Education credentials (skills, knowledge and competence formalised through validation or recognised qualifications) are the key for unlocking opportunities in the labour market. Without these credentials, participation in the labour market restricts opportunities.

For low-paid jobs requiring fewer credentials, opportunities and rewards are limited with many vacancies for low-paid jobs currently being filled by non-Maltese. As expected, the scarcer the credentials, the greater are the expected rewards since this opens opportunities for more exclusive jobs and networks.

The growing importance attached to educational credentials symbolises a tightening bond between education, jobs and rewards. We are told that ‘the more we learn, the more we earn’, as better credentials are believed to lead to better jobs and higher rewards, at the same time offering an efficient and fair means of selection based on individual achievement.

Credentials can be seen as the currency of opportunity. With more credentials (especially among young adults from a middle-class background), the level of competition for better paid jobs has increased.

Expectations of middle-class lifestyles and careers have risen within Maltese society and with more women entering the competition for managerial and professional work. These expectations have been fuelled by increasing access to higher education (though we still lag behind other EU countries). And we now have more people entering the labour markets competing for better paid jobs.

The costs incurred in realising ‘opportunities’ are increasing because success depends on getting ahead in the competition for sought-after programmes at the University of Malta or Mcast, and jobs. Middle-class families are adopting more desperate measures such as increased spending on private tuition to win a positional advantage. If all families were to adopt the same tactics, nobody would get ahead. But if one does not play the game, there is little chance of winning. And let’s face it, few can afford to opt out of the competition for a livelihood.

For most low-income families, however, the situation is completely different. Very few young adults from low-income families aspire for highly-paid jobs given that the achievement of education credentials is more difficult. Though this needs to be substantiated by conclusive evidence linking young adults’ income/social background to employment, people are today more dependent on the job market for their economic welfare. The gap between winners and losers in the labour market has grown over the years, and those with fewer credentials are less likely to be among the winners.

For several years we have seen an increased demand for technical, managerial and professional workers leading to a more intensive struggle for competitive advantage in education and the labour market. Yet, skill levels across the Maltese population have not kept up with the pace of change dictated by market developments and technological change.

Yes, the supply side of the labour market has responded at times impressively to new investment opportunities in sectors such as aircraft maintenance and i-gaming. However, the number of early school leavers (people aged 18-24 who have only lower secondary education or less and are no longer in education or training) remains high.

With government focusing more on the supply side, the demand side is becoming increasingly beyond its control. Yet, the direction set by government, especially in (a) determining the skills necessary for a competitive marketplace and (b) providing the institutional set-up and resources (unless provided by private sector institutions) in higher and vocational education is crucial to address skills mismatches and the problem of young adults with low skills.

The question we need to ask is whether we have sufficient information about the labour market (and of future developments) and how to translate that information into an effective plan of action. Addressing supply side challenges, in particular through skill-enhancing reform, is one of the priorities of government but it would be unreasonable to expect positive economic benefits in the short term. This is more likely in the long term.

The EU Commission recently attempted to predict the outcome of reforms in labour market participation and the degree of competition in the economy (using the Quest model). Improvements in skills enhancement and competition could raise Malta’s GDP by about 4.6 per cent over a 10-year period. Though this may seem ambitious, it does prove that addressing the low skills base among categories within the Maltese population is critical if we are to aspire for further social and economic progress.

Philip von Brockdorff is the head of the Economics Faculty at the University of Malta.