likely weaknesses and -- examine selected countries'strategies for preparing noncollege youth for employment. ___________________________________________________________________ BACKGROUND Experts are concerned that U.S. international competitiveness is being eroded because (1) many jobs are requiring greater skills and (2) youth are unprepared to meet the new labor market demands. Required skill levels are increasing in both the occupations with the fastest rate of growth and those projected to add most new jobs in the next decade. Poor literacy skills and employer reports that many youth applicants are unqualified for entry- level positions point up inadequacies in the preparation of youth for employment. 2 B-238820 For this study GAO examined four countries--England, the Federal Republic of Germany, Japan, and Sweden-- that try to develop a well-qualified noncollege youth work force. GAO reviewed literature on how the United States and these countries prepare noncollege youth for employment, consulted with experts who assessed the U.S. and foreign strategies, and visited the foreign countries to meet with knowledgeable persons and view the education and training systems firsthand. GAO cautions that necessarily succinct contrasts between U.S. weaknesses and foreign strengths in education and training often conceal U.S. strengths and foreign weaknesses in this area. __________________________________________________________________ RESULTS IN BRIEF Insufficient attention is devoted to preparing U.S. noncollege youth for employment. About 9 million of the nation's 33 million youth aged 16 to 24 will not have needed skills to meet employer requirements for entry-level positions--5.5 million dropouts and 3.8 million high school graduates who lack high school competency. The four competitor nations have national policies that emphasize preparing noncollege youth for employment. Specific approaches vary by country, are rooted in different traditions, and may be accompanied by problems of their own. Still, the following approaches used by some or all of the countries may be relevant for the United States: -- Foreign countries expect all students to do well in school, particularly in the early school years. Some U.S. schools, confronted with difficult social ills, often accept that many will lag behind. 3 B-238820 -- Foreign schools and the employment community guide students' transition from school to work to a greater degree than in the United States. Noncollege students leaving school receive more directed assistance in finding jobs than their U.S. counterparts. -- Competitor nations establish competency-based national training standards that they use to certify skill competency. The common U.S. practice is to certify only program completion. -- Competitors invest extensively in jobless out-of-school youth to assure them a job or further education and training. U.S. employment and training programs reach only a modest proportion of youth in need. GAO's ANALYSIS U.S. Shortchanges Noncollege Youth The foreign countries tend to invest proportionately more than does the United States in noncollege education and training. The United States invests heavily in college education but does not do equally well by its young people who seek immediate employment. From the customary end of compulsory education at age 16 through age 24, less than half as much is invested in education and training for each noncollege youth as for each college youth (see pp. 12 and 23-24). Expectations That All Students Will Do Well in School Young adults in the foreign countries have higher literacy levels than those in the United States. In the United States, academic difficulties frequently 4 B-238820 are evident in the early years, with many children unprepared for school entry and many in school not keeping pace with expected levels of progress. Certain practices of the other countries, such as providing comparable educational resources to all schools, emphasize providing equal educational opportunity to all youth regardless of differences in socioeconomic status and academic talent. For example: -- Japan provides uniform teacher salaries and per capita school funding, so that poorer areas have educational resources that are comparable to more affluent ones. -- Sweden gives extra resources to needy schools, such as those in remote rural areas or with large immigrant populations. Assistance in Transition From School to Work The foreign countries help students learn about job requirements and assist them in finding employment to a greater extent than does the United States. One major element is the involvement of employers. For example: -- Joint school-employer programs provide work experience for secondary school students. -- Japanese employers recruit high school seniors through the schools, basing hiring decisions on schools' recommendations. -- Employers train over two-thirds of youth in the Federal Republic of Germany through apprenticeships that usually last 3 years. Employers provide on-the-job skill training for 3 or 4 days a week, and apprentices attend school the remaining 1 or 2 5 B-238820 days for instruction in mathematics, language, other academic subjects, and vocational skills. Establishment of Skill Training Standards Germany in particular, and more recently England, seek to maintain quality occupational training by testing and certification to meet national standards. Trainees who attain tested levels of competency receive nationally recognized certification, which employers look to as evidence of particular levels of skill. In the United States, certificates for trainees often certify course completion and not necessarily attainment of specific skill levels. Extensive Investment in Jobless Youth The foreign countries seek to assist most youth who encounter employment problems. For example, Sweden guarantees education, training, or work to every jobless teenager upon leaving school. England guarantees every jobless 16- and 17-year-old out-of- school youth up to 2 years' work experience and training. POLICY CONSIDERATIONS Shortcomings in the U.S. system for preparing noncollege youth for employment, and some apparently effective approaches identified in foreign systems, point to types of action that might be considered to improve education and training in the United States. However, the foreign approaches may not be entirely appropriate or readily transferable because of cultural and other 6 B-238820 differences. Also, alternate mechanisms for applying the approaches may be needed. In addition, directing more attention to youth who seek employment rather than go on to college should not detract from widely available college opportunity in the United States, a practice in which the United States generally surpasses its foreign competitors. Notwithstanding these cautions, the following appear to warrant consideration by the federal, state, and local governments: -- Strive to ensure that all children attain the academic skills necessary to perform effectively in postsecondary education or the workplace. Notably, greater emphasis should be given to providing needed early intervention programs and adequate educational resources for all children. -- Develop more school-employer linkages, particularly to expand combined education and work (apprenticeship-type) programs and to assist youth to obtain suitable entry-level employment. Adopting effective education and training strategies nationwide to improve national productive capability and international competitiveness will require strong leadership and an active federal role. The executive branch is the logical focal point for national responsibility. The Department of Education, in combination with the Department of Labor, can play a leadership role in helping state and local officials and business and labor representatives work more effectively to equip U.S. noncollege youth to meet the nation's need for well-qualified future workers. (GAO did not analyze potential costs or funding sources.) 7 B-238820 AGENCY COMMENTS GAO did not obtain written agency comments on this report, but discussed the matters described in the report with officials from the Departments of Education and Labor. Their comments have been incorporated where appropriate. 8 B-238820 CONTENTS Page -------- ---- EXECUTIVE SUMMARY 2 CHAPTER 1 INTRODUCTION 12 Background 12 Foreign Education and Training 16 Objectives, Scope, and Methodology 21 CHAPTER 2 U.S. STRATEGIES FOR PREPARING YOUTH FOR 24 EMPLOYMENT Overview of U.S. System 24 Levels of Educational Attainment 26 Public Investment for College and 27 Noncollege Youth Weaknesses in U.S. System 28 CHAPTER 3 FOREIGN STRATEGIES FOR JOB PREPARATION 37 Emphasis on All Youth Doing Well 37 Structured School-to-Work Transition 38 Recognized Skill Standards 42 Extensive Investment in Jobless 43 Youth CHAPTER 4 CONCLUSIONS AND POLICY CONSIDERATIONS 46 APPENDIXES APPENDIX I: Methodology for Estimating Investment 48 in Youth and Training APPENDIX II: Training for Non-college- 59 Bound Youth APPENDIX III: Major Contributors to 62 This Report BIBLIOGRAPHY 63 9 B-238820 RELATED GAO PRODUCTS 72 TABLES Table 1.1: Fastest Growing 13 Occupations (1988-2000) Table 1.2: Occupations with Largest 14 Job Growth (1988-2000) Table 1.3: Selected Characteristics 17 of the Five Countries Table 2.1: Estimated Level of 26 Education Completed Through Age 24 (Youth Age 16-24 in 1988) Table 2.2: Average Public Investment 27 Per Youth for Education and Training (Ages 16-24) Table 3.1: West Germany's 10 Leading 41 Training Occupations by Sex (1987) Table I.1: Second-Chance Programs' 52 Annual Expenditures for Youth Table I.2: Postsecondary Noncollege 56 Training: Public Annual Expenditure for Youth Age 16-24 Table I.3: Estimated U.S. Public 58 Investment in Youth Education and Training During 9 Years From Age 16 Through 24 by Level of Education FIGURES (The following figures are not included because they could not be viewed as ASCII text.) Figure 1.1: International Expenditures on Education: Preprimary Through Secondary Education (1985) Figure 1.2: International Expenditures for Special Youth Measures (1987) 10 B-238820 Figure 1.3: International Expenditures for Education: Preprimary Through Higher Education (1985) Figure 1.4: Federal Republic of Germany, Type of School Attended (1986) Figure 1.5: High School Attendance in Japan (1985) Figure 2.1: Long-Term Effects of Head Start ABBREVIATIONS GAO General Accounting Office JTPA Job Training Partnership Act NCES National Center for Education Statistics OECD Organization for Economic Cooperation and Development 11 B-238820 CHAPTER 1 --------- INTRODUCTION ------------ BACKGROUND ---------- Increasing international competition and advancing technology require a more highly skilled U.S. work force. But recent studies and widespread reports from employers indicate that many youth are ill-prepared for employment.#1 A skill-deficient young work force hampers the nation's economic growth, productivity, and ability to compete with foreign countries. Some foreign competitors may excel in part because they more effectively prepare their work force, paying close attention to the education and training of their noncollege youth. The United States provides extensive opportunity for a college education for a large proportion of its youth. Our colleges and universities are the envy of the world. Yet with work-force quality becoming a key element in U.S. competitiveness, the education and training of noncollege youth become increasingly critical. This report addresses how nations prepare for work those youth who do not go to college, exploring the relevant educational practices of the United States and of four countries selected for their experiences in training a skilled work force. Mismatch Between Worker Skills ------------------------------ and Job Demands --------------- The basic skills gap between what business needs and the qualifications of entry-level workers is widening in the United States. Jobs are demanding increasingly skilled workers at the same time that many workers are inadequately prepared for the work force. 1Michael Dertouzos, Richard Lester, Robert Solow, and the MIT Commission on Industrial Productivity. Made in America: Regaining the Productive Edge. The MIT Press, 1989; Irwin Kirsch and Ann Jungeblut. Literacy: Profiles of America's Young Adults. National Assessment of Educational Progress, Educational Testing Service, 1986; U.S. Department of Labor, U.S. Department of Education, and U.S. Department of Commerce, A Joint Initiative. Building a Quality Workforce, July 1988. 12 B-238820 Many jobs of the future will demand more skilled labor. Most of the occupations projected to grow fastest require moderate to high skills (see table 1.1). For example, health service and computer technology-related occupations are projected to increase by half over the next decade. Opportunities in many of these occupations are limited for those without higher levels of education. Table 1.1: Fastest Growing Occupations (1988-2000) Number of jobs in thousands Projected increase in jobs -------------------------- Occupation Number Percentage ---------- ------ ---------- Paralegals 62 75 Medical assistants 104 70 Home health aides 160 68 Radiologic technologists and technicians 87 66 Data-processing equipment repairers 44 61 Medical records technicians 28 60 Medical secretaries 120 58 Physical therapists 39 57 Surgical technologists 20 56 Operations research analysts 30 55 Securities and financial services sales workers 109 55 Travel agents 77 54 Computer systems analysts 214 53 Physical and corrective therapy assistants 21 52 Social welfare service aides 47 52 Occupational therapists 16 49 Computer programmers 250 48 Human services workers 53 45 Respiratory therapists 23 41 Correction officers and jailers 76 41 Source: George Silvestri and John Lukasiewicz, "Projections of Occupational Employment, 1988-2000," Monthly Labor Review (Vol. 112, No. 11, Nov. 1989), p. 60. 13 B-238820 In addition, while many low-skill occupations will continue to employ many people (see table 1.2), their skill requirements are expected to increase to some extent even, for example, in janitorial and messenger jobs. Skills increasingly needed to perform many jobs include the ability to connect practice and theory; identify problems; and then analyze, test and troubleshoot, and adapt to new technology.#2 Table 1.2: Occupations with Largest Job Growth (1988-2000) Number of jobs in thousands Projected increase in jobs -------------------------- Occupation Number Percentage ---------- ------ ---------- Salespersons, retail 730 19 Registered nurses 613 39 Janitors and cleaners 556 19 Waiters and waitresses 551 31 General managers and top executives 479 16 General office clerks 455 18 Secretaries, except legal and medical 385 13 Nursing aides, orderlies, and attendants 378 32 Truck drivers 369 15 Receptionists and information clerks 331 40 Source: George Silvestri and John Lukasiewicz, "Projections of Occupational Employment, 1988-2000," Monthly Labor Review (Vol. 112, No. 11, Nov. 1989), p. 60. As skill levels are increasing, employers are finding that many young workers are inadequately prepared for many entry-level as well as most higher-skilled jobs. Employers largely agree that entry-level workers should read at least at the 8th grade level. Many hold, moreover, that the increased technological content of instruction manuals, coupled with greater demands on workers to maintain the equipment they operate, requires an 11th or 12th grade reading level. Yet an estimated 20 percent of young American adults cannot read at the 8th grade level and 40 percent cannot 2Dale Parnell, The Neglected Majority (Washington, D.C.: Community College Press, 1985), p. 14. 14 B-238820 read at the 11th or 12th grade levels.#3 In a joint report of the Departments of Labor, Education, and Commerce, two-thirds of the employers consulted assessed the current pool of entry-level applicants as insufficiently prepared in academic skills.#4 This is a particular concern for minorities and the economically disadvantaged, who traditionally have had lower levels of educational achievement than others. About 85 percent of young white adults are literate at the 8th grade level, as compared with 70 percent of Hispanics and 50 percent of blacks.#5 Costs of Inadequate Preparation ------------------------------- The inadequate preparation of young noncollege workers has both individual and social costs. The unprepared individual forgoes considerable earnings over a lifetime while contributing to lagging national productivity growth and social welfare cost increases. One year's cohort of high school dropouts and deficient high school graduates may forgo an estimated $150 billion to $300 billion in earnings over their lifetimes, or about $135,000 to $300,000 per individual.#6 In addition, the government is likely to incur increased expenditures to address social problems, such as crime, drug abuse, prison, and welfare, estimated conservatively at $10 billion.#7 To what extent these losses could be recouped 3Literacy rates for young adults, age 25 to 29. Kirsch and Jungeblut, Literacy: Profiles of America's Young Adults. 4Building a Quality Workforce. 5Literacy: Profiles of America's Young Adults. 6The ranges cited are based on differing assumptions of the portion of the income differential attributable to differences in educational attainment. 7The costs of inadequate preparation were estimated by GAO using methodologies developed by James S. Catterall, Professor of Education, University of California at Los Angeles. Catterall estimates that the 973,000 dropouts from the nation's high school "Class of 1981" will lose $228 billion in personal earnings over their lifetimes, while society will lose $68.4 billion in taxes (James S. Catterall, "On the Costs of Dropping Out." California: Institute for Research on Educational Finance and Governance, December 1985). Similarly, the Committee for Economic Development estimated that each year's class of dropouts costs the nation more than $240 billion in lost earnings and forgone taxes over their lifetimes. Additionally, billions more will be spent on crime control and on welfare, health care, and other 15 B-238820 through increased investment in education and training is unclear; however, that significant costs will be incurred because of an ill- prepared work force is indisputable. How Do Our Trade Competitors Do? -------------------------------- Our economic competitors face similar economic pressures, but experts perceive Japan, for example, as being ahead of the United States in preparing noncollege youth for the labor force and providing them with adequate academic skills. A comparison of literacy levels finds that over 85 percent of young people in England and over 90 percent in Japan, Sweden, and West Germany have the equivalent of at least eighth grade literacy. In contrast, only 80 percent of their U.S. counterparts function at an eighth grade level or higher. Also, national and international tests show that many U.S. students, while able to grasp basic mathematics skills, cannot handle problem solving or other higher- order thinking tasks. Comparing the educational abilities of American youth with those of foreign youth suggests problems for future U.S. competitiveness. FOREIGN EDUCATION AND TRAINING ------------------------------ The four countries we reviewed--England, the Federal Republic of Germany, Japan, and Sweden--are more homogeneous in population than the United States, although each has some immigrant subgroups. Their populations are also considerably smaller than the United States' 246 million. (See table 1.3.) social services disproportionately required for ill-prepared youth (Children in Need: Investment Strategies for the Educationally Disadvantaged. Committee for Economic Development. New York, 1987). 16 B-238820 Table 1.3: Selected Characteristics of the Five Countries United West States England Japan Sweden Germany ------ ------- ----- ------ ------- Population 1988 (millions) 264 48 122 8.4 61 Youth (15-24) as percentage of population 15 14 15 14 17 Unemployment rate, 1988 (percent): Adult (25 +) 4.2 7.6a,b 2.2 1.3 6.7c Youth (Under 25) 11.0 12.8a,b 4.9 3.3 7.6c Percentage of youth in vocational curriculum 30 18 28 50 70d Postsecondary enrollment rates 57% 21%a 30% 37% 30% University enrollment rates#e 36% 8%a 24% 26% 26% aUnited Kingdom (England, Scotland, Wales, and Northern Ireland). bPreliminary data. c1987 for West Germany. dThe approximate percentage participating in apprenticeship. eConferring baccalaureate level degrees or higher. According to a recent study,#8 the countries spend proportionately more of their Gross Domestic Product#9 than does the United States for preprimary, primary, and secondary schooling. (See fig. 1.1.) Similarly, they spend more for special measures to help youth enter the work force, such as subsidized work experience, remedial education and training, and direct job creation for youth. (See fig. 1.2.) However, when expenditures for college education are combined with precollege 8The Economic Policy Institute, Briefing Paper, Shortchanging Education: How U.S. Spending on Grades K-12 Lags Behind Other Industrial Nations, 1990. 9Gross Domestic Product is similar to Gross National Product, which is the value of all final goods and services produced in an economy in a given year. 17 B-238820 education expenditures, the United States spends proportionately more than any other industrial country except Sweden. (See fig. 1.3.) Figure 1.1: International Expenditures on Education: Preprimary Through Secondary Education (1985) (Could not be viewed as ASCII text.) Source: Economic Policy Institute. Figure 1.2: International Expenditures for Special Youth Measures (1987) (Could not be viewed as ASCII text.) Note: Japan has no special youth measures. Over 90 percent of youth finish high school. Source: Organization for Economic Cooperation and Development. Figure 1.3: International Expenditures on Education: Preprimary Through Higher Education (1985) (Could not be viewed as ASCII text.) Source: Economic Policy Institute. Following is a brief description of the countries' education and training systems. England: Investment in Jobless Youth ------------------------------------- Schooling in England is compulsory until age 16. At 16, English youth may -- continue their education for 2 more years in high school for an "advanced level" certificate, sometimes with the aim of going on to a university or a polytechnic institute; -- enter a technical or other "further education" college (similar to a community college in the United States), sometimes continuing on to a university or a polytechnic institute; or -- enter the work force. About half of British youth leave full-time schooling at age 16. A 1989 report by a Confederation of British Industry task force states that: "Britain has one of the lowest rates of participation in post compulsory education and training of all the 18 B-238820 OECD countries#10 and produces a much smaller number of school leavers educated to the standards required by a modern economy . . . ."#11 Concern about inadequacies in the preparation of young workers led England in the 1980s to adopt a series of major revisions in its education and training system. Notably, it has undertaken to establish -- requirements for world of work orientation, including work experience for all secondary students; -- national skills standards developed by industry and government, together with tests for certifying competence levels; and -- a Youth Training Scheme guaranteeing up to 2 years of work experience and job training for all 16- and 17-year- old jobless out-of school youth. Federal Republic of Germany: Training Through Apprenticeships -------------------------------------------------------------- Primary school in the Federal Republic of Germany serves children from age 6 to 10 (or 11 in some states), after which the young people are separated into three discrete curricular paths: -- Hauptschule, leading primarily to blue collar apprenticeships. -- Realschule, offering training for higher level but nonacademic occupations, with many of the graduates entering white collar apprenticeships. The graduates also can gain admission to a senior technical school. -- Gymnasium, leading to university admission. A few "lander" (states) have established comprehensive schools in response to pressures to alleviate the rigidity of the triple- track system. Also, in recent years a larger proportion of youth 10Britain consists of England, Scotland, and Wales. The Organization for Economic Cooperation and Development (OECD) is composed of 24 countries, largely of western Europe, plus Australia, Canada, Japan, New Zealand, and the United States. It seeks to promote world and member country economic growth policies. 11Towards a Skills Revolution - A Youth Charter, Interim Report of the Vocational Education and Training Task Force, Confederation of British Industry, July 1989. 19 B-238820 have been attending realschule and gymnasium. Thirty- nine percent of eighth graders attended hauptschule in 1986 (see fig. 1.4), in contrast to over 50 percent in 1975. Figure 1.4: Federal Republic of Germany, Type of School Attended (1986) (Could not be viewed as ASCII text.) At age 15 or 16, upon completion of compulsory full-time schooling, most youth enter apprenticeships that usually last 3 years. The apprenticeship system is known as the "dual system," because it provides training both on the job and in compulsory part-time school. Youth who initially are unable to obtain an apprenticeship typically attend 1 year of vocational school before trying again to enter the dual system. Dual system trainin