Case studies

Four study visits were arranged as part of the project during the course of 2013. Finland, Denmark, Hungary and Spain, as project partners were chosen in order to cover four culturally, politically and educationally different realities in Europe. The aim of the case studies is to portray the overall situation in each country in relation to discussions currently taking place on employability and the factors that influence them. The ongoing reforms in the education sector and their effect on employability and the perceived impacts of the reforms would be are discussed from different angles. In addition, the unemployment situation in relation to employability as a concept is explored as well as the perceptions of the different stakeholders that work within the realm of employability.

Finnish case study

Background on the education system

The higher education system in Finland is compiled out of two distinct sectors, universities and universities of applied sciences. Studies at universities have the goal of completing a Master’s degree and emphasise scientific research and education. Studies at universities of applied sciences have the goal of completing a Bachelor’s level and are more profession oriented.

Universities have a long standing history in Finland. The first university was founded in Turku in 1640. Universities of applied sciences were founded in the 1990s. The aim was to raise the level of education, to offer different study paths and to serve the changing needs of working life and the society.

Image There are about 310,000 students in higher education in Finland. 143,800 study at universities of applied sciences and 168,000 at universities. The average age of graduation is 29 years for the first degree (oecd, Education at a Glance 2013). About 60 per cent of students work part-time or full-time.

Higher education is free of tuition-fees in Finland. A pilot programme enabling higher education institutions to charge fees to non-eu students came to end in 2014. There is therefore an amounting pressure to implement fees for international students. Higher education is mostly financed by the state. In total, the budget of universities of applied sciences’ is 900 million euros and the budget of universities is about 1.9 billion euros. The total budget of the Finnish state amounts to about 54 billion euros in comparison, so the investment in higher education is quite big in proportion. 6.6 billion euros of the samok were used in higher education in 2013, but that number is expected to decrease by 60 million euros in 2014.


Youth unemployment is on the rise in Finland. In February 2014 there were 654,000 people aged from 15 to 24 in Finland. Out of this group, 238,000 had jobs and 71,000 were unemployed. Thus, the total work force in that age group amounted to 309,000 people. The official rate of unemployment (share of unemployed of the work force) was 22.9 per cent in February. That was 1.5 per cent higher than the year before. However, it is worth to note that the share of unemployed youth in the whole age group was (only) 10.8 per cent. (Source: Statistics Finland)

Graduates unemployment

About 39 per cent of the Finnish population has a higher education degree. Only 13 per cent of the unemployed have graduated from higher education institutions. The unemployment rate among graduates is therefore not significantly high. However, the situation is becoming worse. Unemployment among recently graduated people is rising more rapidly than the unemployment of graduates from upper secondary schools or vocational schools. Forecasting institutions expect that the overall employment situation will slowly start improving from 2015 onwards.

Reforms or other changes affecting employability

1. Financing of higher education reforms
Both the higher education sector and the financing systems have been reformed between 2013 and 2014. The new financing frameworks put an emphasis on graduation. Universities of applied sciences receive 50 per cent of all financing based on the number of graduating students and quick progression in the studies. 24 per cent of the financing is based on the amount of ects credits completed within a study year. 3 per cent of the total financing is allocated based on the graduates’ employment rate and 3 per cent based on the students’ feedback. 4 per cent is based on internationalisation and 2 per cent on the share of publications.

Good practice: One initiative concerning this funding model is that samok, the education ministry and rectors’ conference, draw up the graduate survey which will determine a part of the financing allocated based on students’ feedback (1–2 per cent). Issues looked at will include employment, opinion on quality of studies, student support services, student union activities etc. This should be launched for the first time in the spring 2014.

2. Grant system changes
There have been changes to the grant system that also affect employability. The total number of months that a student is eligible for a grant has been limited. Additionally, the number of ects credits that a student has to complete per month has been increased, which is connected to receiver of the grants. On the other hand, the grant payment was increased by about 10 per cent per month. These changes were made in order to give students an impetus to study quicker.

3. Student admission reform
The higher education institutions’ student admission reform has been ongoing since the year 2008. The first part of the reform has been approved in the parliament and the legislation and new admission systems are used for the first time in the autumn of 2014. Universities can set a quota for those who do not have a study place or a degree from a higher education institution in Finland.
The second part of the reform makes the quota mandatory from 2016 onwards. The aim of the reform is to get the fresh graduates from upper secondary schools faster to university studies.

4. Reform of universities of applied sciences
The universities of applied sciences were founded on a network of previous secondary school networks. The purposefulness of the network has not answered to the needs and composition of today’s society.

According to the Finnish Government Programme, the responsibility for the funding of universities of applied sciences as a whole will be transferred to the government and those institutions will be made independent legal entities. The licence provided to education at universities of applied sciences will be revised, with emphasis on the quality and impact of the core purposes of their activities. These include education, supporting the individuals’ development, research, innovation and development activities, as well as promoting lifelong learning and adult education. Units of universities of applied sciences will be combined into innovative, high-standard competence environments, size reflecting the needs of the region they are placed at. There will be one or more university of applied sciences in every province.

In 2013, the reform was half way. The second stage of the legislation is being prepared by the Ministry of Education and Culture. The structural changes are ongoing—universities of applied sciences have cut staff numbers and closed down smaller units. The effects on employability are unclear. The aim is to have bigger units at universities of applied sciences with more study choices and broader support services to students. This in return should contribute to providing a better set of skills and competences.

5. Cuts in the financing of higher education
In connection to the government’s need to stabilise the state budget, the funding of both higher education sectors has been cut. The budget of universities of applied sciences has been cut by almost 20 per cent during 2012 and 2013. Some of this has been compensated by also cutting study places. The universities’ funding is tied to the University Index that provides steady increases in funding aligned to inflation. The index was frozen in 2012 and 2013 thus forcing the universities to cut staff costs.

6. Changes to study places
In connection to the budget cuts and the reform of universities of applied sciences, the study places have been cut by about 2,000 since the beginning of the year 2013. The cuts were made in areas that foresaw a high influx of graduates. This measure might improve graduates’ employment possibilities in the long run.

In the autumn 2013, the government revealed its plan to add study places in some fields. The aim of this measure is to make the admission to higher education quicker and possibly make youth unemployment figures smaller. The government has planned to allocate additional funds for the time period from 2015 to 2020 in order to finance the study places, but at the moment there have no decisions been taken as to what study fields should receive the additional places.

7. Study times
Both the university sectors’ legislations concerning study times are changing. The legislations will be introduced to the parliament in the spring of 2014. The government wants to shorten the study times further by limiting students’ possibilities to take a break from their studies.

Conclusions and discussions

One of the main motivations to the majority of the reforms is to have the students graduating faster. This includes the financing framework, admissions’ reform, restricted study time, adding study places and changes to the grant system. Over time it will be possible to tell how all the changes will affect graduates’ skills and competences, employability and employment.

The new financing frameworks are designed to shorten study times in higher education. The small share of financing based on the quality of education is an issue of concern, as it is the quality of education that affects the students’ study outcomes in the end. It can be claimed that a quick graduation does not provide the necessary skills and experience to find employment according to one’s wishes following graduation. Many employers say that they would be wary of employing somebody without any work experience in the respective field or without any experience at all. Since a lack of experience is one of the biggest barriers in finding work among fresh graduates and employers hardly employ people without prior experience, it can be assumed that the reform would decrease the chances of graduates finding work that matches their qualification as quickly as they do nowadays.

Despite the fact that Finnish students take longer time to graduate on average, they are amongst the fastest to find employmentrelevant to their own field of studies, precisely due to the work experience they get during the studies. Hence, it does not make sense to speed up the study times as the outcome of finding employment is likely to be affected.

Cuts to the financing of higher education does certainly affect the quality of education and limit available study possibilities, thus affecting graduates’ employability. It is hotly debated nowadays how wise it is to add study places, as this is only done in fields that are cost efficient, such as economics or law. This might affect some fields’ employment possibilities and also employability negatively if students are made to compete for certain positions without actually having any more need for a larger number of these professionals.

It is controversial to have an indicator for quality employment of graduates as part of the financing system in higher education. It has been welcomed by students as it could incentivise higher education institutions to pay attention to prepare students for the working life. On the other hand, measuring quality employment is difficult, as there is not an agreement on whether the work should be within the corresponding field of studies or not.

Cooperation between the working life and higher education institutions is seen from rather different perspectives among the stakeholders in question. The university sector says that the demand of the employers are often too field specific and tied to the current situation, whereas it would be in the interest of higher education to prepare the students with competences that will be needed in the future labour market. The ministry of employment sees that there should be more flexibility from the side of the higher education institutions, and they should be more willing to stay on top of the demands of the labour market, knowing the needs of the companies and having closer connections to the working life.

Danish case study

Background information on the education system

In Denmark there are approximately 260.000 students in higher education. Out of these there are approximately 150.000 university students at eight universities. All higher education institutions are public and have no tuition fees, except for students outside the eu. Higher education programmes are categorised by length and each category has its own legislation:

  • Short higher education: 2–3 years. E.g. some types of economics/trade studies, some types of ict studies or technical studies and some types of art studies.
  • Medium higher education: 3–4 years. E.g. nurses, pedagogues, primary school teachers and some kinds of engineers (profLong higher educationessional Bachelors).
  • Long higher education: Most of the university degrees fit the Bologna model with a three year Bachelor’s programme followed by a two year Master’s programme. This category includes everything from liberal arts to social sciences to natural sciences and some kinds of engineers.

There are two distinct kinds of Bachelor’s degrees that have different legal frameworks: Professional Bachelors and academic Bachelors. The professional Bachelors aim directly at specific job types and hence the curriculum design is aimed at giving the students employability within this field. The academic Bachelors on the contrary aim at preparing the students for admission to Master’s studies and do not aim directly at a specific job type. There are approximately 80,000 students enrolled in Bachelor’s programmes. Out of those, just fewer than 30,000 students are in professional Bachelor’s programmes.

Admission: It is decided locally how many students should be admitted to a university. Some of the admission is based purely on grades, while admission for other study places may be based on interviews at specific faculties, work experience and/or letters of motivation. While the admission is currently up to each university to decide, this may be changing in the future, as there are political suggestions to make centralised admission coordination, where labour market demands and the employment rates of the graduates would be taken into account when deciding on the amount of admitted students. Students oppose this suggestion and would prefer the competency to make decisions about admission to be kept locally. The disagreement is mainly a consequence of the students not accepting the discourse of the instrumentalisation of higher education.

Current situation with regards to employment

Employment rates: The figure shows the employment rate of graduates with a Master’s degree (green line) and Bachelor’s (blue line). The first axis represents the number of years since graduation.

The figures above show, that there is not very much academic work available for Bachelors compared to the work for Masters. A high percentage of Bachelors get jobs that are not related to their field of studies and many take jobs that do not require those skills they have acquired. This makes sense, as the academic Bachelor’s degree is not designed in order to prepare people for the labour market, but rather for enrolling them onto a Master’s programme. There is a law stating that people holding a Bachelor’s degree have the right to start the Master’s programme, if they start right after finishing the Bachelor’s programme. This law is a hotly debated issue—some suggest that this should be removed and the amount of Master’s studies limited while at the same time changing the Bachelor’s degree to be more narrowly focused on the labour market’s demands, while others (including students) rather support expanding this right by giving the Bachelors the possibility of enrolling onto a Master’s programme three or five years after finishing the Bachelor’s programme.

Reforms or other changes affecting employability

Image In 2013, two major higher education reforms were passed by the Danish parliament: the so called ›study-progress‹ reform and a reform of the grant system. These two reforms are connected and have the same goal: getting the students faster, cheaper and more efficiently through their education to increase the supply of graduates to the labour market. The focus of the reforms has been strictly on the supply of graduates so that the potential effects on quality of education and employability of students have been disregarded, which has been major point of critique point among many stakeholders. The study progress reform dictates that all students have to enrol for 30 new ects-points each semester, no matter if the student has failed exams in the previous semester. This means if a student fails an exam he/she will have to study more than 30 ects on the next semester. It also means that students cannot choose to enrol for fewer ects-credits to make time for a student job or other activities. If a student gets more than 30 ects delayed in his/her studies, the grant will be stopped until the student »catches up« with the delay by studying more than 30 ects per semester. Furthermore a strong economic incentive for the universities to decrease the average study duration has been created by linking some of the current funding directly to institution-specific goals of decreasing average study duration- if the students do not graduate faster, the universities will be financially punished.

Aims of the reforms

The reason for the reform of the grant system and for the study progress reform is to give students and universities an incitement to finish their degrees faster. This aims at providing a larger amount of skilled workers faster than if the students finish their studies at the current rate. The reforms do not aim at making the individual student more employable or more competent, but aim at having a higher quantity of graduates available for the labour market. This is a part of the government’s strategy for creating a »knowledge society« where there is an ambition to have 95 per cent of the population achieving secondary education, 60 per cent achieving some form of higher education and 25 per cent achieving longer higher education (Master’s degree).

Reform of the law on accreditation

In 2013 the law about accreditation of higher education was changed. Accreditation of programs was replaced with accreditation of institutions, a change which was welcomed by students as well as universities. In addition to this, however, there was a change in the procedure for opening new HE programs. Previously the programs only had to be approved by the Accreditation Council (the independent body responsible for HE accreditation) but now the Minister has to »pre-qualify« each new program by the criteria of whether it is both relevant for the labor market and different enough from existing programs at the institution as well as on other institutions. This change essentially makes it a ministerial political decision, which courses are relevant enough to be taught at the universities, and what kind of graduates should be provided to the labor market. Students were critical towards this change and would have rather kept the competence in an independent body. The minister is also responsible for the concrete criteria for accreditation in the executive orders under the accreditation law. At the moment much emphasis is put on the criteria of relevance for the labor market. An institution wishing to open a new program must be able to show the existence of relevant employers for the graduates of that program. The employers are put into a panel that must be consulted regularly for discussions about the development of the education. In order for the next accreditation to be passed, there must be a documentable dialogue between the HE institution, the employers of graduates and the alumni. This aims to ensure the continued relevance of the program and ideally to keep the graduates employable. These criteria are not new, but lately a lot more political focus has been put on them compared to other accreditation criteria (research basis, depth of learning outcomes, structure of programs). And with the new rules about pre-qualification, the political focus is potentially important. The reform does not directly influence graduate employability, but it puts a lot of power in the hands of the minister, as his/her interpretation of employability can determine, which courses are allowed to be taught, and which are deemed irrelevant to the labor market.

The current law and executive orders can be found on: https://www.retsinformation.dk/Form/R0710.aspx?id=151871(external link)

Conclusions and discussions

The reform has been massively criticised by students, universities and business organisations for reducing the flexibility of education and for risking a major negative influence on the employability of students. These stakeholders perceive the effects of the reforms on employability to be:
  • Increased structural and financial pressure to study faster that will decrease the students’ deep immersion in their studies. More focus on passing exams quickly and less on a deep learning process will give the students poorer transversal skills which will in hand decrease their employability.
  • Decreased flexibility in the education system and grant system that will presqqsure students to choose not to work or do other activities while studying. They will therefore not get the experience that affects employability positively, which they would otherwise have gained. Today, a very important aspect of many students’ preparation for the labour market is to have a student job and/or work placements. They give the students work experience and possibilities to use their knowledge and abilities in a more practical way. Also, it helps for the student to get an insight into the labour market’s function as well as a personal insight in their own skills, which helps the student in their future career choices. Furthermore, student jobs give the student connections and networks that are crucial in the search for a permanent job after finishing an education degree. In addition to student work, a very important aspect of employability in Denmark is when students make their own activities besides their studies, for example volunteer work, innovative projects, research projects, start-up companies etc. These activities improve the students’ ability to work independently and to use the knowledge and abilities in a more practical and/or innovative way. It also gives the student a useful experience and connections. But with the increased pressure for students to finish their education quickly there will not be time for as many activities besides studying, which will decrease their employability.
  • The rules in the study progress reform also make it more risky to choose to stay abroad during one’s studies. This is because of the risk of not earning enough ects-credits in a semester abroad that can be due to a difference in semester culture, to mention an example. This is expected to have a negative influence on employability, since studying abroad plays an important role for improving students’ intercultural competences and networks that are useful on the labour market as well as in other aspects of life. It can also have the consequence that students will be forced to accept ects-credits for courses that were either on a too low level or had a too large overlap with another course to normally be accepted, in order to avoid falling behind and losing their grants.
  • The economic incentive for the universities to bring down the average study duration may create a pressure to let students pass courses more easily. This is a problem for the level of academic knowledge and skills of the students, which will make them less employable.

Hungarian case study

Country background

There are 315,000 students in higher education in Hungary. The higher education sector is composed of 66 higher education institutions and 28 state higher education institutions. In addition, 38 higher education institutions are run by foundations and clerical institutions.

Current situation

Hungary committed itself to reach a 30.4 per cent higher education attainment among the 25 to 34 year olds till 2020. The ratio of people with higher educational qualification among the population above age 25 was higher than 20 per cent in 2010 in Hungary; however this result is still lower than the 24 per cent average of the eu27. High enrolment results in 2011 in Hungary also serve the Europe 2020 target to reach a 40 per cent ratio of people with higher educational degree within the group of 25 to 34 year olds.

As the economic crisis had a deep impact on economically vulnerable countries, youth unemployment increase in every Member State of the eu. Hungary is among the worst performers with the rate of 28 per cent unemployment among young people between the age of 15 and 24. The overall unemployment rate in Hungary (January 2014, age 15–74) is 8.9 per cent whereas the unemployment rate of new graduates is 6 per cent.
When it comes to the differences between educational attainments, the unemployment rate is 20 per cent among people with basic level of education, 10 per cent if the person has secondary educational degree and it is below 5 per cent for people with a higher educational qualification.

Hungary performs well in an international comparison in terms of unemployment among people with a diploma in higher education. As the overall level of educational qualification gets higher, the unemployment rate is decreased to half of what it would be with a lower educational level.


Cooperation with the third sector

The government is encouraging corporations to take a bigger role in the financing of higher education. In general, all forms of practice oriented education possibilities are welcomed by all stakeholders. However, the mandatory summer internships often mean a challenge for the companies. According to the new regulation, for an internship that lasts more than six weeks, the working student is eligible to receive a wage, which is a desired goal and for the benefit of the student. But many companies agree to pay a salary only if they commit themselves to have an intern for a much longer period than six weeks (a minimum of three months). Therefore, it happens that certain corporations do not accept or employ students for only a short-term practice period.

Various companies cooperate closely with the career offices of the higher education institutions by channelling their expectations of the future needs in terms of skills and required practices. Job fares are organised at all main universities in Budapest and bigger academic cities of Hungary on a quarterly or half year basis where students, who soon graduate, can see the exact positions that are open. The Ministry of Human Resources also launched a similar expo programme to show the graduates what the public sector can offer as career opportunity to them.

Changes and reforms affecting students employability

1. Changes in financing the education sector
In the past years, many big changes occurred in the Hungarian higher education system. Due to the economic crisis, from 2009 the funding of higher education has been decreasing year by year. These austerity measures were stricter than what would result from the fewer number of students due to demographic tendencies. This decrease came to a stop in 2014 and the amount of funding for higher education has somewhat increased compared to 2013, but is still lower than the gdp-proportional average value of the OECD which is 1–1.2 per cent. The Hungarian government has also recommended that higher education institutions enhance their own profitability and competitive advantages to generate higher income.

2. A new law on vocational, public and higher education
Due to the new law on higher education, many changes occurred to the students’ performance requirements. These include restrictions to the possible number of exams in a given subject, completion of minimum thirty credits per semester and as a state financed student the educational period cannot be prolonged more than two semesters. The aim of all the changes is to enhance quality and therefore empower students to complete their education in time and enter the labour market as soon as possible.

3. The new labour code
Public responses and opinions are still ambivalent regarding the Labour Code that was codified at the end of 2012. The main goal of the code is to increase the employment rates, and make the labour code more flexible in addition to enhancing competitiveness and the expansion of employment. The fact that a new Labour Code was accepted is positive itself, since the Code from 1992 was at various points outdated and anachronistic. The new law is closer to the realistic conditions and unquestionably adapts better to the new trends of international labour law. The new Hungarian Labour Code satisfies the expectations of flexibility and the guidelines set in the eu Green Paper on modernisation of labour law.

4. Scarce professionals
Certain fields of work have faced a lack of professionals in the recent years. As a result, enhanced support was included in the law for students studying in these specific fields, such as the engineering and the IT-sector, in order to fulfil the demands of the labour market. Geographically there is high demand amongst these scarce professions, as the lack may be even greater in specific counties of Hungary, therefore resulting in more work opportunities in those regions.

5. Labour market connections
Wrong perceptions still persist in that there is a surplus of graduates and graduate unemployment would be high in Hungary. In fact, in international comparisons, for the individual and for the society, the return on investment in higher education is notably high.

In 2012, the assumed and real connections between higher education and the labour market was a popular topic in the government’s communication and media. Unfortunately, these communications did not refer to the research results and data surveys about the labour market, conducted by the Central Statistics Office (ksh) and the Hungarian Academy of Sciences. There was no quality and in-depth response to any of the professional papers and articles on this topic. The oecd statistics and Eurostat data also indicate that in the states of Central-Eastern Europe, investment in education have a higher return than in Western Europe. Studying and gaining a diploma results in higher wages. While in oecd countries, people with higher educational qualification earn 50 per cent more than employees with only a secondary school degree, in Hungary the difference is double.

Conclusions and discussions

Fine-tuning and the review of certain higher educational programmes, trade groups, and institutional structures, turned unavoidable in the recent years. The centralised reforms, driven mostly by fiscal factors, lack a meaningful involvement of local economic stakeholders. The ad hoc governmental declarations in 2012, that were lacking impact surveys and reasonable, professionally constructed medium and long term concepts, did not improve neither the situation of the moderate number of unemployed graduates, nor of the chances of finding a job matching the respective field of studies. The above mentioned facts indicate that youth unemployment and the issues within the system of higher education have no direct connection. The components of the problems are rooted in the primary and secondary levels but especially in the system of vocational trainings. Demand-oriented planning is supposed to be performed with the active involvement of economy stakeholders, and this dual German model will hopefully be successfully applied in Hungary as well.

As for the real causes: there is a lack of central career orientation activities before the entry in tertiary education, the territorial mobility of unemployed people is low, the regulation about the usage of working time lacks proportionality and above average participation in atypical forms of employment. It is important to mention the problem where the rising age limit of retirement is making it even more challenging for young people to enter the labour market. The most important component on the labour market is the lack of professional experience. This is still not solved in the new higher educational regulation; as the efficiency of mandatory professional internships is questionable. These are the substantive components that require immediate actions from the government.

The announced support programmes for youth, the first workplace guarantee and the increase in the wage minimum of skilled workers are steps in a good direction. Hopefully, major impacts will be experienced due to the Youth Guarantee Programme launched by the eu and other supplementary actions.

HÖOK states that according to recent statistics, the unemployment rate among graduates with a higher education degree is lower than the average value. höok also disagrees that graduates of social sciences and humanities would represent a higher number among unemployed citizens. The primary beneficiary of higher education (among others) must be the student, as all individuals are responsible for their own career planning as lifelong learning is a clear reality. The needs of the labour market may change rapidly and the institutional structure of higher education is too rigid and adapts slowly, therefore only a long term strategic planning makes sense in the state’s policy for higher education.

HÖOK acknowledges that on a certain level, the ratio between the number of state financed students and the demand of the labour market needs to be harmonised. However, höok strongly opposes rapid and drastic changes because the structure of higher education is not able to adapt so quickly. höok agrees that certain study programmes in the recent years released too many graduates to the labour market, though each generation deserves the right for its talents to study in the chosen field without being charged for it. höok also agrees with the current system, that the top performers will be state financed and the lower performing students will pay a contribution, a kind of tuition fee, because there is a permeability between the two financing categories (Meaning that those students are able to continue their studies financed by the state that started as self-financed ones if they finish the semester with excellent results). höok states that the data in the Graduate Career Tracking Frameworks (Diplomás Pályakövető Rendszer) are a good basis for planning the state financed quotas in the various study programmes.

On the unemployment of graduates
Unemployment among graduates with higher education degrees is considerably lower than the average national unemployment rate. This trend is not changing, despite of the fact that the number of young people starting higher educational studies multiplied in the last decades.

The distribution in terms of age of the unemployed people in Hungary is malformed according to statistics. The result of a youth survey based on a big sample is well known: a fresh higher education graduate is likely to find a job within three months. Therefore, it is important to differentiate between getting a job in the fields matching with the study background of the individual and the general entry to the labour market, which has proven to be easier with a qualification from higher education. Institutional Career Tracking Systems of Graduates do not prove the drop-out or ›got stuck‹ results that the Hungarian government uses.

After years of decreasing and then stagnating economic growth, there is a slight increase observed that can be advantageous for the employment rates of the young in 2014. The goal of the new Labour Code, recently put into force, was to make more employment opportunities and make them more flexible. However, it has not resulted itself in new workplaces and better circumstances for the young labour force. The centralised support systems were more effective (first job guarantee programme), because they decreased the growing unemployment of young people. The drain brain and the emigration of young tends to be an increasing problem, therefore the government is trying to improve the situation with career models in several work fields (the effect of an open labour market is significant nowadays). This tendency is lower and the unemployment rates less critical in case of those young people that have university degrees.

Stakeholders' views
The Hungarian government is aware of the fact that the youth unemployment rate is relatively high among graduates with higher education degrees. According to the government, the reason behind this is that natural sciences and technical fields are underrepresented, while faculties of humanities and social sciences release too many graduates into the labour market without being able to find work. Therefore, the structure of institutions, academic specialisations and the fields of studies need to be rebuilt at the national level. State subsidies and support must necessarily focus on enhancing the preferred and currently underrepresented branches of technical and natural sciences.

The Chamber of Industry has a clear view that the customer or buyer of higher education is not the student but the labour market, industry, companies and corporations. Therefore, the demand needs to generate the supply and indicate what fields should gain more state support in terms of state-financed student quotas and subsidies. The Chamber of Industry intends to take an active part in the consultation, in the planning and preparation phase of such financial decisions made by the government, in order to reach a balanced demand and supply for the labour market.

The Chamber of Industry strongly believes that practice oriented (dualist) study programmes (German model) should be on the Bachelor’s level of higher education. Such study programmes at the Bachelor’s level have grounds only where enterprises directly need specifically qualified technicians in their high volume production capacities. Those enterprises should be willing and capable of organising the required practical internships for the students. Further research is needed in order to differentiate the practice oriented dual certification of Bachelor of Engineering (BEng) from the more theoretical Bachelor of Science programmes. However, there is a potential threat that the graduating engineers would be specified in a narrow field, a need of a certain company and they do not possess the wider, in-depth engineering knowledge that would be expected at other corporations. Therefore, students from BEng programmes coming from the dualist programme would have lower chances of finding employment, they would be less flexible employees for changes and connect too closely to the profile of a given company.

Spanish case study


Higher education system
Spain has 82 universities, 50 public and 32 private. From all those, 6 are online universities. In total, there are 1,561,123 students in the Spanish higher education system, 1,046,570 are studying a ›Bologna‹ degree, 403,466 are studying »pre-Bologna« degrees and 111.087 are studying a master.1 In this complex system, education competences have been transferred to the autonomic governments, so technically there are 17 different education systems. Nevertheless, there are national laws which regulate the different systems with the aim to homogenize education among the country.

When referring to ›Pre-Bologna‹ degrees, we refer to the system before the Bologna Process was implemented. Spain went from a cycle system where there were two cycles, a short three year cycle and a long 5 year cycle, to a 240 ects degree (4 years). There are some exceptions such as medicine, architecture, and teaching. Masters are structured to be 60 to 120 ects (one or two years).

In 2011, Spain got to be the first country in Europe to have a national law named »The University Students’ Statute«2 where students’ rights where cited. This law, not only deals with students’ rights, but a national body has been established by the minister of education to make student participation in the policy making of higher education official.

Image There are three ways of accessing Higher Education (HE) in Spain:
  1. University Access Exams: there are autonomic access exams which are comparable at a national level. Students get an average grade based on their high school grades and the grade obtained in their access exam. Once they apply to a higher education institution, they will get selected by their grades which will be valid in any university in the country.
  2. Vocation Training (VT):there is a quota established for students accessing from a vocation training study. In this case, these students will access with the average grade of their vt.
  3. Graduated students: students who have already entered once, the higher education system and want to study again. The debate here is whether the state should pay for the cost of a second degree, or, on the other hand, they should pay the complete cost of their studies because they already have a qualification/degree.
Despite the advances of the last decade, Spain remains among the countries where the population has reached a level of education which does not exceed the first stage of secondary education (46% of the adult population), a figure that differs significantly from the average of the eu27 (24%) and the OECD (25%).

In Spain, 14.1% of the adult population has passed upper secondary education, while 8.4% has conducted a middle level vocational training program; both very small percentages of the adult population. In total, only 22.5% has passed the second stage of secondary and post-secondary (non- tertiary) education, a figure below the OECD average (45.9%).

Image When looking at higher education, 53% of young adults accessed higher education. There has been an increasing tendency since 2008 explained by the crisis starting in 2008, delaying the entrance of many young adults to the labour market and extending their training period. At the same time, the length of study programs has decreased as a result of the Bologna Process, motivating students to study. Finally, there has been an increase in the population that finishes upper secondary education.

Image Image In 2011, the rate of access to tertiary education of type B (in Spain, referred to high level vocation training programs) reaches 28% , higher than the OECD average (19%) and EU27 (15%). Vocational training has become an option for the unemployed.

The Spanish public higher education system is financed 75–80% by public funds and 20–25% by private funds. Spain invests around 4.7% of its GDP in its education system, much lower than the OECD average of 5.3%. Until 2008, the Spanish government had been increasing the investment in education, especially in higher education. After 2008, budget cuts were implemented and education was cut tremendously in addition to facing other measures such as a high increase in tuition fees, a political change in the perception of grants and a delay in the governmental payments to the institutions. This led to a controversial situation in institutions with increasing debts, staff whose contracts could not be renewed or promoted and education equipment had to be reduced, along with other budget reductions.

Image Public investment in education as a percentage of the total public expenditure in Spain in 2010 represents 10.9%, lower than the oecd countries (13%) and the eu27 countries (11.4%). At the same time, investment in education institutions in tertiary education in Spain in 2010 represented 1.3%, similar to that of the EU27 countries (1.4%), but below the average recorded in the oecd countries (1.6%).

Higher education institutions have three ways of financing themselves:
  1. Public grant: more than 75% of their budgets. This percentage varies according to the annual budgets from the national and autonomic governments, meaning heis do not know the amount of money they will receive in the future years. At the same time, this amount of money will be determined by different objective parameters related with research and the teaching; such as number of students and their dedication weighting the experimentality of the study field, academic achievement, number of graduates, number of thesis, scientific production, attraction of competitive funds, patents produced, etc. These are what is known as competitive resources. As they have to be distributed among all the hei, the heis compete among themselves.
  2. Tuition fees: around 20%. The revenue achieved from tuition fees are forwarded directly to the state funds, which makes the university lose control of such income. Theoretically, this revenue is returned through public subsidy.
  3. Other: Other sources of income are finalist revenue services to students, staff or external users. These are services that are not part of the core activities of the university (teaching, research and knowledge transfer) and have activities intended to generate support as a part of the self-financing regime.

The financial magnitude of research and knowledge transfer in the Spanish university is variable. The polytechnics (Catalonia, Valencia and Madrid) with a fundraising around 20–25% of total revenues of the university stand out. In non-technical universities with research-intensive character but this proportion is around Image 15 -20% on average.

The scholarship scheme was based on equal opportunities and was offered to families with lower income, to gain access to higher education. These scholarships cover the tuition fees, accommodation, complimentary services and meals. It is understood as a salary scholarship.

Tuition fees
Image Image To be able to understand how tuition fees have developed during the past years, there are two factors at policy level that need to be taken into account. On the one hand, decentralisation of competences in university matters have derived in an inequality of the levels of tuition fees between autonomic regions and it seems to increase somewhat over time. On the other hand, in 2012–13, a new system for defining the level of fees in the public system was implemented which allows the tuition fees to be set in the real cost of education. From the students’ and rectors perspective, this decision was unfortunate because the real price of the cost of education has not yet been calculated.

Image Image At the moment, students’ pay around 20–25% of what was estimated »the real costs of education«. Aside from these prices, when students re-register for a course for a second or third time, fees increase dramatically, doubling or tripling the initial amount paid.

During the past years, the general unemployment rate has been the first concern of the Spanish population, especially the youth unemployment which has reached a rate of over 57% of people under 25 years old being Image unemployed. The government has implemented many measures and reforms specifically tackling the youth unemployment that exploded since 2008 but not much has been achieved so far. Currently, Spain is facing a 53.9% of youth unemployment rate and a 25.3% of total unemployment.

Structural weaknesses of youth employment:
  • High school dropout rate, which doubles the values of the EU27.
  • Strong polarization of the labour market, where there are low-skilled potential workers and highly qualified potential workers which are underemployed.
  • Low relative weight of the vocational training level.
  • Low employability of young people, especially regarding the knowledge of foreign languages.
  • High levels of temporary work, with 82.3% of young people working temporarily involuntarily.
  • High numbers of part-time work offered, with 51% of young people working part-time, waiting to sign a full time contract.
  • Difficult access to the labour market of groups at risk of social exclusion.
  • Need to improve levels of self-employment and entrepreneurship among young people.

What has been demonstrated is that the population aged between 25 to 64 years old with a higher level of education has a higher employment rate and a higher salary level. This is the same for Spain, the OECD and the EU27.

Image With this situation, the Spanish government has designed a youth employment strategy 2013–16 which has four main objectives:

  1. Contribute to improving the employability of young people.
  2. Increase the quality and stability of youth employment.
  3. Promote equal opportunities.
  4. Encourage entrepreneurship.

Included in these objectives, there are specific measures which will affect education:

  • Extended training programmes for obtaining professional certificates and commitment to training programmes recruitment. The Public Employment Services will offer specific training programs and placements for youth under 30 years old directed to obtaining occupational certificates or professional modules and include hiring commitment.
  • Development of incentives for unemployed early school leavers to obtain a secondary education by promoting, together with the autonomous regions, a program for the low-skilled unemployed youth. This will enable the target group to voluntarily resume and enhance their training in order to expand their access to the labour market.

Reforms affecting employability

In 2012, the Ministry of Education created a committee of experts composed only by teachers, which, in their opinion, represented the hei community and had knowledge about governance, financing and research of he for debating and studying a future reform of higher education institutions. After some months, this commission came up with a document which was called: »Proposals for the Reform and Improvement of Quality and Efficiency Spanish University System«.

  1. Restructure the offer of the higher education system adapting it the demands of the labour market in future years as well as considering the study fields and the demands from students in the past. This will have to be done also with the autonomous regional governments and taking into consideration strategically cultural interests.
  2. Implement measures to help some universities to be able to compete on an in ternational level such as a more selective admission and a better financing.
  3. Transparency in the finances and the quality results of higher education institutions.
  4. Implementation of analytic accountability so that the real costs of he can be calculated.
  5. Invest a 3% of Spain’s GDP in higher education.
  6. Increase to a 20–25% the public financing related with the higher education in puts (research results and teaching services).
  7. Establish perennial financing strategies to facilitate higher education institutions in their policies on financing and fundraising.
  8. Add employability of graduates as a variable in the public grant that higher education institutions receive.
  9. Establish new standards of permanence and progress for students to optimise resources.
  10. Increase private investment especially for research projects.
  11. Increase public investment in grants as well as create a stable, solid and easy grant system.
  12. Promote national and international mobility grants.
  13. Promote the partial time students to able them to work while they study.
  14. Increase the companies’ presence in the universities.

In 2013, the Spanish government modified the law that regulated national grants. In the new grant system, major changes were done. Up until 2013, grants were understood as a tool, a way of guaranteeing equal opportunities for accessing higher education. With the new grant system, a political change in the perception on the need for grants will be implemented.

To obtain a grant, students have to fulfil the academic and economic requirements at the same time. The criteria that have been changed include:
  • Academic requirements have been introduced to be able to get a grant affecting access and progression in he. For students entering higher education, they will not be granted if their access grade is not equal or greater than a 5.5. Students in higher courses will be required a 6.5 average if they do not pass all their courses, or a 5 if they do.
  • Economic requirements are maintained or reduced. The grant consists of two parts, a fixed part which varies according to each income threshold and which would correspond to students who fall under the different economic ranges based on the family’s income. The second part is calculated by an equation which cannot be estimated unless you know how many students have received the grant that year and the amount each of them has received because it depends on the amount of money left.

In conclusion, students are not able to calculate the amount of the grant they will receive and the administration takes double the time to process, calculate, solve and pay the students. As a result, if a student doesn’t get a grant, it is too late to think of another alternative solution for financing the studies.

Mobility grants have also been reduced. National mobility grants have been eliminated and even the Erasmus grants were going to be eliminated. Finally, with the Erasmus+ program and society’s pressure, international mobility grants remained but conditions have changed. Students could get grants for a mobility program from the Ministry of Education, from the European Commission and from their autonomic government and any private grant. Now, the grant from the Ministry of Education can just be requested by students who have previously obtained the general education grant from the state and if they decide to choose this grant, they will not get the EU grant. The EU grant will just be for students which do not have the general education grant. On general terms, a number of grants have been reduced.

In 2013 the Ministry of Education approved a law called »Organic Law for improving the Quality of Education«. This law focused on primary and secondary education but it also included vocational training and access to higher education. The new access will consist of an evaluation exam of the non-obligatory secondary education which will determine if you pass of not that cycle and have access to higher education. Aside from this, there are no more general examinations. Institutions can establish, if they decide to, their own access conditions and evaluations for their students.

Spain has gone through two labour reforms in less than 5 years as a result of the need to implement measures to fight against the high unemployment rate installed for years. The first reform took place in 2010. Two years later, in 2012, another reform was approved. This last reform changed aspects such as recruitment rates and causes for ending contracts or working condition.

The objective reasons for employers to fire a worker have been widen and become more flexible so there is controversial and polemic with these reforms. Labour unions are constantly focusing on the unemployment data and the use if the different types of new contracts to be able to determine and justify the usefulness of these reforms. It is true that the number of people affiliated to the social security system has reduced and that unemployment has not gotten better, so this is an issue that the government will have to rethink sooner or later.

At the same time, the public employment services have been demonstrating that there are totally inefficient when searching for jobs. Right now, they are only controlling the unemployment benefits and registering unemployed people who need a subsidy. Sooner or later, this services will have to be modified and modernised. The government should increase the investment in this type of services as well as motivate and train the working force of these entities.

Nowadays, no one doubts about the influence in a graduate’s employability that internships have. It’s for this reason that in many degrees and masters, internships have become obligatory. The government, foreseeing this situation created a law to regulate internships. This reform made optional retribution for students for their internships as well as made optional for institutions to have insurance for internships. It also regulated tutors and stated that students don’t have to trade on the social security to be able to access unemployment benefits.

Conclusions and discussions

The overview of the situation is optimistic economically speaking. On the other side, reforms in the labour market regulations, education system and grants system are not very optimistic for students and graduates.
Society knows and agrees that changes have to be done in the hei financing. An exercise of transparency has to be done to show how valuable and efficient heis are. From the students’ perspective, institutions have to look for more diverse fundraising while keeping in mind that education is a public good and as such, it has to be maintained by the government. Rectors and students both agree on having a multiannual financing strategy to force the administrations to pay the grants on time and create stability in the institutions’ budgets; or at least, inform the heis in advance of the resources they can count on to plan their strategy and activities more efficiently.

There is also a general fear about the opening of so many private universities and a debate on whether a university should depend more on private investment, consisting of enterprises’ money and tuition fees paid by families and students, and which are going to be the variables the governments will look at when allocating the different public grants to institutions. The government follows the ideas of competence between students and institutions, excellence of both of them and efficiency in the management of universities.

An equal and fair access is as important as a good grant system. Accessing higher education is the first step to increasing someone’s employability. With the actual reform, there are too many unanswered questions that are key for achieving it. Autonomy for institutions is great and essential, but guaranteeing fair access conditions should be prioritized. Students are very concerned with how this reform will be implemented and rectors are trying to reach an agreement to guarantee it. At the same time, students and rectors demand a paralysation of the price of tuition fees as they are one of the main factors for students to drop out from university.

Grants should follow the principle of ›equal opportunities‹. Students demand the Ministry of Education to use the National Observatory for University Scholarships, Study Grants and Academic Performance which was created to study in depth the consequences and needs of students in using the grants to what is really needed such as transport, accommodation, food and fees. Students also defend the idea that if excellence is to be promoted, then, there should be other types of grants created as the actual grants were meant to defend the right for education and the equal opportunities of people. While living costs have increased, grants have decreased and fees have also dramatically increased in some regions, affecting the access and successful completion of studies of thousands of students, as the National Rectors Conference have stated in several occasions.

With a good grant system, access to higher education is more attainable for any individual in society. Education guarantees a better and bigger opportunity to get employed. Employability of an individual increases as he/she progresses in the education system. With this proved, early school dropout has to be fought. The Ministry of Education has proposed in his last education reform an advancement of the age to enter vocation training because he believes that promoting vocation training may be one of the long term solutions to decrease youth unemployment due to the fact that most of the graduates get under qualified jobs. This also leads to the idea that has been introduced about the amount of university graduates, the amount of students accessing the different study fields and if this should follow the demands of the labour market. Academics, rectors and students agree that universities can’t follow the demands of the labour market because it is no predictable itself and that university has also social objectives.

Nevertheless, unemployment can’t just be fought by changing the labour market, the labour system or the education system, but has to be an integral reform of different aspects of a society. Labour unions have hardly criticized and fought against the two recent labour reforms. They have proved by analysing statistics after the labour reforms were implemented and these were their results:
  • There is more precarious employment.
  • Wages have been reduced.
  • Seasonality of jobs has increased, especially for women.
  • Part-time contracts have increased.
  • Working conditions have gotten worse.
  • There are less skilled jobs.
  • Self-employment has increased.
  • There is less coverage of unemployment benefits.
  • Training contracts have increase.
  • In conclusion, the quality of employment has been reduced.

Internships have become the biggest option for higher education institutions to face unemployment, together with entrepreneurship. Students’ have demanded the Ministry of Education and the Ministry of Labour to change the regulation so that internships have retribution and assess for future unemployment benefits.

To give a global perspective of the whole situation, Spain has to look for creative solutions that maintain the equal opportunities at the same time as it solves the social and economic problems that the crisis has produced. Quality employment has to be created at the same time as education reaches all individuals remaining as a public good.

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