Why are immigrants less proficient in literacy than native-born adults?

by Theodora Xenogiani
Senior Policy Analyst, OECD Directorate for Employment, Labour and Social Affairs

Why is it that highly educated migrants to OECD countries are less likely to be employed than native-born adults who are similarly educated, even if they have lived in their host country for several years? The OECD’s Survey of Adult Skills (PIAAC) provides some answers. Based on results from the Survey of Adult Skills (PIAAC), a new Adult Skills in Focus shows that immigrants tend to have lower proficiency in the language of their new country than native-born residents. On average, the difference amounts to about 3.5 years of schooling and a difference is observed even when comparing immigrant and native adults with the same level of education.

Migrants in the various countries participating in the Survey of Adult Skills (PIAAC) differ in their reasons for migration, their country of origin, the time they have already spent in the host country, and the age at which they arrived. For instance, the literacy gap is much wider for immigrants in Sweden than for immigrants in other countries. This could reflect the fact that a large share of Sweden’s migrants came to the country for humanitarian reasons. It could also be because relatively few people outside of Sweden speak Swedish, so migrants are less likely to be already familiar with the language.

In contrast, the small differences in literacy proficiency between immigrants and natives in Australia and New Zealand could be explained by these countries’ selective immigration policies, leading to a large share of highly educated migrants with good knowledge of the English language.

Migrants’ language skills should be taken into account when interpreting their literacy proficiency. Two-thirds of the migrants assessed by the Survey of Adult Skills (PIAAC) were not taking the test in their native language. The literacy and numeracy proficiency measured in the survey thus does not just reflect migrants’ cognitive skills, but also – possibly to a large degree – their familiarity with and fluency in the test language. That means we have to distinguish between language skills and purely cognitive skills. For instance, we could take into account the country where migrants earned their qualifications, or the languages they speak at home or have learned in their lives.

A report by the OECD and the European Union shows that around one-third of the gap in literacy proficiency between immigrant and native-born adults can be explained by whether immigrants speak the host-country language at home or had learned it as a child. In Finland and Norway, countries with complex and less widely spoken languages, this factor can account for at least half of the gap in proficiency between migrants and natives.

The good news is that migrants’ literacy and numeracy skills improve with time, especially in countries where the gap is large and the language issue is important. In most countries, immigrants who arrived as young children and completed their education in their host country do just as well as their native-born peers.

If countries are to make the most of immigration and ensure the successful integration of migrants into their labour market and their society, they need the right policies to tackle these issues. However, the lack of detailed data up to now has made it hard to provide the analysis needed to create effective policies.

The Survey of Adult Skills (PIAAC) opens a new world of information to policy makers. Not only does it assess the skills of both migrants and natives, but it also includes detailed information about immigrants, their country of origin, their migration experience and their outcomes since arriving. It is possibly the first data source that allows us to draw a detailed picture of migrants’ skills and how those skills are used in the labour market. It provides a solid basis from which we can design policies to help migrants integrate more quickly and successfully into their new communities.


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Is more choice always a good thing?

by Andreas Schleicher
Director, OECD Directorate for Education and Skills

Many education systems around the world are looking for ways to give parents more choice over where they send their children to school. Proponents of school choice defend the rights of parents to send their children to their preferred school, whether because of the quality of the school, the school ethos or religious denomination. Expanding school choice, they argue, can stimulate competition and encourage schools to innovate.

But opponents argue that this type of market-based system tends to skim wealthier students from the state school system, resulting in a network of socially and culturally segregated schools. Critics also say that voucher systems divert public resources to private providers, leaving state schools with a disproportionate number of disadvantaged students and tighter budgets to support them.

What does OECD evidence show?

Across OECD countries, two out of three parents of 15-year-olds say they have some form of school choice. But what this means varies widely in practice.

For example, for families in rural, poorer areas, distance might be a big factor in determining the extent of choice. For other families, cost might be an important factor in how choice is exercised.

In both of these examples, where parents’ choice is limited by concerns about distance or cost, students are likely to be low performers, even after accounting for their socio-economic status.

School systems that use vouchers allow families to seek a place in either state or private schools. But there is an important distinction between schools that are publicly run and those that are publicly funded.

Across OECD countries, 84% of students attend publicly run state schools, 12% attend schools that are private but government-funded, and 4% are in independently funded private schools.

Private schools in Finland, the Netherlands and Sweden receive nearly all of their resources from the government, and they don't charge additional fees. In Hong Kong (China) and the Slovak Republic, more than 90% of funding for private schools comes from public coffers.

But in Greece, Mexico, the United Kingdom and the United States, less than 1% of funding for private schools comes from public sources.

This matters because in those countries where privately managed schools receive larger proportions of public funding, there is less social segregation in the school system as a whole.

But there are some complicating factors. Publicly funded private schools might charge additional fees – making them accessible only to wealthier families and thus undermining the principle of choice. So public funding, such as from vouchers, may fail to widen access to private schools unless rules on tuition fees are also in place.

In addition, if private schools invest public resources to improve their quality rather than to expand access, government subsidies can exacerbate inequities in education. This is one of the reasons why abolishing substantial add-on fees in a voucher system can reduce performance gaps between rich and poor students.

The way vouchers are targeted at students can have a big difference on their impact. Vouchers that are offered to all students (universal vouchers) can help expand the choice of schools available to parents and promote competition among schools. School vouchers that target only disadvantaged students (targeted vouchers) can help improve equity in access to schools.

For school systems where public and private schools receive similar shares of public funding, the performance gap related to students’ socio-economic status between pupils in state schools and those in private schools is twice as large in those systems that use universal vouchers compared with systems that use targeted vouchers. Regulating private school pricing and admissions criteria also helps limit social inequity when vouchers are used.

OECD evidence also shows that schools with selective admissions criteria tend to attract better-performing students of higher socio-economic status, regardless of the academic quality of the school. Given that better-performing students are less costly to educate and can make schools more attractive to parents, such selective intake can give schools a competitive advantage.

Thus, allowing private schools to select their students gives them an incentive to compete on the basis of exclusiveness, rather than on the basis of the extra value they can add. This can undermine the dynamics of competition and diminish the positive effects it may otherwise have on the quality of education provided.

The international evidence also points to selective admissions as a source of greater inequality and stratification among schools. The social sorting of students occurs not only because of admissions rules and tests, but also because of parental self-selection and more subtle barriers to entry.

Simply put, vouchers work well in some systems and badly in others. OECD evidence shows that the success of school vouchers in offering meaningful choice to parents and students depends on the regulatory framework in place. School choice should not be offered at the expense of equity in education opportunities.

Dollars and sense? Financial literacy among 15-year-olds

by Andreas Schleicher 
Director of the Directorate for Education and Skills, OECD
Pierre Poret
Director of the Directorate for Financial and Enterprise Affairs, OECD

Two in three 15-year-old students earn money from work activity, and more than one in two hold a bank account. And yet, among students in OECD countries who took the 2015 PISA test in financial literacy, fewer than one in three of them reached Level 4 on the assessment – the level that signals the kinds of knowledge and skills that are essential for managing a bank account or a financial task of similar complexity. And the demands on their financial skills rise as students get older: 79% of Australian students took out a public loan in 2013; in the Netherlands, students graduate with an average debt of USD18 000.

Being able to interpret financial documents and make financial decisions that take into account longer-term consequences, such as understanding the overall cost implications of a loan, are precisely the kinds of things that students are expected to do in the PISA test. More generally, the PISA assessment seeks to assess students’ knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make sound decisions across a range of financial contexts.

Among the countries with data for 2012 and 2015, only students in Italy and Russia made any headway in their performance in financial literacy. This is worrying because it’s an uphill struggle. Everywhere, people face more challenging financial choices. The spread of digital financial services opens up new opportunities for people once excluded from the financial system; but the digitised system also exposes consumers to new security threats and risks of fraud that are compounded when low financial literacy is combined with poor digital skills and ignorance of cyber security.

There are also greater financial risks. More individualised pensions, and more uncertain economic and job prospects due to digitalisation, technological change and globalisation are just some of these. Last but not least, growing inequality means that those with poor skills face particular risks. We don’t expect 15-year-olds to be able to meet all of these challenges. But we should expect them to be able to define their priorities and plan what to spend money on; to remember that some purchases have ongoing costs; to be aware that they can become the victims of fraud; and to know what risk is and what insurance is meant for. Again, that is exactly what the PISA assessment of financial literacy is all about.

Parents and families play an important role. PISA results show that when students discuss money matters with their parents, they have significantly higher financial literacy skills, even after accounting for differences in socio-economic background. Young people can also learn on their own by using appropriately regulated financial products in a context where young consumers are adequately protected.

The trouble is that all this seems to work just for students from more privileged backgrounds. Advantaged students score the equivalent of more than one PISA proficiency level higher in financial literacy than their disadvantaged peers. That’s equivalent to the difference between being able only to identify a delivery cost that is stated on an invoice and interpreting the various elements of the same invoice to correct a mistake in the billing.

This shows how important it is for schools and school systems to play a role in giving all children a fair chance to succeed. Some school systems already do this very well. Students in the four Chinese provinces and municipalities that took part in the test – Beijing, Jiangsu, Guandongand Shanghai – came out well ahead of their peers in every other country. Even more impressive, the socially and economically most disadvantaged quarter of students in these provinces did as well as the second wealthiest quarter of students in the United States, and better than the wealthiest quarter of students in Brazil, Chile and Peru.

That raises the question of whether a great school system will automatically help its students to acquire strong financial skills. The answer is not straightforward. On the one hand, having a solid foundation in mathematics and reading is crucial for navigating the financial landscape, from computing percentages to reading a bank statement. On the other hand, the PISA financial literacy assessment reveals that 38% of the variation in financial literacy is not explained by mathematics and reading skills. Many features of financial literacy are unique to the subject. These include being aware that some deals really are too good to be true, understanding the role of income tax, being vigilant for fraudulent e-mails, and knowing one's rights and responsibilities in the financial marketplace. It is also interesting to see that some countries do much better in financial literacy than they do in reading and mathematics. This is the case in the Flemish Community of Belgium, the Canadian provinces that took part in the test, in the four provinces in China and in Russia, where students do better in financial literacy than predicted by mathematics or reading.

Educators should not see this as a zero-sum game, where more financial education will take something away from the rigour, focus and coherence that is needed to give students strong foundations in mathematics or reading. Instead, they should look for complementarities, where financial education becomes a context that helps make learning in traditional school disciplines more relevant and interesting. We already find good examples of this in Australia, Belgium, Canada, Lithuania, Peru, the Slovak Republic and the United States.

Evidence that there is a positive relationship between performance in financial literacy and holding a bank account or receiving gifts of money, all other things being equal, suggests that some kind of experience with money or financial products can provide students with an opportunity to reinforce financial literacy, or that students who are more financially literate are more motivated to use financial products, and perhaps more confident in doing so. Young people can also learn through after-school initiatives. In some countries, governments and not-for-profits are offering young people videos, competitions, interactive tools and serious games via digital and/or traditional platforms.

But the more financial education initiatives are developed, both in and outside of school, the more important it is for governments and other stakeholders to evaluate and prioritise such initiatives and to scale and spread good practice. PISA tells countries how well they are succeeding; the OECD International Network on Financial Education will continue to build and share relevant international expertise and help countries provide the right combination of financial literacy and consumer protection.


PISA 2015 Results (Volume IV): Financial Literacy
PISA in Focus No. 72: What do 15-year-olds really know about money?
Programme for International Student Assessment (PISA)

Register for a public webinar on Wednesday, 24 May, 1:00pm Europe Summer Time (Paris, GMT +02:00) with Andreas Schleicher, Director of the OECD Education and Skills Directorate.

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Knowing and actively debating why, the heart of every policy

by Rien Rouw
Analyst, OECD Directorate for Education and Skills

What makes some of the largest companies in the world successful? According to consultant Simon Sinek in a very popular TedTalk it is because they start with the ‘why’. While many companies are good in telling what they do and how they do it, outstanding firms succeed in organising and communicating from their raison d’être. Because that is what the why is about: the reason for existence of organisations, their purposes, beliefs and aspirations. Communicating from the why goes something like this: “we want to support you to take control of your life (why), therefore all our devices are user friendly (how), such as this beautiful computer (what)”. The why is crucial Sinek argues, because it inspires and engages both employees and customers.

Does this simple concept only apply to the world of business, or would it also hold true for public services, more specifically for education? There is certainly evidence from several educational reforms we studied in the context of the Governing Complex Education Systems project, that engaging with the rationale and the underlying concepts, i.e. the why, made a difference in the uptake of the reforms by schools.

Our case studies showed the importance that school leadership and school culture promote sufficient focus on the why. In Flanders for example, while implementing revised system level attainment goals, some schools renewed their education accordingly, going through an intensive multiannual and collaborative professional development trajectory of training the trainers and peer coaching in new methods. More individually, school leaders encouraging teachers to take part in the developing of education goals at a system level proved to be beneficial for owning the rationale of the goals and putting them into practice in line with it.

In Norway, where school leaders promoted the why, this led to more successful implementation of the formative assessment programme in school that aimed at changing professional attitudes towards research and knowledge. The researchers noted the importance that school leaders “based their implementation strategies on a clear understanding of the programme goals and (…) could integrate these goals within the broader aims of educational policy and school practice”.

In contrast, our case studies showed that not engaging with the rationale could lead to the partial uptake of a reform by school leaders and teachers, to a superficial realisation of new concepts or even to the opposite implementation of a new scheme. For example, researchers in Norway also noted that various schools tended to implement the formative assessment programme as if they were following a recipe – with many teachers unquestioningly applying the tools provided by the Ministry in their classrooms – instead of taking professional ownership of the concept. In Poland, while the introduction of a new supervision and school inspection regime in 2009 was meant to promote a collaborative culture, in some localities it led to distrust and local power games.

If embedding the why in local practices is so important, what can governments do to strengthen this? The first avenue is professional development both of school leaders and teachers. Professional development activities should be designed as truly two-way processes, with participants actively engaging with the why and confronting it with their own motivations and aspirations and relating the why to the specific knowledge and concrete tools that are being provided.

It is even more important for a government to recognise that the why is a crucial motivating force that needs to be kept vital throughout the policy process through an open and ongoing dialogue. This is not as obvious as it seems. Quite often the purposes behind a policy initiative drop off the radar as soon as it reaches the phase of policy design and implementation. At that stage, negotiations on responsibilities, tasks, funding and accountability are dominant. Up the policy road evaluations tend to be rather instrumental in many cases, focusing on goals, processes and mechanisms and leaving the underlying purposes out. However, to be vital the why needs to be dynamic, i.e. open for negotiation and adaptation along the way. To be motivating for all stakeholders the why needs to be multidimensional. It must be written in a language that speaks to teachers and school leaders and relates to their aspirations.

‘Start with why’, the phrase coined by Sinek, is easily misinterpreted. As if starting means only beginning and then leaving it behind. On the contrary, ‘starting’ means putting the why in the heart of every policy and keeping it alive across all stages of the policy life cycle.

Strategic Education Governance project
The Centre for Educational Research and Innovation (CERI)

Who benefits when international students pay higher tuition fees?

by Dirk Van Damme
Head of the Innovation and Measuring Progress Division, Directorate for Education and Skills 

In 2014, over 3 million students in OECD countries – more than double the amount in 2000 – were studying outside their country of citizenship. International students go to study in countries with reputations for academic excellence; but they are frequently also seen as seeking economic and social opportunities in the host country.

As many countries seek to restrict immigration, international students are becoming a targeted population. One of the policies that aim to reduce the number of incoming international students is charging higher tuition fees for international students compared to national students (“national” meaning outside the European Economic Area [EEA] in the case of European countries). Countries also hold the view that national resources and taxpayers’ money should not be spent to subsidise international students, so they increasingly aim to charge the full tuition cost to international students. Some of the countries that have put themselves firmly in the market for international students in recent years also see fee-paying international students as an important source of revenue for their higher education sector.

The current Education Indicators in Focus brief, based on the most recent data on international student mobility and tuition fees published in Education at a Glance 2016, looks into the reforms differentiating tuition fees between national and international students. The majority of OECD countries still do not differentiate fees between the two categories, but a growing number of countries do. As the chart above shows, in some countries the differences are significant. In Australia, Austria, Canada, New Zealand and the United States, foreign students pay double or more the tuition fees charged to national students, on average, while Sweden and Denmark charge no fees to national students but ask international students to pay more or less the full cost of tuition.

It is well known that exporting education services has become an important economic activity in some countries, including Australia, New Zealand, the United Kingdom and the United States. Fee-paying international students generate a considerable revenue stream to higher education institutions; they also consume other goods and services and thus contribute to the host country’s economy. But to what extent do universities in these countries benefit from this source of income? There are no data available to make reliable estimates for a large group of countries; but for Australia and New Zealand, countries that vigorously market their higher education services, the income from fee-paying international students equals over one-quarter of the total expenditure on higher education. By contrast, in the United States, income from these students represents only 2.4% of total expenditure on higher education; in Canada, it represents only 8.2%. But it is interesting to see that in Denmark – a country that traditionally considers free higher education to be a right, but introduced tuition fees for non-EEA students in 2005 – the income generated by international students now equals 13.3% of total expenditure on higher education.

Universities are genuinely concerned about their place in the global scientific research and education system. They thus see the internationalisation of their institutions as part of a wider strategy. But at the same time, it is clear that in several countries fee-paying students generate welcome additional revenue at a time when public funding is insufficient to cover costs. As is evident from the political debate in several countries, this creates tensions between universities’ policies to defend their commercial interests on the one hand and governments’ restrictive immigration policies on the other.

These developments fundamentally alter the position and perception of international students. From being a desirable addition to the student population, a source of global relevance and diversity, they are now regarded as either cash-cows or scroungers of national resources, taking away benefits and opportunities from locals. It remains to be seen how these students will react to these developments. The current Education Indicators in Focus brief provides some evidence, based on observations in Denmark, New Zealand and Sweden, that introducing fees for international students did result in a drop in their numbers in subsequent years. International students are looking for the best education at a reasonable cost, balancing perceived academic excellence and reputation against cost and hospitality.

As long as higher education systems in emerging economies are not able to match growing demand with sufficient high-quality local supply, students will continue to cross borders to seek education opportunities. For destination countries with excellent higher education systems, international students offer a lot of benefits – but only if they are regarded as welcome additions to the student population, and not as cash cows or opportunistic free-riders.

Education Indicators in Focus No. 51: Tuition fees reforms and international mobility
Education at a Glance 2016: OECD Indicators
Podcast: International Tuition Fee Policies: An Interview with Gabriele Marconi
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Chart source: OECD (2016), Education at a Glance Database, http://stats.oecd.org/.