THE ONGOING global recession should not put at risk the longer-term objectives of education, creating a “lost generation” for the future, warned Nobel Prize winner Christopher Pissarides yesterday.
During a presentation to EU education ministers in Nicosia yesterday, Pissarides looked at the role of education in the implementation of the ‘Europe 2020’ Strategy and on making a successful exit from the crisis.
The first Cypriot to win a Noble Prize in Economics was awarded the prestigious prize for his work on the economics of unemployment, especially job flows and the effects of being out of work.
In his presentation, the Nobel Laureate and Professor at the London School of Economics (LSE) and University of Cyprus concluded that “recessions should not be allowed to put at risk the longer-term objectives of education”.
Recessions were good times to take advantage of and enhance society’s human capital, helping young people improve their labour market prospects both during and after the recession.
Education has a big role to play in the long-term in terms of the quality of jobs and productivity growth.
“Our first and most important concern should be not to allow the austerity to put at risk this function of education,” he said.
“If we make education investment suffer, it is going to leave a scarring effect on the current generation for many, many years to come. To put it in plain language, it is what some people call the ‘lost generation’ because of the fiscal problems that countries have and I feel that it shouldn’t be allowed,” he said.
Education policy may reduce the impact on young people during the recession but it will not accelerate the exit from the crisis, he said, adding that fixing the EU’s debt problems, fiscal problems, financial sector and housing market will help end the recession.
“But it can help offset any long-term impact of the crisis on growth and it can help achieve a more robust growth after it,” he said.
Regarding the EU’s goals for 2020 on productivity growth and competitiveness, Pissarides said member states need to focus in tandem on good investment and good education attainment to achieve the necessary higher growth in productivity.
Europe needs more skilled workers to push through research and development and create the new companies that will become world leaders but it also needs a more balanced view of skills and jobs that will cover the spectrum of jobs, he warned.
“Pay also attention to the needs of the labour market at the more labour-intensive services end,” he said.
In the US, post-industrial growth led to an enormous increase in the demand for labour-intensive, lower skilled services, provided by low-wage immigrants or very poorly paid American citizens.
“Europe is heading the same way. Take Cyprus as an example: it spends more on education than other EU countries, has one of the highest tertiary level qualifications. As a result, it has a very large financial and business service sector and relies on low-wage immigrant labour to run its tourist industry and its shops and hospitals,” said Pissarides.
Europe needs to decide whether it wants US-style inequality, a Nordic-style welfare state or a universal push for more education supported by low-cost immigration, said the Nobel Prize winner.
Pissarides welcomed the European Commission’s initiative to study the future of jobs in information and communications technology (ICT), green sectors, health and domestic services but highlighted the need to coordinate between these initiatives and education policies.