Initial vocational education and training in Russia – new challenges

1. Initial vocational education and training in Russia – new challenges Nina Vishnevskaya 32nd Annual Conference of IWPLMS, 11-13 July 2011

2. Motivationand objectives • After the start of economic reforms the system of vocational training, formed in the USSR, collapsed. • The objective of this paper is to analyze characteristic features of the comprehensive system of initial vocational education and training (IVET) in Russia and to evaluate its advantages and disadvantages. • The main question – does Russian IVET corresponds tothe needs of the market economy?

3. Data • The Russian Longitudinal Monitoring Survey. • RLMS is the only representative panel household survey in Russia, • The RLMS was first launched in 1994 and is conducted • annually (except 1997 and 1999). • Its core questionnaires (for individuals, households, • and community-related data) include • questions on educational characteristics of individuals • Survey “Monitoring of Education” conducted by Higher School of Economics and the Ministry of Education of RF • Russian Agency on Statistics

4. IVET in the socialisteconomy • IVET was one of the educational streams with close involvement of the state and social partners. • Large enterprises actively participated in the organization of training places. • Professional education was combined with workplace training, providing firm-specific skills. • Education at all levels was free. • The problem of graduates employment actually did not exist.Highproportion of industrial production coupled with low productivity required a constant inflow of labour. • The State restricted artificially access to tertiary education, and that also supported the demand for training places in vocational education. • The main difference from German dual system was the possibility of upward educational mobility.

5. With the start of the economic reform • a considerable part of human capital inherited from socialist era, has undergone partial or complete erosion; • a severe shortage of some categories of labour was accompanied by an excess of others; • many workers had to change not just a job, but the profession and employment sector; • during 1991-1998, over 40% of Russian workers switched the job-place, This process was described as “a great reallocation of human capital” (Sabirianova, 2001). • Formal education system was ill-prepared to function in a market environment and entered a period of protracted organizational and financial crisis.

6. Institutional characteristics of comprehensive IVET system in Russia (1) • Academic schools and IVET system function separately. • There are three types of IVET institutions. • 1. Professional training is combined with • academic education (78%); • 2. Professional education and training is not combined • with academic education (10%); • 3. Professional education and training after receiving • upper secondary general education (12%) • Most participants of IVET enter professional schools after graduating from lower secondary school.

7. Institutional characteristics of comprehensive IVET system in Russia (2) • The regional governments became the major sponsors of IVET system. Their share in financing professional establishments exceeds 80 per cent. • Only 0,8% of all professional schools belong to private companies. • The curricula is approved by the Ministry of education • The education normally lasts three years • Very important feature of Russian IVET system - there is no obstacles for entering the higher levels of education, including university.

8. The IVET system turned out in a deep and protracted crisis • From the supply side. Enterprises declined to participate in IVET. This means that participants of IVET stopped receive on-the job-training. • The quality of education in IVET establishments deteriorated significantly. • From the demand side. The share of youth cohorts enter professional programmes substantively decreased. Young people increased sharply the demand for tertiary education.

9. Structure of expenditures on different levels of education

10. The role of enterprises in IVET system • According to Monitoring of Education, 37-46% of enterprises experienced shortage of skilled workers (2007). Even in the crisis 2009 33% of enterprises considered shortage of workers as the main obstacle to expansion of production • 23% of enterprises do not hire IVET graduates, of those who hires 45% are not satisfied with the quality of education (Monitoring of education, 2009). Why firms do not train? Some of the enterprises declined to fund and organize training places because of difficult financial position • Very high turnover rate – -60%, in 2009 – fell to 50% • Compulsory military service – halve of IVET graduates enter military service Many companies which are willing to allocate financial resources for this purpose, face the “poaching problem”. • As the result, the share of enterprises participating in IVET significantly decreased.

11. Why Russian enterprises can’t solve the “poaching problem”? • The characteristic feature of Russian bargaining system is the absence of effective mechanism of economy-wide and inter-industry coordination. • The absence of an effective mechanism of inter-industry coordination leads to large differentiation in wages between different branches. • Specific wage-setting mechanism, strong dependence of wages on firm’s performance , low share of tariff in the total wage leads to high differentiation in earnings between workers with similar characteristics. • Employers’ organizations don’t have enough negotiating power. Only 40 per cent of LM enterprises are members of employers’ organizations. Participation in association is often a formality.

12. Relative wages by industries, 2009, %

13. What industries establish training centers for skilled workers? • Industries in which wages are much higher than the average.These are primarily the extractive branches: oil and gas, iron and steel, ferrous metals. • Training of young workers can afford industries, which can easily shift increased costs on consumers. This applies, for example, to retail companies. • The major role of state professional schools became to provide social support to disadvantaged youth

14. Quality of training • The crisis of IVET stems from several reasons, one of the most important – the worsening quality of education. • The measurement of quality of education is a complex task. The concept of “quality” covers various aspects – from motivation to training, from discipline to innovation. • Evaluating the integral quality different people may attach different weights to different components, and generally keep in mind not the same thing [Green, Machin, Wilkinson 1998]. • We have to operate indirect indicators

15. Assessment of professional knowledge and experience received during the education, 2009, %

16. The use of knowledge and experience received during training, by educational attainment, 2009, %

17. Post-diploma mobility of IVET students

18. Tertiary and IVET students as % of school graduates, 1990, 2009, %

19. Dynamics of number of students at different educational establishments

20. Accumulated years of education, Russian total and employed population, 1995-2009 RLMS

21. Accumulated years of education, selected countries, 2000(Barro and Lee, 2001, Worldbank)

22. Share of population with Type A+B tertiary education and GDP per capita in selected countries, 2008

23. Share of population with Type A tertiary education and GDP per capita in selected countries, 2008

24. The average number of accumulated years of education • The dynamics of the average number of accumulated years of education showed a steady upward trend. Since the mid-1990s, it increased by more than one year. • How Russian human capital looks in light of international comparisons? • The educational level of its population was much higher than in other countries, belongs to the same economic group. If we look at the average number of years of schooling, Russia is ahead not only of other transition and BRIC countries, but also ahead of the most developed countries. • For the population aged 25 and over the average number of accumulated years of education Russia outstripped Germany by 0.7 years, Japan – by 0.8 years, the UK – by 1.1 years, France – by 2.1 years.

25. Educationalattainment of the Russian adult population • Even more striking that in a country with such a relatively low level of per capita GDP as Russia over half the population - 57% - had a tertiary education. This was 13 percentage points higher than in Canada, and several times higher than in other post-socialist countries where this indicator did not exceed 15% • This is largely unexpected "primacy" of Russia provides ultra-high proportion of persons with type B tertiary education of type B. However, the share of persons with tertiary type A education Russia belongs to a group of world leaders. Thus, among the countries of the OECD sample, with the result of 21% she shared a ninth-tenth place with Japan. Countries with such a paradoxical combination of indicators of GDP per capita and coverage of tertiary education worldwide practice hardly knows. We can assume that the educational potential of Russia creates enough opportunities for the development of the formation of an economy based on knowledge.

26. Educational attainment, adult population (25-64), 2005

27. How companies address the skilled workers’ shortage? • Migration. The stock of migrant workers increased from 0,3% in 2003 to 3,1% in 2010. Competitin with Russian workers • Hiring of workers with higher qualifications ( 49% of people with Type B education and 15% with type A tertiary education work as skilled- and semiskilled workers) • Retraining of companies personnel. Halve of enterprises organized retraining for their workers, but educational coverage (5%) and training period was very short (3 weeks).

28. Conclusions • Russian IVET system is in full collapse • The goverment, employers and their organisations do very little to improve the situation • It is clear that the German dual system of IVET has no future in Russia • The future of initial professional education and training in Russia???