Why is ESL a problem for contemporary (EU) society?

Early school leaving in the EU is recognised as being a complex educational, economic and social problem (e.g. Council of the EU, 2011; 2015). The question of what defines ESL as a problem is crucial given that problem structuring is seen as the most critical task in the development of any policy (Dunn, 1981). Therefore, much attention in EU policy documents as well as in research is paid to demonstrating the problems (negative consequences/impacts/effects/costs) ESL brings to individuals, societies, nation-states and the EU as a whole. This level of attention helps EU member states identify and understand problems with education and training at the national level (Ecorys, 2014) and provide a key rationale for tackling ESL among all relevant actors (Ross & Leathwood, 2013).

Typcially, the literature addresses ESL by considering the costs ESL brings to different individual and collective entities (Belfield, 2008; Brunello & De Paola, 2013; Psacharopoulos, 2007). In that framework, Psacharopoulos (2007) distinguishes the following costs brought about by ESL: private (realised by the individual and mostly directly observed in the market); social (impact on society as a whole and not directly observable); fiscal (taking the form of foregone benefits). Noting that the costs of ESL typically last the course of an individual’s lifetime, Dale (2010) and the European Commission (n.d.) explain how these categories may also be understood as the short-term (private costs), medium-term (social and economic costs in the form of lower income, reduced tax revenues and higher costs of public services related, for example, to healthcare, criminal justice and social benefit payments, leading to low economic growth) and long-term consequences of ESL (social and economic development). These discussions closely correspond with discussions on the role of education in contemporary EU society where quality education is defined as a prerequisite for social cohesion and economic growth (Lisbon Strategy) and smart, sustainable and inclusive growth (Europe 2020 Strategy).

Apart from the economic studies that prevail in this area, several other research studies come into play, ranging from sociology to medicine, political and to a limited extent educational science. Hankivsky (2008) explained that, as case studies of such research, the literature is dominated by the USA (e.g. Belfield & Levin, 2007; Chaplin & Lermar, 1997; Cohen, 1998) and to some extent Australia (e.g. Business Council of Australia, 2003; Lamb, Dwyer, & Wynn, 2000) and Canada (e.g. Human Resource Development of Canada, 2000) and that European countries have more or less been absent. Almost a decade after Hankivsky’s review, some studies presenting the consequences of ESL for particular member states and the EU as a whole can be identified (for a review, see Brunello & De Paola, 2013; European Commission, n.d.), yet those from the USA (e.g. Catterall, 2011; Sum, Khatiwada, & McLaughlin, 2009), Australia (e.g. Deloitte, 2012; Lamb & Huo, 2017) and Canada (e.g. Canadian Council on Learning, 2009) continue to prevail. Since ESL is a social phenomenon, also highly influenced by system-level factors, the article elaborates on the consequences of ESL in the EU context. It looks at other countries only to a limited extent in order to make some comparisons or provide valuable data that is missing in the EU setting.

Since the private and social costs of ESL are already addressed in the TITA scientific base from the standpoint of the individual ESLer, this contribution focuses on the medium- and long-term social and fiscal (economic) consequences of ESL. [1] As such, it addresses the question “Why is ESL a problem for contemporary (EU) society?”. After introducing the topic, the article first presents the economic (fiscal) consequences of ESL, second, the social consequences are described, third, different unresolved questions of researching and understanding ESL as a problem of economic and social development are mentioned, while the conclusion summarises the main findings.

This article draws on a review of theoretical and empirical evidence. To address the article’s aims, we apply the following methods: (a) an analysis of relevant literature and secondary sources. Here we conducted a literature search of the scientific EBSCOhost, Web of Science and Google Scholar online research databases. The main key words used in searching the relevant scientific literature were: early school leaving, consequences, impact, effect, social cohesion, social development, economic growth, economic competitiveness, economic development; and (b) an analysis of EU-level formal documents and legal sources (Council Resolutions, European Commission Communications, Reports of Expert Networks).

Discussions on the economic consequences of ESL arise from general discussions on the importance of education (e.g. quality and attainment levels of individuals) for economic development (e.g. Hanushek & Wößmann, 2010; OECD 2010). For example, it is estimated that in the OECD countries each year of schooling is statistically significantly associated with a 0.30% higher rate of economic growth (Psacharopoulos, 2007).

Studies concentrating on the economic consequences of ESL are mostly based on a calculation of the estimated costs (including lower tax revenues and/or higher unemployment and welfare payments and/or higher public health expenditures and/or higher police expenditures and/or higher criminal justice expenditure) per individual ESLer lifetime and by calculating the returns of an additional year of schooling. Taking into consideration the number of ESLers and the differences between the target (ESLers) and non-target group (non-ESLers), studies then calculate the aggregate costs of ESL at the national/EU level and/or financial gains expected from reducing ESL at the national/EU level (Nevala & Hawley, 2011; European Commission, n.d.).

The estimated costs of an ESLer per lifetime differ widely among the EU member states and studies conducted. Brunello and De Paola (2014) report they range from EUR 33,000 in Ireland to about GBP 56,000 in the UK, from EUR 120,000 in Norway to EUR 157,000 in Estonia. Somewhat different amounts are reported by the European Commission (n.d.), showing that the lifetime costs of an ESLer range from EUR 100,000 through EUR 200,000 up to EUR 1.1 million. A review of studies that estimated the total cost of ESL and financial gains expected from reducing ESL in some European countries is presented in Table 1.

Table 1: Review of studies presenting financial gains expected from the reduction of ESL

Sources: Calero & Gil-Izquierdo (2014); European Commission (n.d.); Nevala & Hawley (2011)

Due to the different research methodologies used in estimating costs, the range of costs included in the calculations, and differences in national contexts in which studies have been conducted, it is very difficult to make comparisons (Beirn, 1972; European Commission, 2013, n.d.; Van Alphen, 2009).

Among the various national studies, some studies also estimated the costs of ESL for the EU economy as a whole. More than a decade ago, basing the calculation on the assumption that ESLers have 6% lower productivity than qualified leavers, and using the 2005 figure of 23% unqualified leavers, suggested that ESL causes the European economy a productivity loss of 1.4% (European Commission, 2006). The European Commission (n.d.), using Eurofound calculations, shows that the annual cost of NEETs to the 21 EU member states (DK, EL, FI, FR, MT, SE, CRO not involved) is approximately EUR 100 billion (EUR 94 billion in foregone earnings and EUR 7 billion in excess transfers), which corresponds to 1% of their aggregated GDP. Considering the Europe 2020 flagship initiative ’An agenda for new skills and jobs’, the European Commission (2011) estimates that “To reduce the average European ESL rate by just 1 percentage point would provide the European economy each year with nearly half a million additional qualified potential young employees”. Reflecting the estimation that the share of jobs available to low skilled people will drop in the near future from 20% to less than 15%, it is predicted that the economic consequences of ESL in the EU will become even worse. Despite numerous projections, the European Commission (2013) argues that so far it has been difficult to accurately estimate the costs of ESL at the EU level.

Only a few studies in Europe have evaluated anti-ESL measures with regard to their cost efficiency (relationship between the cost of an anti-ESL measure and the estimated benefit of reducing ESL). [2] Existing studies indicate that policies differ in their efficiency, but also that measures have varying impacts on different groups of pupils and in different contexts. Despite their methodological limitations (e.g. the long-term effect of policies is often insufficiently factored in), their results allow the conclusion that the total costs for society created by ESL far exceed the costs of most measures aiming to reduce ESL (European Commission, 2011; 2013; Nevala & Hawley et al., 2001, p. 51).

The studies overviewed above show that the economic consequences of ESL demonstrated as costs of ESL present a huge obstacle to further national and EU economic growth, and vice versa that countries can achieve high total gains from cutting ESL. Accompanied by cost-benefit studies of various interventions already implemented, this underscores the claim that policies addressing ESL continue to be needed and represent a worthwhile investment in the EU’s economic development.

Despite these very convincing research results, deficiencies in their methodologies (cost-benefit, scenario-making, policy and social experimentations) used to estimate the costs of ESL have been identified, which somewhat question the credibility of their results (Brunello & De Paolla, 2013; European Commission, 2013; Green et al., 2004; Hankivsky, 2008; Psacharopoulos, 2007):

• difficulties in scenario-making due to high complexity and the rapidly changing environment of contemporary society and economy (problems with estimating the medium- and long-term consequences of ESL; predicting and including particular costs in calculations);
• the issue of fully identifying the causal impact of education on various outcomes (observable and unobservable characteristics of ESLers and the control group on which the benefits of ESL policies are evaluated);
• the lack of data (a major difficulty in identifying education externalities is that the output, as typically measured in national accounts, only includes market-recognised effects of education and not other costs (e.g. social costs impacting society as a whole and not directly observable).

The social benefits of education (social cohesion, social inclusion) lie at the heart of the EU’s (Lisbon, EU 2020) policy agenda. The Council of Europe (2008) defines social cohesion as "the capacity of a society to ensure the well-being of all its members, minimising disparities and avoiding marginalisation". Similarly, the OECD (2011) calls a society “‘cohesive’ if it works towards the well-being of all its members, fights exclusion and marginalisation, creates a sense of belonging, promotes trust, and offers its members the opportunity of upward social mobility”.

While various academic studies have discussed the microsocial benefits of education (social and civic engagement), a sense of belonging, trust, equality, inclusion and mobility of individual students), the macrosocial benefits (social development, social cohesion of nation-states, the EU) have been studied to a limited extent. Green, Preston and Sabates (2003) argue that, due to their conceptual differences (level and emphasis on the relational properties and social functioning), the macrosocial benefits of education cannot be simply understood as the aggregation of microsocial benefits. This fact may at least partly explain the high complexity of the macrosocial benefits of education (e.g. social cohesion) and the absence of clarity on what they actually encompass and how education may affect them.

Green et al. (2004) argue that great variations in definitions and various meanings within/between national contexts additionally make researching the relationship between education and social cohesion an extremely difficult task. [3] They (2004, p. 124) add that work relating to the influence of education on social cohesion is often qualitative in nature and that it is difficult to operationalise and test hypotheses related to learning and social cohesion within a positivist framework. The OECD (2006) notes that, while human capital theory links education to economic outcomes and offers a robust framework for scientific investigation and policy analysis, there is to date no widely accepted theory linking education to social outcomes which could at least partly explain the lack of research in this area (Fernandez Gutierrez & Calero Martinez, 2014).

Hankivsky (2008) discusses the social consequences of ESL in terms of intangible costs and non-market effects of ESL. She argues that, although these aspects are crucial for further social development, they are very difficult to quantify. In any case, based on her research she made the assumption that intangible (social) costs are equal to 50% of all tangible (economic) costs of ESL. It has also been estimated that the intangible costs far surpass all other direct and indirect costs of ESL combined.

Psacharopoulos (2007, p. 29) argues that since it is very hard or even impossible to monetise the social effects of ESL, this makes them less convincing policy arguments than the economic costs of ESL. These observations coincide with some other warnings that areas that are more easily measurable attract more (policy) attention than more difficult-to-measure areas. In doing so, there is a fear that areas that do not directly contribute to performativity are in danger of becoming worthless (Ball, 2003; Ozga, 2003).

ESL holds important long-term social consequences in terms of social cohesion and the development of nation-states and the EU. Although they are very hard (if not impossible) to quantify and measure, they should not be overlooked when designing, implementing and evaluating policy measures against ESL.

Several critical approaches have been developed in policy analysis that challenge the positivist understanding of policy problems as a neutral category. They claim that policy problems are not neutral but represent social constructions and that policy problems do not pre-exist but are actively created and produced. The literature review shows that the ESL problem can also be understood in that framework.

When taking the critical representations of policy problems formation presented above into consideration, it is important to see how the social and economic consequences of ESL are presented as a rationale for understanding ESL as a problem for contemporary (EU) society. Gillies & Mifsud (2016) from a Foucauldian perspective, Grimaldi (2012) by analysing neoliberalism influences and Macedo, Araújo, Magalhães and Rocha (2015) through the lenses of sociology of education define ESL as a political concept, pursuing a specific solution by providing a specific (economic) vision of the problem and their prevalence over social goals. [5] Similarly, Ross and Leathwood (2013, p. 415) refer to the need to evaluate the success of ESL measures according to their contribution to addressing social exclusion, division and inequalities and not solely how they contribute to the overall economic prosperity of society, as is the existing practice.

The perception of ESL holding negative consequences for individuals and society and bringing positive benefits via increased educational attainment sensitises and induces policymakers to design policies in an attempt to take corrective action and address the ESL problem (Brunello & De Paola, 2013; Psacharopoulos, 2007).

The paper overviewed a broad range of academic research and EU policy documents discussing the long-term macro-economic and macro-social consequences of ESL (economic growth and development, social cohesion and development). The overview shows that in identifying education externalities, the output, typically measured in national accounts, most commonly includes economic (market-recognised) effects of education since it is hard or even impossible to quantify the social effects (Psacharopoulos, 2007). ESL is thus generally presented as huge obstacle to further national and/or EU economic growth in terms of the costs of an individual ESLer per lifetime and the financial gains of potentially reducing ESL. According to critical approaches of understanding policy problems (wicked problems, governance of problems, problem represented to be) that were also presented in the paper, this creates the possibility that the social benefits of education and thus the social negative consequences of ESL will become overlooked when designing measures against ESL and opens the question of whether studies that point out the financial costs are not being used to justify a distinct (economically oriented) policy regarding ESL in the EU.