Better education attainment levels needed to improve economy

Significant improvements are required in education attainment levels for the Maltese economy in order to close the gap with the EU average in this area, according to the government's Pre-Budget Document 2010.

Statistics show that early school leavers in Malta account for a larger share of the population aged between 18 and 24 than in other EU countries. This section of the population refers to people with only lower secondary education and these amounted to 37.3 per cent in Malta compared to 15.2 per cent for the EU-27.

Furthermore, the percentage of the population aged between 20 and 24 who have completed upper secondary education in Malta stood at 54.2 per cent compared to the EU-27 average of 78.5 per cent.

However, during the period 2000-2008 Malta made substantial progress, improving both the youth education attainment level and the early school leavers' level. The former grew by 13 per cent and the latter declined by almost 17 per cent.

On the graduate level, vocational training and life-long learning, the figures are more encouraging for Malta. The country's percentage of graduates aged between 20 and 29 stands at 36.2 per cent, comparing well with a number of EU member states. Between 2000 and 2007 the number of Maltese graduates grew by an annual average of 6.3 per cent, ranking among the top five improvements by EU member states. In addition, Malta also recorded a substantial improvement in the number of graduates in maths, science and technology, considered to be vital to the development of a knowledge-based economy.

On the link between education and employment, the document points out that persons with a high level of education are more likely to be employed compared to persons with a lower level of education. Figures show that 86 per cent of persons with a high level of education are in employment while only one per cent are unemployed.

This contrasts heavily with only 51 per cent of persons with a lower level of education being in employment and four per cent being unemployed. Furthermore, the divergence in employment rates between persons with a high level of education and those with a lower level of education tends to be more pronounced for females than for males.

"Consequently, it may be argued that further investment in females education can provide an important contribution towards achieving higher female employment rates," the document states.

Statistics also show that those sectors that have experienced the highest average annual growth rates between 2000 and 2008 are those with the highest proportions of relatively highly educated workers, such as education, real estate and business activities and health. The financial services sector, which has a highly educated workforce, expanded considerably after 2004, mainly due to Malta's EU accession.

The document also points out that persons with a high level of education earn as much as 50 per cent more than persons with a low level of education in the early stages of their career.

The report says the government's policy is to continue investing in education to increase the supply of highly educated workers "while at the same time seek to attract high-value added foreign direct investment that demands the skills of highly-educated workers".

It said such economic developments would in turn contribute to accelerate the process of convergence to EU income levels.