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'Transforming the future' can have different connotations in different contexts, but here the author focuses on the way in which the vocational education and training (VET) sector is adapting, anticipating and activating change in response to future skill demands. This discussion paper explores how the sector assists learners to skill, upskill and reskill, which in turn actively contributes to the Australian economy. Without a doubt, the past few years have been both difficult and unpredictable for many, with the ongoing COVID-19 pandemic and other natural disasters such as bushfires and floods. This paper therefore also considers how the VET system has been able to adapt to these unforeseen events and what can be learnt from these responses and adapted for the future.

This paper summarises the exploratory quantitative analysis undertaken to investigate how vocational education and training (VET) students cluster and segment in the Australian VET market. This analysis is outlined in three sections. The first section focuses on 'clustering' as a technique for grouping data and the three clustering algorithms used. These are then discussed in more detail to provide some insights into how they operate. Their specific data requirements, along with their strengths and weaknesses, are also considered. In next section the outputs of the clustering approaches are considered. The resultant clusters are examined to better understand them, and meaningfully label and group them into segments. The final section returns to the raw data. This step was necessary to further explore (in this case, only some of) the identified market segments. Three key market segments are explored: students in targeted English programs; students in social inclusion programs; and migrant students.

"The student journey: skilling for life" is the theme for the 28th National Vocational Education and Training Research Conference 'No Frills'. In this discussion paper, we look at how vocational education and training (VET) supports lifelong learners. We explore VET's role in assisting lifelong learning and seek to understand how VET will need to transform in the future to enable it to confront the challenges of an increasingly complex and changing world. We also profile the various lifelong learner types.

This paper explores how teenage thinking about jobs and careers relates to adulthood labour market outcomes. The OECD working paper "Career Ready? How schools can better prepare young people for working life in the era of COVID-19" (ED613604) identifies career certainty, alignment and ambition as relevant indicators related to career thinking. This paper extends analysis of these indicators to new longitudinal datasets from Australia, Denmark, and Switzerland, and incorporates two new indicators, instrumental motivation and career concentration. The findings provide further evidence that teenage career ambition, certainty, alignment, instrumental motivation and broad occupational expectations relate to positive employment outcomes, including in periods of economic turbulence. However, this is not always the case and on some occasions, this association is found only in specific subgroups. Finally, the paper presents evidence from the academic literature, analysis of OECD PISA data and accounts from practitioners, which focus on ways in which schools can foster students' career thinking.

Governments recognise that careers guidance, underpinned by accurate labour market information, can help learners make post-secondary education choices that match their interests, aptitudes and abilities, and lead to rewarding employment. For this reason, they have invested in building linked education/employment information systems and other information resources which are displayed on websites targeted to learners and their families. However, researchers and governments agree that these efforts are often ineffective in informing learners' decisions -- access to information is not sufficient to provide effective support to student choice. Drawing upon the insights of behavioural economics, this paper examines how learners access and use information, and what this implies for the design of public study and career choice websites that aim to effectively support student choice. The report also takes stock of the career guidance websites in use in the majority of OECD countries, and sets out to provide actionable advice for policy makers to guide the design of effective information policy levers that support student choice.

This paper traces the evolution of Australia's apprenticeship and traineeship system since permanent European settlement in 1788. The system was imported from Great Britain; it has evolved and diverged in some areas but retains many of the features of the British model. Most major changes have occurred in the last 25 years. The apprenticeship model--a combination of paid employment, on-the-job and institutional training--has always had particular appeal for meeting intergenerational skills transfer: it provides employers with a source of low-cost labour, the apprentice with paid employment, and an opportunity for government to subsidise employment for those needing help to establish themselves in the labour market. Indeed, the community, employees, unions, employers and government have come to regard apprenticeships as the system for training in the trades and have tolerated few alterations to the system, beyond those resulting from shifts in the occupational and industry mix in the Australian economy and changes in secondary schooling arrangements. The first important reform to apprenticeships occurred in 1985 with the introduction of traineeships, which extended the model to a much wider range of occupations, generally at lower qualification levels. The second was in the mid-1990s when the Australian Government began paying incentives on a large scale to employers to help offset the costs of apprenticeships and traineeships and to encourage more commencements. This had a spectacular impact on traineeship numbers but much less effect on trades apprenticeships. Other significant changes were introduced in 1998; these allowed school students, existing workers and part-time workers to undertake apprenticeships and traineeships. In short, since 1985 the system has moved from one dominated by young males undertaking apprenticeships in the trades to one that provides apprenticeships and traineeships to people of all ages and both sexes, and in a much wider range of occupations. Key messages from this paper include: (1) The apprentice and trainee system needs to address some major issues. Much of the training is at low qualification levels with little or no economic return. And it can be argued that it is neglecting the general education needs of young people; (2) The system needs greater capacity to adapt and respond quickly to changing labour market demands. Australia might look to the experience of countries that use an institutional training model for trade training, which may be much easier to ramp up quickly; and (3) By any standards the cost of Australia's current system places a hefty burden on the public purse, estimated at $2.9 billion in 2008-09. Recorded occupation of a sample of skilled convicts transported to Australia, 1788-1868 is appended. (Contains 4 tables, 2 figures and 1 footnote.)

This paper focuses on issues which affect the capability of technical and further education (TAFE) providers to meet their clients' and stakeholders' needs and draws extensively on the reports of the consortium research program which examined ways to help build vocational education and training (VET) provider and workforce capability. The paper puts this research, most of which was completed in 2006 and 2007, into a contemporary framework. It suggests that TAFE providers need to be free of unnecessary central constraints to help them meet their strategic business needs. This includes more direct control of human resources matters and industrial relations. (Contains 8 footnotes.)

Economic downturns have a particularly strong impact upon new entrants to the labour market. These can include recently arrived migrants and refugees, women returning to the labour force after a period of child rearing, and youth. This paper reflects on the impact of the recent financial crisis on particular groups in Australian society and comments on whether the VET sector is well placed to meet the challenges of the recovery. An overview accompanies this paper. (Contains 7 tables, 1 figure, and 10 footnotes.)

By definition, youth transitions involve young people moving between school, post-school study and employment. It is a time of flux, as young people try out different school, post-school work and study options. But are those who don't find work immediately likely to make a poor transition? Given that many may well have a spell out of the labour force, everyone needs to understand when this becomes a risk factor. This briefing paper draws on related research and some primary data analysis to consider whether being "at risk" is a permanent or transitory state. It suggests that, rather than counting the numbers of young people who are detached from work, study or other meaningful activities, everyone should focus on those who remain disconnected. It is important to be able to identify who may be most "at risk" of an unsuccessful transition to ensure that targeted and appropriate interventions can be implemented. Young people who accumulate disadvantage through poor literacy and numeracy and who are uninterested in school appear particularly vulnerable. They tend to leave school early and suffer disproportionally in the labour market. If this detachment from work or study continues for an extended period of time, the young person's inability to develop employability skills and their lack of work experience adversely affect their prospects of future employment. This is detrimental not only to the individual but also to the nation's productivity. Therefore, programs which help young people to make smoother and faster transitions into further study or employment are important. (Contains 6 tables, 3 figures and 4 footnotes.)

Two features of the labour market for vocationally qualified workers are explored in this technical paper: the likelihood of self-employment versus wage employment and the determinants of income. The analysis showed that demographic, occupational and local labour market characteristics all influence the likelihood of self-employment. Self-employed people were more likely to be older, married and born in a non-English speaking country. High self-employment was found for managers, males in construction and female hospitality managers. Generally, employees were shown to earn more than self-employed workers, suggesting that the self-employed are willing to sacrifice monetary income for other perceived benefits of self-employment. (Contains 10 tables.)

This paper explores the issue of how vocational education and training (VET) is actually used in the labour market, in particular the match between what people study and the jobs they get. This match is pretty poor in most occupational groups with the exception of the trades. However, the paper concludes that the mismatch reflects the generic nature of VET rather than wastage. This view is reached because a relatively high percentage of graduates report their training is relevant even though they do not end up in their intended occupation. The study has three main implications. First, in thinking about the role of the VET system in addressing the needs of the labour market, it needs to be kept in mind that, with the exception of the trades, there is no neat match between courses and the occupations in which most people end up working. Second, those developing training packages need to be aware that many graduates will not work in their "intended" occupation. Finally, potential students need to be realistic about the likely occupation that a particular course will lead to. (Contains 14 tables and 1 figure.) [This work has been produced by the National Centre for Vocational Education Research (NCVER) as a joint initiative of the Australian Government and state and territory governments, with funding provided through the Australian Department of Education, Employment and Workplace Relations.]

This paper is concerned with the strategies being adopted for vocational education and training (VET) in Australia and the lessons that could be learned for them from policies in other countries. Six issues are considered in the paper, each relates to or more of the objectives and particular strategies in the Australia's National Strategy for Vocational Education and Training 2004-2010: (1) Workforce/adult training and retraining in the light of ageing and shifting occupational structures; (2) Equity issues for indigenous and other groups; (3) Managing demand and funding so that priorities are met; (4) Developments in qualification structures and quality assurance; (5) Enhancing provider capacity to ensure quality and responsiveness; and (6) Regional and community capacity building. The approach taken was to analyse national strategies, policies, objectives and priorities of government agencies to provide a point of comparison with Australia's National Strategy for VET. Analysis was most focused on the United Kingdom and New Zealand, and limited for Canada, due to the decentralised nature of that system. Implications for Australia are set out by strategy. (Contains 6 footnotes and 2 boxes.)

Despite wide publicity and common usage, the concept of skills shortage has different meaning to different people depending on their perspective. Understanding the different concepts of skills shortages, their measurement and the causes of skill shortages is important if sound policies are to be developed in the areas of employment, education, training and skill formation. This paper aims to contribute to an understanding of the issues. It provides a context for the study by considering recent reviews of skill needs and an overview of the meaning of skills with particular attention to generic skills as well as more vocational skills. Economic theory suggests that some skills imbalances are a feature of a competitive market. Without major hindrances to the market adjustment process, these imbalances resolve over time and may not require intervention. The main drivers of the changing skills requirements are demographic, organisational, social and technological. Adjustment usually takes time because of the speed at which the information about the changes in the market gets dissipated and the time it takes an individual to acquire new skills. However, real-world decentralised labour markets may not lead to optimal allocation of resources. Government action to correct the market may be justified if there is strong evidence showing sub-optimality. Before any effective policy is designed and implemented, it is important to understand the operation of the current market and to investigate reasons for its failure. Lack of good empirical knowledge of how markets adjust, and the time lag between an imbalance being observed and the impact of a policy makes effective intervention difficult in practice. (Contains 6 footnotes and 3 figures.)

Forecasts of Australian labor market growth, net replacement needs, and net job openings to 2006 are presented using the nine-way grouping of occupations described by (Maglen and Shah, 1999). Analysis is based on classifying occupations by whether they are advantaged by globalization and technological change, relatively insulated, or vulnerable. Globally advantaged occupations are grouped by whether they are, by nature, conceptual or technical. Insulated occupations are in-person professionals, skilled workers, and low-skill workers. Vulnerable occupations are advanced skill, white-collar clerical, blue-collar operative, and manual low-skill. Findings indicate, in the medium term, overall growth in employment is expected to be 1.2 percent per year, and net replacement is expected to be 2.1 percent; turnover will create most job openings for new entrants. More than four of five jobs due to growth in employment are projected to be in the globally advantaged or insulated occupations with projected average growth rates of about 1.7 percent per year; the average for vulnerable occupations is 0.5 percent. Because of job turnover, a substantial number of job openings will be for new entrants in vulnerable occupations, with the net replacement rate of 2.0 percent. Insulated occupations with above average growth in employment have a relatively high rate of turnover, especially among low skill groups. More than one in five of job openings for new entrants is expected in in-person low-skill insulated occupations. Appendixes include a list of 18 references and a paper on replacement demand and growth. (YLB)

Current research into youth transitions in Australia documents an increasingly individualized process in which significant numbers of youths are deemed at risk of not making a successful transition from school to work. Many theorists are questioning the applicability of the linear model of transition to current conditions. Other theorists are questioning whether the model was ever applicable to all students (especially "nonmainstream" students). The literature also documents the perceived failure of policy in ensuring successful transitions through recognized "pathways" of vocational learning and experience. It may be argued that, by broadening their focus to include the informal vocational experiences young people initiate and the type of learning that occurs in such instances, educational researchers may provide useful insights into how young people experience the transition process and how they seek to position themselves in the youth labor market. Research on this area is being conducted as part of the Research Centre for Vocational Education and Training's national key center program supported by the Australian National Training Authority. It is hoped that this research will shed new light on the increasingly complex transition process experienced by noncollege-bound young people and help policymakers devise more effective policies to assist this transition. (Contains 22 references.) (MN)

Increasing the mobility of service providers, including professionals, via mutual recognition (of regulatory systems) agreements (MRAs) has become a significant issue worldwide. Despite increasing interest in MRAs, it may be argued that MRAs are but one of a larger range of major developments that have fueled current interest in occupational competence descriptors and professional practice. Other important developments are as follows: rapid and accelerating change; public dissatisfaction with the professions; the limited understanding of the nature of professional practice; the emergence of a knowledge society; globalization leading to a corporate model of service provision; and moves to alternative and flexible modes of service delivery. The claim that mutual recognition is but one issue among these major developments may be illustrated by the examples of the following accreditation schemes: (1) the Law Society of New South Wales Specialist Accreditation Scheme; (2) the regulatory model recently developed in the United States by the National Council of State Boards of Nursing; (3) the competence-based assessment strategy developed by the Dietitians Association of Australia; and (4) various practices being used to assess competence in 17 Australian professions. These examples demonstrate that the role of professional competence standards in MRAs and in professionals' mobility is far from clear. (Contains 25 references.) (MN)

Ideas about what constitutes work, the ways work is organized, the tools used in work, and the relationship between work and the other components of life are all changing rapidly. The implications of these changes for vocational education and training (VET) in Australia and elsewhere were examined. The following issues were considered: (1) the loss of a clear direction or mission for VET; (2) increasing debate over focusing VET programs on meeting the individual needs of vocational education students or concentrating on developing an industry-driven system focused on employers' needs; (3) debate over whether VET should focus on particular jobs, careers, work in general, or life in general; (4) debate over the extent to which the VET curriculum should focus on specific vocational skills versus broad, underlying principles; and (5) debate over the relative emphasis placed on preemployement versus in-employment training, classroom-based and experience-based training, and course-centered versus individualized instruction. The following immediate challenges facing VET were identified: (1) making employer involvement in VET an economic imperative; (2) improving awareness of workplace realities among vocational teachers; (3) adapting cooperative programs to deal with multiple employers; and (4) building international alliances in VET. (Contains 24 references, 3 figures, and 1 table.) (MN)

Since the 1960s there has been a major expansion in the number of people in Australia holding post school educational credentials and the proportion of the full time work force with those credentials. The penalties of not holding credentials, in terms of the incidence and duration of unemployment, are increasingly severe. At the same time, there has been a long term decline in the income associated with degree and trade qualifications, relative to all incomes. One source of claims about declining educational standards is that the need for education is coinciding with declining returns from education. Within the long term trend there has been some fluctuation, with the 1980s showing increases in the incomes associated with academic degrees. However, this trend is thought to be only temporary because increases in numbers of graduates have been more rapid than the growth of total employment. The notion of credentialism and positional good explains that if educational demand and supply don't rise in tandem, and if the value of that education is not held high in the labor market, quality increases in education do little to influence the economic benefits of having higher education. Contains 18 references. (Author/GLR)

This paper presents a comprehensive analysis of the link between age and proficiency in information-processing skills, based on information drawn from the Survey of Adult Skills (PIAAC). The data reveal significant age-related differences in proficiencies, strongly suggesting that proficiency tends to "naturally" decline with age. Age differences in proficiency are, at first sight, substantial. On average across the OECD countries participating in PIAAC, adults aged 55 to 65 score some 30 points less than adults aged 25 to 34 on the PIAAC literacy scale, which is only slightly smaller than the score point difference between tertiary educated and less-than-upper-secondary educated individuals. However, despite their lower levels of proficiency, older individuals do not seem to suffer in terms of labour market outcomes. In particular, they generally earn higher wages, and much of the available empirical evidence suggests that they are not less productive than younger workers. Older and more experienced individuals seem therefore able to compensate the decline in information processing skills with the development of other skills, generally much more difficult to measure. On the other hand, proficiency in information-processing skills remain a strong determinant of important outcomes at all ages: this makes it important to better understand which factors are the most effective in preventing such age-related decline in proficiency, which does not occur to the same extent in all countries and for all individuals. Two broad interventions seem to be particularly promising in this respect. First, it is important to ensure that there is adequate and effective investment in skills development early in the life-cycle: as skills beget skills, starting off with a higher stock of human capital seems also to ensure smaller rates of proficiency decline. Second, it is equally important that policies are in place that provide incentives to individuals (and firms) to invest in skills across the entire working life. In this respect, changes in retirement policies can not only have the short-term effect of providing some reliefs to public finance, but have the potential to radically reshape incentives to stay active, to practice their skills and to invest more in training, thus helping to maintain high levels of proficiency. One table, Age Differences and Age Effects, is appended.

Using the 2012 PIAAC data, our analysis confirms that there are significantly higher earnings and employment returns to "both" increasing levels of formally recognised education, and to increasing levels of numeracy, literacy and information and communication technologies (ICT) skills proficiencies controlling for the level of education. Unsurprisingly, the labour market returns to changes in formally recognised levels of education in general exceed the labour market returns associated with increasing levels of skills proficiency. In the case of literacy and numeracy proficiencies, improved literacy and numeracy skills narrow the labour market outcomes gap between individuals with different levels of formally recognised education, but do not close it completely. The analysis demonstrates more substantial returns to ICT skills. Furthermore, possession of higher levels of ICT skills and lower levels of formally recognised qualification are often associated with higher returns compared to individuals with higher levels of formally recognised education but lower ICT proficiency levels. In other words, ICT skills proficiencies often entirely compensate for lower formally recognised qualifications in the labour market. Contains the following annexes: (1) Country Literacy and Numeracy Profiles; and (2) Demographic Control Variables.

This paper explores the impact of policies and institutions on employment and unemployment of OECD countries in the past decades. Reduced-form unemployment equations, consistent with standard wage setting/price-setting models, are estimated using cross-country/time-series data from 21 OECD countries over the period 1982-2003. In the "average" OECD country, high and long-lasting unemployment benefits, high tax wedges and stringent anticompetitive product market regulation are found to increase aggregate unemployment. By contrast, highly centralised and/or coordinated wage bargaining systems are estimated to reduce unemployment. These findings are robust across specifications, datasets and econometric methods. As policies and institutions affect employment not only via their impact on aggregate unemployment but also through their effects on labour market participation -- particularly for those groups "at the margin" of the labour market, group-specific employment rate equations are also estimated. In the "average" OECD country, high unemployment benefits and high tax wedges are found to be associated with lower employment prospects for all groups studied, namely prime-age males, females, older workers and youths. There is also evidence that group-specific policy determinants matter, such as targeted fiscal incentives. The paper also finds significant evidence of interactions across policies and institutions, as well as between institutions and macroeconomic conditions. Consistent with theory, structural reforms appear to have mutually reinforcing effects: the impact of a given policy reform is greater the more employment-friendly the overall policy and institutional framework. Certain more specific interactions across policies and institutions are found to be particularly robust, notably between unemployment benefits and public spending on active labour market programmes as well as between statutory minimum wages and the tax wedge. Finally, it is shown that macroeconomic conditions also matter for unemployment patterns, with their impact being shaped by policies. (A bibliography is included. Contains 144 footnotes, 9 figures, 3 boxes and 27 tables.)

This working paper assesses the ease of immigrants' integration in OECD labour markets by estimating how an immigration background influences the probability of being active or employed and the expected hourly earnings, for given individual characteristics. Applying the same methodology to comparable data across twelve OECD countries, immigrants are shown to significantly lag behind natives in terms of employment and/or wages. The differences narrow as years since settlement elapse, especially as regards wages, reflecting progressive assimilation. Strong differences in immigrant-to-native gaps are also observed across countries, and the paper shows that they may, to a significant extent, be explained by differences in labour market policies, in particular unemployment benefits, the tax wedge and the minimum wage. In addition, immigrants are shown to be overrepresented among outsiders in the labour market and, as such, highly sensitive to the difference in employment protection legislation between temporary and permanent contracts. (Contains 36 footnotes, 1 figure and 10 tables.)

Due to its close links to the labour market, technical and vocational education and training (TVET) can play an important role to improve job opportunities and livelihoods for young people, and in particular for disadvantaged youth. However, this potential is not always fully realized, and relatively little research and evidence has been collected about the barriers disadvantaged youth face when accessing to and progressing through TVET. This paper maps some of the main barriers disadvantaged youth face in TVET and examines available evidence on strategies and approaches that are being used or can be used to meet the needs of disadvantaged youth. The paper discusses these barriers using a framework that looks at '4As': availability, accessibility, acceptability, and adaptability. The report is the outcome of a study conducted in collaboration with the University of Nottingham and other members of the UNEVOC Network.