Economic Benefits of Adult Education in the UK

1.  Introduction

Adult education is the education of adults, as distinct from that of children. In recent years, much has been written about adult education and its pursuit. Much of the importance of adult education to the individual, to society, and to professions has been determined through the discussions and activities of those working in the broad field of adult education. Those professionally involved in the education of adults have come to appreciate that their work is shaped by a broader concept of the worth and dignity of the individual and the need of individuals to be self-directing. From this vantage point, progress has been quite rapid in clarifying the aims and improving the professional practice of those providing general as well as specialized education for adults. This pursuit of understanding the nature and educational needs of adults has increased interest and activity among students of higher and adult education and has also provided an area of research and a house of learning for interested persons from a great variety of individual, vocational, and liberal arts and sciences disciplines, professions, and occupations. As a result, the importance of adult education is now viewed in the broader context of an all-out effort to help individuals begin and continue an intelligent inquiry and controlled experimentation into what life should be and how to make it become a reality filled with more satisfaction and a greater sense of accomplishment. This effort includes both a study and activity to develop better conditions of family, occupational, and community living, more desirable personal and social competencies, and understanding of intelligent merchandising and use of both traditional and modern resources for a better way of life. This type of inquiry and action has led to the recognition of the need for an educational effort that is essentially a netting and elevating influence and an educational process that is lifelong, pervasive, and steady. Adult education is therefore now seen in its broad conceptual sense as an essential means to the achievement of a better way of living and to the fulfillment of the several purposes, whether they be immediately practical, such as the improvement of a specific skill, or the increased understanding and wisdom which so often figure significantly among the decision to or not to do something.

1.1  Importance of Adult Education

Adult education is perhaps more important today than ever before. The global transition to a new knowledge-based economy creates unprecedented demand from workers who need to be re-skilled or up- skilled. The pace of technological, economic, and social change is also accelerating, placing a premium on the acquisition of new knowledge and skills. In societies seeking to make the transition from command-and-control economies to creative and entrepreneurial ones, there is also a growing need for adults with the vision and the courage to take risks, but also the critical abilities and lifelong learning habits required to navigate successfully through a world characterized by uncertainty and continuous change. These are the generic attributes of graduates from high-quality adult education programs, whether they are delivered in formal institutions or in the workplace or the community. Adult education also plays a vital role in individual empowerment and social and economic development. Through a process of recognizing and validating existing skills and providing a mechanism for individuals to articulate their aspirations and to engage in learning which is relevant to their needs, it helps release energy and creativity and develop a culture of inquiry. The education provided supports the development of active citizenship, and because it is largely attuned to the learning needs of individuals and local communities, it can improve a sense of ownership and control over the surrounding environment. Adult learning has also been shown to improve health and wellbeing, which has benefits for both individuals, in terms of increased confidence and ability to manage long-term conditions, and for burdens on the public purse. The evidence from the international Survey of Adult Skills (PIAAC) also suggests that adult education has an important intergenerational impact. With the education level of parents being the factor which most influences the educational attainment of their children, adult learning can foster a culture of learning in families, and parents who engage in learning are more likely to help their children with homework and to support their educational transitions.

1.2  Economic Impact of Adult Education

Adult education has faced considerable funding and implementation challenges in recent decades, and in times of restricted government expenditure and increased demands for public and private services, there is a need for government and citizenry to understand the opportunity costs and benefits of investment in specific policy areas.

As Field (2007) has noted, it is extremely difficult to measure the impact of adult learning in a precise manner, and he concludes that research undertaken offers only tentative evidence of whether and how learning affects the range of intended outcomes. The most convincing findings exist in studies of formal adult education and training, where it is plausible to make a causal link between learning and its effects. Although there seems to be an implicit assumption in much government planning of adult education that taking part in learning is beneficial, and a general belief that 'what is good for the individual is good for the state', as Norton and Stone (1997) argue, this is not always explicitly stated or adequately backed up with evidence.

In the context of the recent political and economic focus on the financing and provision of adult education and training in the UK, it is essential to understand the various ways in which investment in knowledge and learning benefits the economy. 'Learning' is taken here to apply to all forms of formal and informal education or training engaged in by individuals outside of initial education, whether to improve general literacy and numeracy skills, to obtain vocational qualifications or for self-enlightenment and personal interest.

2.  Increased Employability

In the context of adult education, increased employability is arguably the most important non-academic benefit. Going into it already employed adds value to existing skills, exposes to new tools, techniques, and methodologies, raising their efficiency and effectiveness. This will help us to accomplish tasks quicker and with greater accuracy resulting in time and cost savings. All of this makes upskilled employees more attractive to existing and prospective employers. This holds true for both employees who seek education with a current employer and those who are looking to re-enter the workforce. On the other hand, for the unemployed the proposition is quite different. Utilizing tools like the UKCES Employer Skills Survey, our research found around 1.5 million jobseekers are in possession of skills that have recently become obsolete. With vast experience in such a role it may be intimidating for them to make the decision to seek less skilled work while retraining on the job, knowing that an employer may hire a less experienced worker who they are able to pay less. Adult education becomes an attractive option in this situation; the acquisition of new skills can open doors to different roles in the same industry and could also offer opportunities to transfer skills to a new field of work. Education and skills development can lead to increased self-confidence and a clearer understanding of career goals, which can be important attributes for a successful job search and subsequent career change. Lastly, the prospect of increased earning potential is a strong incentive. Any skills development that leads to jobseekers becoming more employable will increase their chances of finding work and higher skilled jobs usually offer better pay. For this group adult education clearly has the potential to change lives for the better.

2.1  Acquisition of New Skills

Adult education courses provide an opportunity for learners to acquire new skills and knowledge. Through participating in an adult education course such as a language, computer skills, financial management, or other courses, individuals develop new skills that are relevant to their personal and professional lives. This acquisition of new skills can result in a broader range of activities and interests for the learner. It can also contribute to an increased level of self-esteem and a greater awareness of one's capabilities. In the professional realm, the acquisition of new skills and knowledge can make the difference between an individual being employed in a particular job or industry sector, being unemployed, or being employed in a different job. This is particularly relevant in a time of rapid economic and technological change when employers are seeking employees who possess the latest skills and knowledge to enhance their company's performance. Adult education can enable an individual to keep up with these changes and become a more valuable employee in their current or future position. Moving beyond employability means that adult education can also create new employment opportunities. This was demonstrated by a recent research study conducted in the United Kingdom. The study investigated the role of Further Education (FE) in creating employment opportunities in the context of increasing levels of skill throughout the workforce. The findings indicated that acquisition of new skills and knowledge at FE level resulted in an increased awareness of employment and self-employment opportunities. This often led to the creation of new jobs, with individuals using their new skills to achieve a better job or improved conditions of employment. This occurred both at entry-level positions and more skilled or professional employment. More often, it led to promotions and individuals moving up the job ladder. In turn, the existence of new job opportunities provides another alternative for adult learners.

2.2  Career Advancement Opportunities

This suggests that at an individual level, motivations to progress careers through further education are to move to jobs which better utilize their skills and knowledge. At a wider societal level, it suggests that adult education can be potentially beneficial in terms of skill utilization if there is a match between the qualifications gained and the availability of jobs that require them.

Any movement resulting in a pay increase can therefore be directly or indirectly attributed to career advancement. Adult education can have a direct impact on vertical mobility by opening opportunities for jobs that were previously out of reach and Hawkins (2004) suggests that the main focus for adult learners is to progress in their careers through obtaining a better job. His study found that there was a direct correlation between the level of qualifications held and the type of job that learners were aspiring to do. Adults who wish to upskill in their current job to perform it better will be seeking opportunities for horizontal mobility. This is because skill acquisition is often a precursor for moving to a similar job that has higher status and pay. He concluded that higher qualifications are required to access the best jobs and therefore for many adult learners, career advancement is a key motivator.

'Career progression' and 'opportunities for advancement' are terms widely used by both employers and

employees, but they are often used in a broad sense which encompasses a variety of different job-related aspects. For this article, career advancement opportunities relate to the opportunity to progress into different (usually) higher-paying jobs. Feldman (1999) separates career opportunities from types of mobility often associated with it. Vertical mobility is usually directly linked to career advancement as it involves moving from one job to another that is higher in pay and/or responsibilities. It also has a future orientation, and for many employees, usually means taking on a job that is consistent with their career aspirations.

2.3  Higher Earning Potential

In turn, students who do well out of school are likely to have been independent learners and will value lifelong learning more. If the public sector can provide a second chance structure, these individuals are likely to take up the opportunity to improve their education later in life. This is particularly important given that there is some indication that lower levels of education can be a reason for early retirement due to poor health, which in turn means that investing in adult education on skills that are in danger of becoming redundant may provide a method to improving general health amongst older workers.

The reason that the private rates of return to schooling are so high is that individuals who obtain more education earn much higher wages. Not only do more highly educated individuals have higher wage rates, but there is a systematic increase in wage rates over time as careers progress. For example, Foreland and Steiner (2007) find that for males in the UK, the gradient of the earnings profile is almost 10 percent higher earnings per annum. Husbands and Michalopoulos (1996) find that for married men in the UK, the return to experience is up to 24 percent higher. The differences are even more pronounced for women, with the results from Steiner and Grow Green (2001) suggesting a 14 percent higher rate of returns and the Christofides and Grad dinner study of 2006 suggesting a 15.5 percent higher return.

Among the most direct macroeconomic effects of education on the economy are the increased earnings that accrue to individuals with additional education. There is considerable evidence that this is true in the UK.

3.  Enhanced Productivity in the Workplace

Employees are instrumental to improving the productivity of an organisation and the skills and knowledge they develop through ACE help to contribute. There are various studies, mainly from America and Australia, which have attempted to measure the impact of employee skill levels on organisational performance. The research findings suggest that the skills and qualifications of individual employees can significantly impact on business performance in areas such as productivity, quality, innovation, customer service and profitability. A study of 60 Australian companies found that non-managerial employee competencies were significantly related to perceived organisational performance across the 12 different industries studied. The study found that boosting the literacy levels of employees, especially at the lower end of the scale, had the greatest potential to lift performance in certain industries. This applied to various industries. A similar study in America found that educational disparities are a major cause of differences in productivity across the workers and industries of the economy. The UKCES Employer Skills Survey 2009 found that more than a quarter (27 per cent) of employers reported that there were skills gaps among their non-managerial employees, and a further 15 per cent of employers reported that there were productivity deficits in their non- managerial employees and that these were due to their low skill levels. These findings suggest that employers in the UK stand to gain from increasing the skill levels of their employees to improve business performance.

3.1  Improved Job Performance

Informal learning through experience on the job is the most common way that adults learn how to do their work better. It is also the most effective way to become competent at a task. While this type of learning is difficult to measure in terms of time and money, unpaid work time is the largest investment adults make in learning. For example, one Australian study found that adults spend an average of 55 hours every year in unpaid overtime learning how to do their jobs better. This unpaid learning is not specific to adults with low levels of formal education and it does result in improved job performance. It is also likely that a large proportion of this informal learning is a result of increased formal education. Adults often return to school to learn specific job-related skills and this learning is usually directly applied to an improvement in job performance. It is obvious that employment in jobs requiring higher levels of education and skills will often entail a greater use of learned skills and thus an improvement in job performance. Finally, formal education can improve job performance through the transfer of new knowledge and skills learned at an educational institution. Adult learning is known to improve literacy and problem-solving skills. Therefore, we can say there is a strong and varied relationship between adult learning and improved job performance.

There exists a strong relationship between adult learning and progress in job performance. Measuring the results of education on job performance is quite a complex and controversial task. However, one review of the literature found clear evidence that adult learning results in improved job performance. This evidence was found in well-controlled experiments or quasi-experiments that demonstrate a cause and effect.

relationship between learning and performance. There are a variety of types of learning that lead to improved performance.

3.2  Increased Efficiency and Innovation

An increase in work performance and innovation is also likely to affect the work practices and processes within organisations. This is because if a firm believes that the best way to increase productivity is to up skill its workers and it is successful in doing so it may decide that the most cost-effective way of maintaining the new productivity of its workers will be continual learning. This can be thought of as a cost of capital theory of skill as learning. (Ref. Desjardins 2003) This should lead to an overall increase in the efficiency of the workforce, as skill gains are maintained or furthered and should serve to increase productivity gains in the long run. The timing of learning may also be important here. For example, if a worker believes that the most cost-effective way of learning some new skill is to do so whilst out of employment and it is shown that learning activity rises when the opportunity costs of learning fall, his decision may be to quit his job and learn full time. (Ref ibid) This would be inefficient for the employer and the economy and so it is important that adult learning is done in a way which does not disrupt the labour market and involves minimum human capital loss.

The quality of learning undertaken by individuals is likely to affect the innovation growth in the economy. There is some evidence to suggest that high skilled adult workers are more likely to be innovative as learning often leads to new ideas or improvements and increased skill make it easier to implement those ideas. (Ref Desjardins, R. (2003) Measuring the effects of adult learning on labour market) Steedman et al (2001) suggest establishing the presence of an innovation market in which decisions to engage in innovative activity are influenced by the expected costs and benefits of innovation. High wage costs represent an

additional cost of innovation and if employers believe that the most cost-effective way of innovation will be to up-skill existing labour, then it may be that they are more likely to use methods of learning as a means of increasing efficiency and implementing new ideas.

Improved efficiency, including: - Increase in innovation - Reduction in production costs - More efficient work practices and processes - better method of applying new ideas (Ref HEFCE (2002) The Learning Age)

3.3  Reduced Absenteeism and Turnover

"Reduced absenteeism and staff turnover - Given the increased productivity and improved job performance which stems from adult learning, a corollary (if somewhat difficult to measure) is likely to be a reduction in the rate of staff absence and turnover. As mentioned previously, the effect of learning on productivity is likely to be cumulative over time. However, evidence was found of a more direct effect of learning on absenteeism and turnover. The Canadian evidence at both the individual and the provincial level demonstrates clearly that higher levels of schooling are associated with lower rates of absence. At the individual level, qualified teachers were found to have lower rates of absence than unqualified teachers (Martel, 1995). At the provincial level, the evidence from a number of studies is that increased investment in education leads to reduced rates of absence for the labour force as a whole (Lascelles and Charles, 1995; Robitaille, 1995)." This is consistent with the findings that educated employees are healthier and tend to adopt healthier lifestyles (discussed above). An example of a "healthy lifestyle" choice which impacts on work is the decision whether to take early retirement. In the context of rising state pension ages and concerns over the affordability of public sector pensions, there is increasing interest in policies to extend working life. This would contribute to the stock of human capital within the workforce and hence productivity (Buck et al, 2009). High on the list of barriers to working longer is the health of older workers. It has been found that prior to a raising of the state pension age in the USA, poor health was the most cited reason for taking early retirement (Quinn and Burkhauser, 1994). The link between education and health suggests that increasing educational attainment in the workforce could be an effective way to encourage longer working lives.

4.  Societal Benefits

Very simply put, the more adults are at work, the less likely they are to be unemployed or economically inactive. Non-participation is associated with a range of social ills, but in terms of public expenditure, the biggest problem is the relationship between non-participation and dependency on welfare. Adult learning can reduce dependency in two ways: firstly, by improving an individual's employment prospects, and secondly, by improving their skills level so they are less likely to lose their job in the event of adverse economic circumstances. Gains can be made at all skill levels, though again, the gains are greater for those with lower prior attainment, and for those with or facing children. At the level of low qualifications, returns to learning for the individual are typically outweighed by broader social benefits in terms of reduced public expenditure, while for higher qualifications return to the exchequer are often greater than returns to the individual. At a time of economic downturn, it is important to note that evidence shows some participation in learning, even for those facing redundancy, can reduce the likelihood of unemployment. One measure of civic engagement is political participation. A recent study by the Institute for Learning found that only a third of those with no qualifications vote in general elections, compared to three quarters of those with a higher education.

qualification. Electoral participation increases at each level of learning, reaching a peak in the post-16 sector. At least part of the explanation for this is the perceived self-interest of voters: a more educated person is more likely to vote if he believes that policies will benefit him, and people are more likely to believe that education policies will benefit them if they have received guidance and support to enter learning. This holds true for people of all ages, so that a parent learning to improve his qualifications is more likely to involve himself in his child's education and to support his child in entering post-compulsory education.

4.1  Reduced Dependency on Welfare

A key economic benefit that is often discussed in the literature related to adult education is the concept of reduced dependency on welfare by individuals who are more highly skilled. The argument goes that a more highly educated workforce will be more able and willing to support themselves and their families and will therefore place a smaller burden on the welfare system. In discussing the relationship between education and welfare dependency, it is important to consider the overall enrollment levels of the population and the rates of transition between unemployment and welfare dependence. Unfortunately, the data on welfare dependency with respect to education is not readily available. Therefore, the percentage of adults aged between 25-64 who are more than two years from their last educational spell has been used as a simple inferred variable. In comparing this against the ratio of 25–64-year-olds who are less than two years from their last educational spell, we would hope to see that the latter group is less likely to be dependent on welfare. Using the International Adult Literacy Survey (IALS), it is possible to use unemployment as a proxy for welfare dependency, assuming that those who are not employed are more likely to be dependent on welfare. This analysis was conducted by John Ainley, and though not published, statistics on this analysis are available from the author. He found that across 12 OECD countries, there was a strong relationship between educational attainment and being in the workforce. While data for being on welfare as opposed to being out of the workforce was not looked at, it is not unreasonable to assume that those who are not in the workforce are also more likely to be dependent on welfare. This would mean that the difference in workforce participation rates between more and less educated individuals would understate the effect of education on welfare dependency.

4.2  Increased Civic Engagement

Increased civic engagement of learners may be another potential societal benefit. As already noted, many adult learners have had negative educational experiences and as a result have been alienated from the political process. Increasing their educational level can change this situation in a few ways. Firstly, the process of adult education itself can increase political interest and awareness. For example, evidence from the United States shows that participation in adult education or higher education is associated with increased interest in public affairs (Pascarella et al., 1998). In the UK, data from the 1991 National Child Development Study shows positive relations between education and political interest, knowledge, and participation in a range of different activities, for example contacting a local councillor, taking part in a public demonstration, or joining a political party (Henderson, 1998). Step Change: Is there potential to delve deeper and use the same categories as in the literacy study here? But to make them clearer/more categorical and get more to the 'how' and 'why' adult education causes change of 'step'.

4.3  Improved Health and Well-being

Improved health and well-being have been mentioned by many adult learning participants. Many of them are aware of their state of health and wish to become healthier. Many believe that volunteering learning can improve their health. This is in line with studies which have found that learning in later life has a positive effect on the health of older adults. One such study was conducted by the UCL Institute of Education and Birkbeck, University of London. The research, funded by the Nuffield Foundation and conducted over two years (2011-2013), was the first to provide evidence of the impact of learning on the mental health of older adults in the UK. Drawing on data from the English Longitudinal Study of Ageing, the research found that adults aged 50+ who were involved in learning showed an increase in self-esteem and a greater ability to take setbacks in their stride. The research also found that there was a reduction in depressive symptoms and a feeling of helplessness.