Automation and Implications for Developing Countries and Education Systems

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1 Automation and Implications for Developing Countries and Education Systems Harry Anthony Seoul, Korea November 2017

2 The Schooling Revolution Years of schooling Barro Lee

3 Every Year of Schooling Raises Earnings 10% Montenegro and Patrinos 2014

4 Private Returns to Schooling Primary Secondary Tertiary Montenegro and Patrinos 2014

5 Returns Higher for Women Men Women Montenegro and Patrinos 2014

6 Montenegro and Patrinos Returns to schooling over time

7 Education Commission Benefit-Cost Ratios are High

8 Returns to Alternative Investments (%) Psacharopoulos, Montenegro, Patrinos

9 Quality But Skill shift

10 25% 264 million out of school 262 million in school but can t read One in Four Young People in Developing Countries Unable to Read UNESCO

11 onstructed average PISA & TIMSS scores ) by country/economy Crawford, Hasan, Kattan

12 Percent of workers in occupations with a 50% or higher probability of automation Some East Asian countries still struggle to provide basic literacy skills to students % achieveing basic (level 2) proficiency or higher % achieving advanced (level 5) proficiency or higher

13 Skills Demanded by Labor Market Changing

14 Skills Demanded by Labor Market Changing Levy and Murnane

15 Share in total employment (%) Share in total employment (%) Skills demand shifting towards New Skills Employment Composition (simple cross country average by type of occupation; ) 60 OECD countries 60 Developing countries Non-routine cognitive or inter-personal Non-routine cognitive or inter-personal Routine cognitive or manual Routine cognitive or manual Non-routine manual Non-routine manual WDR 2016

16 Growing Importance of Social Skills at Work Deming 2015

17 Japanese company replaces office workers with artificial intelligence

18 Automation is Coming

19 Robots are Coming

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22 The Race Between Education & Technology Higher Education Enrollment Rate Rate of Return to Higher Education Montenegro and Patrinos

23 47% of Total US Employment at Risk 12 jobs with the largest total declines Bookkeeping Cooks Postal service mail carriers Executive secretaries Farmworkers Sewing machine operators Tellers Postal service mail sorters Cutting, punching, machine setters Switchboard operators Molding Computer programmers WEF; Oxford University

24 Who are most at risk to automation in East Asia?

25 Percent of workers in occupations with a 50% or higher probability of automation Globally, upper middle income countries most at risk of automation 100% 80% 60% 40% Low income Most workers are in informal agriculture and likely safe (for now) from automation Lower middle income Upper middle income High income 20% 0% Log GDP per capita (2010 constant USD)

26 Percent of workers in non-agricultural occupations with a 50% or higher probability of automation East Asian growth coincides with increase in risk of automation 100% 80% Low income Lower middle income Upper middle income High income 60% 40% 20% 0% Indonesia Malaysia Cambodia Vietnam Other countries Log GDP per capita (2010 constant USD)

27 Percent of workers in occupations with 50% or higher risk of automation Post-secondary education graduates have lowest risk of automation 100% 75% 50% primary lower secondary upper secondary vocational post-secondary 25% 0%

28 Percent of workers in occupations with a 50% or higher probability of automation High literacy proficiency associated with lower risk of automation 100% 75% 50% 25% 0% Japan (2011/12) Korea (2011/12) Vietnam (urban 2012) less than level 1 level 1 level 2 level 3 level 4 or 5 Literacy proficiency level (PIAAC and STEP)

29 Percent of post-secondary graduates in occupations with a 50% or higher probability of automation Vietnamese and Japanese female postsecondary graduates more at risk females males Korea (2011/12) Cambodia (2008) Thailand (2000) Mongolia (2000) Malaysia (2000) Indonesia (2005) Vietnam (urban 2012) Japan (2011/12)

30 What can we do?

31 Case Study: Vietnam

32 Returns to Schooling in Vietnam

33 Returns to Schooling in Vietnam PRIMARY SECONDARY TERTIARY

34 Increase Productivity of Schooling Vietnam: Causal effect of a year of schooling: 0.78 SD Compare to no more than 0.4 SD in other countries Abhijeet Singh

35 Bucking the Income Trend

36 Case Study: Korea

37 Examples from Korea Fundamentals: Basic education first Employer-led training in Korea: Training at secondary & postsecondary, based on skill needs, employer-led Engaging the private sector with public funding: Secondary education Higher education

38 Education Commission Get the Basics Right

39 Lessons Focus on early reading: assess, act, align Meticulous: planning, implementation, focus on teachers Invest in relevant skills Improve education systems

40 Invest in Relevant Skills Problem-solving Learning Communication Personal Social Patrinos

41 Improve Education Systems Focus policy on skills, equity and finance

42 Harry Anthony Patrinos World