News analysis

Brush up or lose out: Message for older adults

Local adults aged 45 to 65 ranked 18th in problem-solving among OECD peers

The latest findings by the Organisation for Economic Cooperation and Development (OECD) on the skills gap between young adults and older workers in Singapore are not surprising.

The results of the Programme for the International Assessment of Adult Competencies, released yesterday, show that young adults in Singapore aged 16 to 34 had a high level of numeracy, literacy and problem-solving skills.

Compared with their peers from other economies, this Singapore age group ranked second in problem-solving, fifth in numeracy and ninth in literacy.

It was a different story for older adults in the 45-65 age group. Compared with their OECD peers, they were ranked 31st in literacy and numeracy skills and 18th for problem-solving.

The skills assessed in the study are seen to be necessary for adults to actively participate in the labour market, education and civic life. In Singapore, about 5,400 adults - comprising citizens and permanent residents aged between 16 and 65 - participated in the study which covered 34 economies.

The study also found that 74 per cent of those in the 25-34 age group had tertiary qualifications - a polytechnic diploma, if not a degree. In contrast, only 31 per cent of those in the 45-65 age group had tertiary qualifications.

The differences reflect the improvements made in our education and training system over the past five decades. This enabled subsequent generations of younger adults to climb up the education ladder and acquire higher-level skills.

As OECD's education chief Andreas Schleicher said, it is important for the government and employers to look at how lifelong learning can be promoted so that workers, even as they get older, can remain employable.

The distribution of skills has significant implications for how the benefits of economic growth are shared.

These are accentuated in Singapore, which exhibited a powerful correlation between literacy and numeracy skills and wages, ranking third for wage returns to literacy skills.

In Singapore, an increase of approximately 48 points in literacy proficiency score is associated with a 12 per cent increase in hourly wages, which is almost double that of the average among OECD economies covered in the study.

This lends a whole new urgency for older workers to upgrade their skills. Otherwise, they may find the wage gap between themselves and their younger colleagues widening.

Rewarding skills appropriately also has implications for a nation's progress. East Asian nations have not always been known to do this, Dr Schleicher had pointed out last year. He compared the United States and Japan to make his point.

American adults were ranked around the middle in literacy and near the bottom in skills with numbers and technology, but the study found that the American economy was exceptionally good at extracting value from workers.

American companies recognise workers' skills, know how to use them and are willing to pay them a premium for their skills.

The reverse is true for Japan, where rigid labour market arrangements prevent many skilled individuals, notably women, from going into jobs where their skills can be well used.

This close match between skills and wages is something that Singapore should strive to retain. After all, skills are only valuable when they are used effectively and productivity gains can be achieved by engaging workers more fully.

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A version of this article appeared in the print edition of The Straits Times on June 29, 2016, with the headline Brush up or lose out: Message for older adults. Subscribe