Reflections
Number 4
Perspectives
February
2000
EDUCATION AND EMPLOYMENT IN A WORLD OF
6 BILLION:
Major Challenges Ahead for Policy-Makers in the Pacific Islands
by
William J. House
Adviser on Population Policies and Development Strategies
The size of the world's population has recently
surpassed 6 billion persons. Meanwhile, the
demographic dynamics of the Pacific Island
countries (PICs) will have important
implications for these nations’ capacity to
realize future sustained economic growth and
sustainable development. Nowhere are the
consequences of expanding new generations
likely to have a greater impact than in the
sectors of education and the labour market.
Yet, the economies of the PICs are constrained
by major bottlenecks and have failed to
generate new sources of economic growth,
with the consequence that efforts to
accommodate burgeoning populations – in paid
jobs, good housing and with adequate health
care – will require innovative policy
interventions as a matter of urgency.
both relative and absolute terms in their schoolage cohorts. Micronesian countries will also
experience growth, but of a lower order of
magnitude. Over the next decade the number
of school-age children in the Solomon Islands
will increase by an average of 3,600 per year,
an annual growth rate of 2.7%; in Vanuatu the
growth could reach 3.6% annually.
Meanwhile, because of still low rates of
transition from primary to secondary levels of
schooling, several countries face the
formidable task of attempting to extend
provision of education to an increasing
proportion of the age group, at the same time as
the numbers in the group are growing at a high
rate.
Resource Implications
Expanding School Enrolments
In a world of 6 billion, school-age populations
will boom in the 21st Century in several of the
island countries. Based on assumptions of
falling fertility and migration, and increasing
life expectancy, Tonga is the exception and
likely to face a large fall in its school-age
population. Fiji and Samoa undergo small
increases in theirs. However, the Melanesian
states of Papua New Guinea, Solomon Islands
and Vanuatu will confront significant growth in
The resource implications of these scenarios
are quite staggering, even if unit costs per
student are held constant at their currently
unsatisfactory level. For example, were PNG to
attain universal primary school enrolment by
2010, a 50% rate for the 13-16 year olds and
only 20% for the 17-18 year olds, the education
budget would need to expand by at least 43%
over the 1995-2010 period; in the Solomon
Islands this would be 82% and in Vanuatu
95%. In the face of past slow growth in
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national production and poor prospects for the
future, the shares of expenditure on education
in GDP and in Government budgets would
need to expand significantly.
management structures could bring about a
containment of unit costs and the expansion of
access to quality education for the rising
numbers of young in the ‘new generations’.
At present, 40% of all Pacific children fail to
complete a basic primary education and only 1
in 5 graduate from secondary school. Efforts
to improve access to education need to be
redoubled in the face of these anticipated
increases in the numbers of children and youth.
Schooling and Economic Growth
Are Interdependent
Even more difficult, in light of the region’s
demographic changes and the priority to
expand the number of places, will be the
challenge to upgrade the poor quality of
education in the Pacific which remains a major
impediment to productivity growth and
economic diversity and expansion.
The Policy Response
What should be the policy response to these
rather pessimistic scenarios? At a time of
intense social pressures and stress at individual
and family levels, when the youth of the
Pacific face great challenges to their sense of
identify and self-worth, an appropriate policy
response by the authorities can promote a sense
of optimism about their future, improve their
mental health and create opportunities to
improve their financial security and overall
quality of life.
Evidently, a population policy incorporating
an effective approach to the reproductive and
sexual health needs of individual men and
women, including their unmet need for family
planning, can play a strategic role by
eventually inducing a decline in the numbers in
the relevant age groups and ultimately, in
promoting population stabilization in these
countries. Second, while the combination of
tight public funding and rapidly rising schoolage populations would mean that quantitative
enrolment targets are met only by allowing
further deterioration in the quality of
education, an offsetting strategy must be to
reduce the unit costs of schooling.
Innovations, such as policies for cost recovery
in higher education, a reallocation of
expenditure from the top to the lower rungs of
the schooling ladder, and decentralized
Finally, it is important for policymakers and
planners
to
recognize
the
two-way
interdependence between economic growth and
the creation of human resources and human
capital. Human capital serves as a key input
into the national production process; without
economic growth the resources required to
accommodate the needs of a growing school
age population, and their aspirations for quality
education, will not be generated. Thus, policy
must focus on the generation of higher rates of
economic growth, the fruits of which are
distributed in a more egalitarian fashion such
that the newly educated, growing youth
populations of the Pacific gain access to
remunerative and satisfying employment, in
fitting with their acquired formal education and
vocational training.
More Jobs Will be Needed
On the employment front, the challenge may
well be equally daunting. The number of
younger job seekers – or youth – coming into
the labour markets of the Pacific island
countries will increase dramatically in the near
future. While this kind of expansion in the
labour force has the potential to be a
demographic “bonus” if the newcomers find
remunerative employment and help to expand
national production of goods and services, and
thus, induce economic growth, the situation in
the island countries may be radically different.
Despite generous amounts of overseas aid and
significant rates of public investment,
economic growth has been less than impressive
in most of the PICs in the recent past, resulting
in the so-called “Pacific Paradox”. Low rates
of economic output have meant that
employment growth in the highly remunerative
formal sector has stagnated. At the same time
as female labour force participation rates have
increased, swelling the numbers of female jobseekers, many governments have put a brake
on public sector employment expansion. The
result is that labour markets have become much
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tighter, employers have become much more
selective about whom they hire, often using
educational attainment as a screening device,
and young persons have sought to accumulate
such credentials by staying on longer in school
in order to appear more employable in the
intensely competitive labour markets of the
region. Without dynamic economic growth
and job expansion, the buoyant ‘young new
generation’ will become a burden rather than a
bonus.
Forestry and Fishing) with 17%. Only 9%
were engaged in Mining and Manufacturing
and 10% in Trade. Almost 37% of the formal
sector labour force worked in the public sector
and the balance in the private sector. With the
privatization policy of the government
currently under implementation, it is expected
that the size of the public sector will decline in
absolute and relative terms, dampening the job
prospects of the burgeoning number of new job
seekers.
An Illustration
The figure illustrates the growth in the size of
the labour force based on the assumption of
constant labour force participation rates. The
graph shows that the country's labour force will
rise from 198 thousand in 1996 to 408
thousand by 2016 for Projection A (Constant
Fertility) and to 375 thousand for Projection B
(Declining Fertility).
A numeric illustration of the enormity of the
employment challenge facing the island
countries will illustrate the point.
An important development goal throughout the
Pacific is the creation of a technically skilled
labour force in order to generate economic
growth. Because most new entrants to the
labour force over the next 15 years or so are
children who have already been born, the
future growth of the labour force can be easily
predicted.
In 1986, the number of new jobs required
annually to employ additions to the labour
force was 5.6 thousand; by 2001 this will have
increased to over 8 thousand and to at least 10
thousand by 2016. Yet, only about 500 new
jobs are created annually in the formal sector in
Solomon Islands – Labour Force (000’s)
the Solomon Islands,
the majority coming
450
in the public sector.
400
Projection A
Thus, over 90% of
350
Projection B
new entrants are
300
absorbed into the
subsistence
or
250
informal sectors, or
200
become unemployed.
150
100
50
0
1996
2001
2006
2011
In the Solomon Islands, for example, of an
estimated labour force in 1986 of 137.4
thousand, only 24 thousand (or 17.5%) were in
formal paid employment. The remaining 113
thousand (or 82.5%) were engaged in the
subsistence and informal sectors. The bulk
(37%) of those in the formal sector were
engaged in Administration and Services,
followed by the primary sector (Agriculture,
2016
Employment
Expansion and
Economic
Reform
Most of the other
high
fertility
countries in the region face comparable
challenges. Their capacity to absorb the
rapidly growing new generation of job seekers
is hindered in the short run by the downsizing
of public sectors as part of economic reform
programmes, the lack of private sector
investment and poor economic growth
prospects.
Only if and when on-going
economic liberalization and labour market
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reforms induce new investment activity and
employment expansion can we expect an
improvement in the job market prospects of the
rapidly growing number of school leavers.
Implications for Older Workers
Growth in the number of youths seeking
employment, together with a rising proportion
of younger women, may well have deleterious
effects on the job prospects of the expanding
number of older workers, particularly those
over 45 years of age. As evidenced in Europe
and elsewhere, because of more intense
competition from younger workers, older
workers are often pressured to retire earlier and
drop out of the labour market. With often
inadequate social security and pension
coverage in the island nations, the impact on
the older generations can be profound, with
rising rates of unemployment, job and income
insecurity and a growing sense of despair.
Policy Response
As the world’s population has surpassed 6
billion, and we enter the new millenium,
innovative policies are required in the island
nations across a broad spectrum of issues.
Economic growth must be revitalized to satisfy
the job aspiration of the new generation of
better educated younger workers; labour
market and other macro-economic policies
must be introduced that will attract new
investments; vocational training opportunities
must be expanded to raise the human resources
base of these economies and retraining
schemes introduced to cater for the needs of
older workers whose skills have become
obsolete. And capital markets must be created
or reformed to enable small-scale, informal
sector entrepreneurs to gain access to investible
funds that will contribute to solving the
employment challenge.
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Reflections will be published periodically by the UNFPA Country Support Team for the South Pacific. Views
expressed do not necessarily reflect the opinions or policy of the United Nations Population Fund. Correspondence
should be addressed to: The Director, UNFPA Country Support Team, GPO Box 441, Suva, Fiji. Phone: (679) 312865 Fax: (679) 304-877 Internet email: Registry@unfpacst.org.fj
Homepage: http://www.undp.org./popin/regional/asiapac/fiji/fijihome.htm
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