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Brink, KSA, 2015 1
Investing in education for future prosperity of the Kingdom of
Saudi Arabia
Education Evaluation in the Kingdom: A Prelude to Education Quality and Development
RiyadhNovember 3-5, 2014
Satya Brink
Brink, KSA, 2015 2
Investment in education is a major expenditure of government budgets, particularly in Saudi Arabia
Source: Ministry of Finance of respective countries, Alpen capital, 2014
Estimated Government spending on education as a percentage of total government expenditure, 2014
Brink, KSA, 2015 3
Why is basic education compulsory in most countries?• Few government requirements are compulsory – voting, military service,
payment of taxes in some countries but compulsory education for children is almost universal
• Education is provided as a right in order to ensure that all children start out with a level playing field
• Basic education ensures life opportunities for future generations of the country
• Education builds human capital for the labour market• Education fuels economic growth of the country now and in the future• Education is important for nation building and social development.
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How does education support the GDP of a country?
Contributes to economic activity• Working in the labour market during adult life• Non-labour market activities with economic value
• Volunteer work• Raising children
• Informed consumption• Savings• Investments
Saves public expenditures• Cost saving positive actions such as health behaviours (nutrition, not smoking, etc)• Living independently without relying on government programs (Income support, housing assistance, etc)• Not participating in crime and other activities that require public expenditures
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Education is a vital driver of the labour market and economic growth
Education Economy
Prepare all students , boys and girls, with work related skills though fluctuation in number of children in schools
Sufficient workforce to meet demand of a growing economy and avoiding skill shortages
Literacy and learning to learn for lifelong learning to gain transferable skills
Prepare for labour growth followed by shortage due to demography with little underemployment and only frictional unemployment
Problem solving, creative, entrepreneurial graduates
Innovation for competitiveness through new products and processes to compete with high quality for the price
Quality of education and excellence in results Pool of workers with human capital that can work smarter for productivity in a diversified economy
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Primary and Secondary School Tertiary Education
Year2013 2016 2019 2013 2016 2019
Number 6,391,644 6,811,095 7,250,894 1,258,288 1,452,285 1,663,953
Ratio %104.2 104.5 104.8 52 56.5 67
Gross enrolment and ratio Primary and Secondary school, compared to Tertiary Education, 2013 to 2019, Saudi Arabia
Sufficient workforce to meet demand of a growing economy and avoiding skill shortages
Prepare all students , boys and girls, with work related skills though fluctuation in number of children in schools
Source: Alpen capital, 2014
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2010 2015 2020 2025 2030 2035 2040 2045 20500
10
20
30
40
50
60
70
80
Population by age group 2010 projected to 2050, Saudi Arabia
Population by age group, % 0 to 4 Population by age group, % 5 to 14
Population by age group, % 15 to 64 Population by age group, % 65+Source: United Nations, World Population Prospects
Prepare for labour growth followed by shortage due to demography with little underemployment and only frictional unemployment
Literacy and learning to learn for lifelong learning to gain transferable skills
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Improvements in education result in higher skills in each new generation thereby improving the human capital in the labour force
Source: OECD, PIAAC
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Source: Levy and Murnane, 2013
Innovation for competitiveness through new products and processes to compete with high quality for the price
Problem solving, creative, entrepreneurial graduates
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The demand for higher level skills are growing rapidly compared to low level skills in reading
• Reading and numeracy are foundational skills learned at school.
• If adults have to be retrained in reading and numeracy, a country is paying twice for the development of the skill.
Source: OECD, PIAAC
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Source: Sanders & Rivers Cumulative and Residual Effects on Future Student Academic Achievement, McKinsey; In Barber & Mourshed (2007), The Effect of Teacher Quality
Pool of workers with human capital that can work smarter for productivity in a diversified economy
Quality of education and excellence in results
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Each country should improve the quality of its own education system but its citizens should be capable of living and working in a
globalized world• There is evidence to show that it is not necessary to follow the same
path as countries that are leaders in education, but a country can forge its own path to the top.
• A system can make significant gains from whatever level it starts from, and these gains can be achieved in 6 years or less (McKinsey, 2010)
• A growth scenario of OECD countries based on increasing the PISA performance by 25 points over the next 20 years would increase the GDP of these OECD countries by US$115 trillion in present value terms.
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Long term macro impacts of a good system of education on the economy• Opportunities for participation in the workforce • Personal returns of education during working life is an incentive• Develop diversity of talent and expertise for a diversified economy• Equality promotes both educational performance and the economy
Saudi Arabia has set some goals for the growth of its economy• Increase in the employment rate from 41%• Ability of the economy to absorb 400,000 youth annually in the labour
market• Reduction of skill shortages in specific economic sectors• Decrease skill mismatches
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High quality compulsory education ensures success in further education and in the labour market
• Economic growth requires high value products and processes which requires a more educated workforce
• Unless students are well prepared during compulsory education they will not thrive in higher education
• The kind of things that are easy to teach are easy to automate or outsource
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Earning potential: Returns of education rise during the peak working years (35-45) encouraging work in the labour market and the economy
Source: Georgetown University’s Center on Education and the Workforce
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Source: Georgetown University’s Center on Education and the Workforce
Lifetime earnings are related to education with a large difference between those who have a diploma and those who don’t in the USA and most other countries
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Distribution of the employed population by major occupations, men and women aged 15 and over, Canada, 2011
A diversity of talent and experience is required to meet the needs of the labor market and to avoid skill mismatches and skill shortages
Statistics Canada, National Household Survey, 2011
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When equality is high, economic growth is also high, fostered by educational performance
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When there is high inequality the rate of growth of the economy is impacted negatively
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Gender equitySaudi unemployment by education and gender 2012. 000s
Lack of gender equity in employment results in unused human capital or cognitive surplus
• Unused human capital reduces the returns to education in the GDP.
• Both public and private returns to investments in higher education unrealized.
• More women than men graduate from higher education in Saudi Arabia.
• High unemployment in general and among women in particular.
• Many educated women are not in the labour force.
• Women tend to study traditional fields such as teaching.
• Skills mismatch high between graduates and market demands.
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Saudi Arabia has launched extensive education reforms
• Saudi Arabia “ aspires to achieve a knowledge-based society through the adoption of a distinct quality education.”
• In May 2014, King Abdulla approved funding of SAR 80 billion for a five year plan for the reform of the education sector
• The progress of the reforms and the results achieved in school improvement and student performance will be monitored by the Public Education Evaluation Council
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What can you expect in the economy from reforms? Long term impact of educational reform in 2010 on economic growth over the life time of students
born in 2010
OECD, 2010. The high cost of low performance
