This spread examines the relative earnings of workers with different levels of education. Differences in pre-tax earnings between educational groups offer a good indication of supply and demand for education. Combined with data on earnings over time, these differences provide a strong signal of whether education systems are meeting the demands of the labour market.

This spread examines the relationship between education and the labour force. OECD countries depend upon a stable supply of well-educated workers to promote economic development. Data on employment and unemployment rates – and how they evolve over time – thus carry important information for policy makers about the supply, and potential supply, of skills available to the labour market and about employers’ demand for these skills.

The efforts people make to continue education after compulsory schooling can be thought of as an investment with the potential to bring rewards in the form of future financial returns. People invest in education in two ways (these are the “costs”): directly, for example through the payment of tuition fees, and indirectly, by sacrificing potential income when not in work and studying. As with any investment, a rate of return can be calculated. In this case, the rate is primarily driven by the reality that people with higher levels of education earn more and are more likely to be in work (“benefits”). Where the rate of return is high, it implies a real financial incentive for people to continue their education.

The economic benefits of education flow not just to individuals but also to governments through additional tax receipts when people enter the labour market. These public returns, which take into account the fact that providing education is also a cost to governments, offer an additional perspective on the overall returns to education. At the same time, they must be understood in the much wider context of the benefits that economies and societies gain from increasing levels of education.

The skills of a country’s workforce provide a substantial advantage that can bring economic benefits over the long term. But the extent of such an advantage will be determined by the cost – in other words, how expensive is it to hire skilled workers? To answer that question, this spread looks at the relative cost of hiring workers with different levels of education.

Raising people’s well-being and improving social cohesion are major concerns for OECD governments. There is general agreement on the important role that education and skills can play in attaining these outcomes, but far less certainty over how exactly this can be achieved. Against this background, this spread looks at the relationship between educational attainment and social measures of well-being in OECD countries. It focuses on three outcomes: life satisfaction, voting and attitudes towards gender inequality.