Tharman urges more focus on vocational education, says countries taking 'college premium' too seriously

Senior Minister Tharman Shanmugaratnam was speaking at a conference on reducing inequality in advanced economies organised by the Peterson Institute for International Economics in Washington, DC.
Senior Minister Tharman Shanmugaratnam was speaking at a conference on reducing inequality in advanced economies organised by the Peterson Institute for International Economics in Washington, DC.PHOTO: MINISTRY OF COMMUNICATIONS AND INFORMATION

WASHINGTON - Countries have taken too seriously the expected boost in pay that college graduates get over their non-college educated peers, despite the bottom quarter of graduates not earning this "college premium" in reality, said Singapore Senior Minister Tharman Shanmugaratnam at an economics conference on Thursday (Oct 17).

This focus on pushing high school graduates into universities has also led to a massive mismatch between people's abilities and the needs of the marketplace, said Mr Tharman, who called for a greater focus on vocational education in advanced economies.

He was speaking at a conference on reducing inequality in advanced economies organised by the Peterson Institute for International Economics in Washington, DC, where he will be attending annual meetings of the World Bank and the International Monetary Fund until Sunday.

"We've been taking too seriously the college premium," said Mr Tharman at a panel discussion on education, noting that the college premium was actually an average, not a standard amount that all graduates could expect.

"It's always been the case, going back to the 1970s, that the bottom 25 per cent (of college grads) has hardly any premium over a high school grad. By pushing someone who's a high school grad into college, you don't get him or her to earn a college premium that's based on the average. It's always a marginal issue," said Mr Tharman, who is also Coordinating Minister for Social Policies and was Education Minister from 2003 to 2008.

In the United States, 40 per cent of people who enrol in universities do not even complete within six years, he said. A substantial proportion of those who graduate end up in jobs that do not require a college degree, he added, calling the phenomenon a "massive mismatch of abilities and the needs of the marketplace".

"The question is not should you be a high school grad or should you be a college grad and hope to earn the average college premium. The question is, what form of post high school education will give you a premium?" said Mr Tharman.

Addressing this requires a greater focus on vocational education, which is another way to develop soft skills such as creativity, teamwork and cross-cultural skills in people, said Mr Tharman.

"The writing is on the wall. We have trundled into an overwhelmingly academically oriented college education and we need a rebalancing," he said.


The senior minister recounted how he had observed young people in overseas labs and training workshops, for instance, learning to adapt to something never seen before.

"It's different from reading a new novel. It develops a different set of instincts and skills," he said. "Yes, we've got to develop people so they can keep adapting to change throughout their lives. Doing it through an applied education is not necessarily inferior to the typical liberal arts model."

Market intermediaries can also change hiring practices to focus more on applicants' skills and not pedigree, he said.

He gave the example of Silicon Valley start-up GapJumpers, which has developed a system of blind auditions that lets companies upload skills challenges online and call the top scorers for interviews, all without knowing their social or educational background.

"We've got to think of all these new forms of intermediaries, first to reduce the social biases of hiring marketplace and secondly match skills supply and demand better than we're doing today," he said.

In his remarks, Mr Tharman also strongly championed public school systems of the sort found in Singapore and Finland, over the decentralised education systems of the US and elsewhere.

The US, for instance, leaves aspects of funding, curriculum and teacher training to states and school districts, instead of having them all set by the national government.

Much of what ails decentralised education systems is that too much has been left to the social and economic marketplace, which practices social engineering, said Mr Tharman.

This starts with the increasing trend of people marrying others of similar educational background, he said.

The best-educated and better-off parents also invest more into their children's education and enrichment compared to median and lower-income parents, a trend sharply on the rise in the last 20 to 30 years.

Schools are also shaped by the neighbourhoods they are in, which are becoming increasingly different, he said, adding that these situations can be seen in the US and Britain, for instance.

Said Mr Tharman: "We're not any longer sure that meritocratic education systems are going to be able to blunt the advantages or disadvantages that kids bring with them from the home and from their social backgrounds in the same way they did at some point in the past in many countries."

Technological change has also prompted serious concerns everywhere in the world about whether current education systems can prepare a broad spectrum of young people well for a new era of jobs and work, he said.

"If we continue to see a stubborn polarisation of educational achievement based on social backgrounds... and we now see bifurcation of wage and job outcomes as a result of this new technological era, that combination is toxic," said Mr Tharman.

"It will undermine trust in meritocracy, in the state and in markets. It's a future that we have to avoid."