## 1nldea2021002 ## Source details **Canonical URL:** [1nldea2021002](https://www.imf.org/-/media/files/publications/cr/2021/english/1nldea2021002.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2021/english/1nldea2021002.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2021/english/1nldea2021002.pdf.json) --- ### Enrollment Rates — Introduction - Investing in education is important for growth and equity; human capital boosts productivity and economic growth and enhances robustness to shocks. - Less skilled and lower educated workers were the most affected by the economic impact of the Covid-19 pandemic. - Investment in education is expected to yield a "double dividend": at the macroeconomic level by supporting growth, and at the individual and societal level by supporting equality of opportunities. ### The State of Education — Participation and Outcomes - Enrollment and attainment - In 2019, 93 percent of Dutch aged 15–19 years old were enrolled in education, compared to 88 percent and 84 percent on average in the EU and OECD, respectively. - At least 90 percent of the Dutch population between 4 and 17 years old is enrolled in formal education (similar to EU and OECD averages) and this rate has remained stable over the past ten years. - Enrollment in early childhood education (pre-primary) declined in the Netherlands from 94 to 89 percent between 2010 and 2019, while the EU increased from 84 to 91 percent over the same period. - 80 percent of the Dutch population aged 25–34 years has at least upper secondary educational attainment, compared to 69 percent and 73 percent in the OECD and the EU, on average, respectively. - Among 25–34 year olds, 49 percent had a tertiary educational level in the Netherlands in 2019, compared to 44 percent in the EU; up from 40 percent in 2009. - In 2019 about 90 percent of students enrolled in general upper secondary education completed the program within the theoretical duration period plus 2 years; completion rate was below 80 percent for similar degrees in vocational education. - International test performance and trends - PISA reading scores fell below the OECD average in 2018; about ¼ of Dutch aged 15 were unable to read properly according to the 2018 PISA report. - Netherlands’ PISA reading rank went from 7th in 2003 to 21st in 2018 out of 37 countries with data. - Science: rank fell from 7th in 2003 to 10th in 2018. - Mathematics: Dutch performance broadly followed the declining trend of the rest of the OECD. - National versus international measures - The 2020 Netherlands Inspectorate for Education report suggests final test results in secondary education have remained broadly stable in recent years. - The 2021 State of Education report highlights marked deficiencies in reading and mathematics, especially in the first year of secondary education. - Disparities and inclusiveness - Pupils from lower income families consistently perform below average with no evidence of catching up in the past decade; gaps may have widened slightly recently, especially for pupils in the first quintile of the income distribution. - Pupils with "Western" migrant background perform broadly as well as Dutch natives; pupils with "Non-Western" migrant background perform comparatively poorly, though the gap has declined in recent years but remains large. - These disparities point to inclusiveness gaps and inequality of opportunity that may affect attainment beyond primary education and employment prospects. ### Education and the Labor Market - Employment and participation patterns - The Netherlands employment rate has been persistently above that of the EU and OECD and increased faster in the past fifteen years; only Iceland and Switzerland have employment rates exceeding that of the Netherlands. - In 2019, 42 percent of Dutch aged 18–24 were still in the education system while being employed; the largest proportion among OECD countries (OECD average: 17 percent). - 35 percent of this age group had exited the education system (compared to 47 and 43 percent in the OECD and EU average, respectively); 80 percent of those who exited are employed. - Netherlands has one of the lowest shares of NEET (not in education nor employed or in training). - Educational attainment in employment - Share of working age population with tertiary educational attainment is above EU average: 38 percent versus 35 percent. - Netherlands also has a higher share of employees with an education level below upper secondary education: 21 percent versus 16 percent in the EU. - Proportion of the upper secondary educational degree is below EU and OECD. - Potential skills mismatches - Health and welfare: largest share among upper secondary vocational graduates but declined from 27 percent in 2013 to 24 percent in 2019; employment in health and social services remained around 16 percent. - Services: employment declined slightly from 29 to 27 percent between 2013 and 2019, while graduates in services increased by about 1.5 percentage points to almost 23 percent in 2019. - Education sector: employment stable at about 7 percent while only 2 percent of graduates studied this field between 2013 and 2019. - Industry sector: employment stable at about 15 percent; graduates in engineering, manufacturing and construction about 18 percent. ### Investing in Education — Expenditure and Financing - Aggregate spending and composition - In 2017, total expenditure on education in the Netherlands amounted to about 5.2 percent of GDP, compared to 4.8 and 4.4 percent in the OECD and EU, respectively. - Higher expenditure is mainly driven by tertiary education: 1.7 percent of GDP in the Netherlands versus 1.4 and 1.3 percent in the OECD and EU, respectively. - Public expenditure on education represented about 12 percent of general government expenditure in 2019, up from 9 percent in 1995, and above OECD and EU averages. - More than 80 percent of spending on education is financed by public funds; private investment plays a relatively smaller role. - Trends in public expenditure and per-student spending - The ratio of public expenditure on education to GDP declined by about 10 percent over the past 10 years. - Declines were concentrated in pre-primary and primary education, while ratios remained somewhat stable in secondary and tertiary education. - The Netherlands has one of the lowest ratios of expenditure to GDP in pre-primary and primary education in the OECD. - In 2018: - Per-student government expenditure on education (in percent of GDP per capita) was significantly lower in primary education compared to the EU average. - Per-student public expenditure in tertiary education was larger than in the EU. - Per-student public expenditure in secondary education was very similar to the EU. - Household spending on education - Household expenditure on pre-primary and primary education has increased significantly in recent years, almost doubling as a ratio of GDP since 2012 compared to the decade before. - Household expenditure on education has been volatile, ranging from 0.4 to 0.7 percent of GDP in the past two decades; this volatility is primarily driven by expenditure on tertiary education. - Although household spending represents only a small share of the total, its rise in pre-primary and primary partially offsets lower government expenditure in those levels. - Efficiency of expenditure — methods - Efficiency assessment combines: - Data Envelope Analysis (DEA) using the IMF Expenditure Assessment Tool (EAT). - Statistical comparisons with peer countries using multiple outcome measures. - Education outcome dimensions considered: - Quantity: tertiary educational attainment. - Quality: PISA test scores (reading, mathematics, science). - Inclusiveness: inverse of young people NEET (not in education nor employed or in training). - Efficiency of expenditure — findings - DEA (2016 data) results: - The Netherlands performs among the top for primary enrollment relative to spending, located on the efficiency frontier for primary enrollment. - Secondary education shows inefficiencies: despite higher expenditure per student in secondary education, the enrollment rate is similar to OECD, EU, and advanced-economy averages; distance to the efficiency frontier indicates scope for improvement. - Alternative statistical analysis (lagging inputs by 5 years) indicates: - Tertiary education (quantity): the Netherlands shows comparatively strong performance — higher share of young people with tertiary attainment than the OECD average despite similar expenditure; however, countries such as Luxembourg, Lithuania, and Ireland achieved stronger outcomes while spending less. - Quality (PISA average across tests): the Netherlands stands above EU and OECD averages with lower education expenditure than OECD but higher than EU; however, reading scores are comparatively low relative to the sample. - Enrollment patterns: - Significantly lower enrollment rate in upper secondary education than EU and OECD. - Much higher enrollment rate in lower secondary education. - Out-of-school rate in lower secondary education: 2.5 percent in the Netherlands vs. 2 percent (OECD average) and 1.5 percent (EU average); Austria, U.K., and Spain have out-of-school rates below 0.5 percent. - Inclusiveness (inverse NEET): the Netherlands outperforms most countries, with one of the highest shares — 93 percent of 18–24-year-olds either in education, employed, or in training — compared to 85 percent average in the OECD, despite similar expenditure. - Pre-primary education specifics - The Netherlands has a lower enrollment rate of 3–5-year-olds compared to the EU average. - Early childhood enrollment has increased in most OECD countries over the past decade, with the Netherlands being an exception. - Lower expenditure in pre-primary education (one of the lowest in the OECD) is associated with the lower 3–5-year-old enrollment rate. - Top performers (nearly 100 percent enrollment rates, e.g., France, Ireland, and Israel) spend roughly twice as much as the Netherlands on pre-primary education. - Teaching staff, class sizes, and shadow education - The Netherlands has one of the highest student-to-teaching-staff ratios in primary and secondary education in the OECD. - In secondary education, the ratio was the fourth largest in the OECD in 2018. - The ratio of students to teaching staff is also above EU and OECD averages in pre-primary education. - These ratios have been stable over recent years, showing no signs of improvement. - Higher student-to-teacher ratios in the Netherlands are associated with higher prevalence of “shadow education” (after-school education support provided at household expense), which may increase inequality because such support is only available to households that can afford it. - Summary of performance - Strengths: - One of the highest enrollment rates of school-age population in the OECD. - Larger share of tertiary educated youth and employees than OECD and EU averages. - High inclusiveness by the inverse NEET measure. - Challenges: - Comparative performance in international tests has declined somewhat over the last 20 years. - Persistent differences in educational achievement among children from different socioeconomic groups. - Pre-primary and primary expenditure declines and low pre-primary enrollment. - High student-to-teacher ratios and related reliance on shadow education. - A “missing middle”: relatively high shares at tertiary and lower secondary attainment, but lower shares at upper secondary, and one of the highest proportions of lower-educated workers. ### Effects of the Covid-19 Pandemic on Education - School closures and distance learning - Containment measures included temporary school closures. - Early analyses (Engzell et al., 2020) suggest school closures caused learning losses among most pupils, especially the most vulnerable (e.g., from lower income households). - Pandemic risks exacerbating existing disparities - The most affected pupils were already lagging behind in educational outcomes, suggesting the pandemic could have exacerbated disparities. - School closures appear to have worsened teacher shortages, especially in the most disadvantaged schools. ### Teacher Shortage — Patterns, Causes, and Policy Options - Patterns and causes - Teacher shortage has been more acute in major cities in the Netherlands, especially in the Randstad. - The shortage is more prevalent in the most disadvantaged schools (those located in poorer regions of the country and with larger proportion of disadvantaged students). - The share of students in the field of education is significantly low compared to the share of employment in this sector, suggesting that, without policy interventions, the shortage will likely persist. - Anecdotal evidence suggests that costs of living and other external factors such as the cost of housing increase the shortage in large cities. - Medium-term policy options to ease shortage - Creating incentives to boost graduation in the field of education would help ease teacher shortage over the medium term. - Policy options could include adjusting salaries (or other benefits) depending on the city and cost living, to facilitate teachers’ mobility (such policies are implemented in the UK, for example). - Covid-19 effects on teachers - School closures during the pandemic have created learning losses in the Netherlands, especially in primary schools, with students from the most vulnerable households (lower income groups) particularly affected (Engzell et al., 2020). - The long-term impact of such losses remains uncertain, but the costs for human capital can be non-negligeable (Teunissen et al., 2021). - Some evidence suggests that the pandemic has further increased the shortage of teachers in some regions and schools where pupils’ learning losses were the largest. - Government response and funding - The government announced spending worth 8.5 billion euros (about 1% of GDP) over the next two years to support a National Educational Plan. - These funds can help address some of the issues discussed above. - The resources will need to be used efficiently, including through targeted investments and policies, to maximize the outcomes. - The Netherlands’ exceptionally strong fiscal position, even post-pandemic, means that additional public support can be made available over a longer period, which may be necessary to address some of the more persistent issues. - Investment in education will help address the changing demand in skill sets, particularly post COVID-19, including those driven by increased digitalization. ### Employment Impacts, Job Retention Schemes, and Labor-Market Policy Recommendations - Employment impacts by contract type (pandemic period) - Employment in full-time contracts declined by about 1 percent in the second and third quarters of 2020, compared to a contraction of only 0.1 percent for part-timers. - Part-time employment grew above 1 percent in 2020:Q4 and 2021:Q1. - Full-time employment contracted further by 2.5 and 2 percent in 2020:Q4 and 2021:Q1 respectively. - With more than 60 percent of women working part-time in the Netherlands, the increase in part-time jobs has mostly benefited women’s employment. - Latest available data suggest labor participation has increased slightly more rapidly among women compared to men as the economy emerges from the pandemic. - Job Retention Schemes (NOW program) - The Netherlands replaced its existing STW scheme with the Temporary Emergency Bridging Measure for Sustained Employment (NOW). - NOW is a temporary wage subsidy where employers continue to pay employees their full usual wage and receive a subsidy proportional to the reduction in turnover. - The subsidy could cover up 90 percent of labor costs at the beginning of the pandemic for businesses expecting revenue loss of 20 percent or more. - Employers receive a subsidy they can use for hours worked; the size of the subsidy is proportional to the decrease in revenue rather than the reduction in working hours (hybrid design). - As in all JRS, employers have an obligation to keep their worker employed even if their work is suspended. - The STW scheme coverage limit was reduced to 80 percent of labor costs by 2021:Q2. - Sectoral and worker heterogeneity - JRS coverage varied significantly across sectors, reflecting heterogeneity of output contraction; take up rates (as a share of total employees) declined in 2020:Q4 compared to 2020:Q2 and shifted more towards Services from Industry, especially hospitality and other services. - Hours worked contracted significantly more than employment, with the difference larger for sectors with higher JRS take up rates. - Workers on temporary contracts and low-skilled workers (less educated) were particularly affected by the pandemic. - The Netherlands has larger shares of both temporary and low-skilled employment compared to euro area averages. - Sectors most affected (contact-intensive services) have relatively higher shares of lower-skilled and temporary workers, especially younger workers, increasing risk of prolonged unemployment. - Sectors with larger shares of temporary and low-skilled workers had higher take up rates of the employment support program; the self-targeting mechanism in NOW allowed hardest-hit sectors to benefit most. - Summary assessment - The unemployment rate rose by much less than might have been feared given the mid-2020 activity reduction and has been on a strong and persistent declining trend since August 2020, converging toward pre-pandemic lows. - The swift and strong policy response moderated negative labor-market impacts of lockdowns and mobility restrictions. - The adverse employment impacts were unevenly distributed, disproportionately affecting temporary and less skilled workers. - The NOW program was particularly successful as a bridge through an exogenous and deep crisis; as the pandemic wanes, the NOW program should be discontinued, though its design could be useful again for future large shocks. - Policy recommendations (labor market and training) - Subsidies for training costs to reduce the overall cost of training for firms, particularly financially constrained firms. - Subsidies could be differentiated to facilitate training of lower-skilled workers. - Subsidies for training could also be provided to individuals (not only firms) to extend opportunities to non-standard workers. - Training could be combined with other ALMPs and be market-led (firms decide based on needs). - Policies to reduce labor market duality to increase resilience to future shocks. - Ensure appropriate social protection including a mandatory disability insurance and some basic pension insurance for the self-employed (as currently planned). - Continue realigning tax and other incentives across different types of employment, e.g., gradually reducing the tax credit for self-employed once the pandemic has been left behind. - Improve employment protection for workers in flexible contract arrangements to enhance resilience and support wage growth. - Given high prevalence of part-time employment among women: - Improve availability and affordability of childcare (currently, its cost exceeds EU and OECD averages) to better enable women to work full-time. - Continue reforms of parental leave, including expansion of paternity leave, to facilitate full-time female labor participation. *Prepared by Armand Fouejieu. Source: 1nldea2021002 - IMF PDF chapter excerpts.* ### 1. Enrollment Rates_____________________________________________________________________________ 5 ### 1. Enrollment Rates ### A. Introduction - Investing in education is important for growth and equity; human capital boosts productivity and economic growth and enhances robustness to shocks. - Less skilled and lower educated workers were the most affected by the economic impact of the Covid-19 pandemic. - Investment in education is expected to yield a "double dividend": at the macroeconomic level by supporting growth, and at the individual and societal level by supporting equality of opportunities. ### B. The State of Education — Participation and Outcomes - The Netherlands performs well by international comparison but faces emerging challenges: - In 2019, 93 percent of Dutch aged 15–19 years old were enrolled in education, compared to 88 percent and 84 percent on average in the EU and OECD, respectively. - At least 90 percent of the Dutch population between 4 and 17 years old is enrolled in formal education (similar to EU and OECD averages) and this rate has remained stable over the past ten years. - Enrollment in early childhood education (pre-primary) declined in the Netherlands from 94 to 89 percent between 2010 and 2019, while the EU increased from 84 to 91 percent over the same period. - Educational attainment levels: - 80 percent of the Dutch population aged 25–34 years has at least upper secondary educational attainment, compared to 69 percent and 73 percent in the OECD and the EU, on average, respectively. - Among 25–34 year olds, 49 percent had a tertiary educational level in the Netherlands in 2019, compared to 44 percent in the EU; up from 40 percent in 2009. - In 2019 about 90 percent of students enrolled in general upper secondary education completed the program within the theoretical duration period plus 2 years; completion rate was below 80 percent for similar degrees in vocational education. - Deterioration in some outcomes by international standards: - PISA reading scores fell below the OECD average in 2018; about ¼ of Dutch aged 15 were unable to read properly according to the 2018 PISA report. - Netherlands’ PISA reading rank went from 7th in 2003 to 21st in 2018 out of 37 countries with data. - Science: rank fell from 7th in 2003 to 10th in 2018. - Mathematics: Dutch performance broadly followed the declining trend of the rest of the OECD. - National versus international test measures: - The 2020 Netherlands Inspectorate for Education report suggests final test results in secondary education have remained broadly stable in recent years. - The 2021 State of Education report highlights marked deficiencies in reading and mathematics, especially in the first year of secondary education. - Disparities by income and migration background in primary education: - Pupils from lower income families consistently perform below average with no evidence of catching up in the past decade; gaps may have widened slightly recently, especially for pupils in the first quintile of the income distribution. - Pupils with "Western" migrant background perform broadly as well as Dutch natives; pupils with "Non-Western" migrant background perform comparatively poorly, though the gap has declined in recent years but remains large. - These disparities point to inclusiveness gaps and inequality of opportunity that may affect attainment beyond primary education and employment prospects. ### C. Education and the Labor Market - Strong average education outcomes are associated with higher employment rates: - The Netherlands employment rate has been persistently above that of the EU and OECD and increased faster in the past fifteen years; only Iceland and Switzerland have employment rates exceeding that of the Netherlands. - Combining education and employment at young ages: - In 2019, 42 percent of Dutch aged 18–24 were still in the education system while being employed; the largest proportion among OECD countries (OECD average: 17 percent). - 35 percent of this age group had exited the education system (compared to 47 and 43 percent in the OECD and EU average, respectively); 80 percent of those who exited are employed. - Netherlands has one of the lowest shares of NEET (not in education nor employed or in training). - Educational attainment distribution in employment: - Share of working age population with tertiary educational attainment is above EU average: 38 percent versus 35 percent. - Netherlands also has a higher share of employees with an education level below upper secondary education: 21 percent versus 16 percent in the EU. - Proportion of the upper secondary educational degree is below EU and OECD. - Potential skills mismatches between education supply and sectoral demand: - Health and welfare: largest share among upper secondary vocational graduates but declined from 27 percent in 2013 to 24 percent in 2019; employment in health and social services remained around 16 percent. - Services: employment declined slightly from 29 to 27 percent between 2013 and 2019, while graduates in services increased by about 1.5 percentage points to almost 23 percent in 2019. - Education sector: employment stable at about 7 percent while only 2 percent of graduates studied this field between 2013 and 2019. - Industry sector: employment stable at about 15 percent; graduates in engineering, manufacturing and construction about 18 percent. ### D. Investing in Education — Expenditure and Financing - Aggregate spending and composition: - In 2017, total expenditure on education in the Netherlands amounted to about 5.2 percent of GDP, compared to 4.8 and 4.4 percent in the OECD and EU, respectively. - Higher expenditure is mainly driven by tertiary education: 1.7 percent of GDP in the Netherlands versus 1.4 and 1.3 percent in the OECD and EU, respectively. - Public expenditure on education represented about 12 percent of general government expenditure in 2019, up from 9 percent in 1995, and above OECD and EU averages. - More than 80 percent of spending on education is financed by public funds; private investment plays a relatively smaller role. ### E. Effects of the Covid-19 Pandemic - School closures and distance learning: - Containment measures included temporary school closures. - Early analyses (Engzell et al., 2020) suggest school closures caused learning losses among most pupils, especially the most vulnerable (e.g., from lower income households). - Pandemic risks exacerbating existing disparities: - The most affected pupils were already lagging behind in educational outcomes, suggesting the pandemic could have exacerbated disparities. - School closures appear to have worsened teacher shortages, especially in the most disadvantaged schools. ### F. Policy Implications and Recommendations - Foster early childhood education: - Additional public investment to support broad access to affordable pre-primary education would help pupils start strong and help close initial gaps (such as those related to migrant background). - Targeted investments for equality of opportunity: - Targeted education investments, especially in relatively disadvantaged regions/schools, would support equality of opportunity in primary education. - Strengthen secondary attainment and transitions: - Policies to further boost secondary educational attainment and facilitate the transition from lower secondary to upper secondary education will help improve performance. - Address long-standing teacher shortages: - Tackling teacher shortages will support stronger education outcomes across the board and reduce risks of widening inequality of opportunity. *Prepared by Armand Fouejieu. Source: 1nldea2021002 - 1. Enrollment Rates (IMF PDF chapter).* ### 16. The Netherlands’ public expenditure on education as a ratio to GDP, however, has ### 16. The Netherlands’ public expenditure on education as a ratio to GDP, however, has ### Trends in public expenditure and per-student spending - The ratio of public expenditure on education to GDP declined by about 10 percent over the past 10 years. - Declines were concentrated in pre-primary and primary education, while ratios remained somewhat stable in secondary and tertiary education (Figure 7). - The Netherlands has one of the lowest ratios of expenditure to GDP in pre-primary and primary education in the OECD. - In 2018: - Per-student government expenditure on education (in percent of GDP per capita) was significantly lower in primary education compared to the EU average. - Per-student public expenditure in tertiary education was larger than in the EU. - Per-student public expenditure in secondary education was very similar to the EU. ### Household spending on education - Household expenditure on pre-primary and primary education has increased significantly in recent years, almost doubling as a ratio of GDP since 2012 compared to the decade before. - Household expenditure on education has been volatile, ranging from 0.4 to 0.7 percent of GDP in the past two decades; this volatility is primarily driven by expenditure on tertiary education. - Although household spending represents only a small share of the total, its rise in pre-primary and primary partially offsets lower government expenditure in those levels. ### Efficiency of expenditure — methods and metrics - Efficiency assessment combines: - Data Envelope Analysis (DEA) using the IMF Expenditure Assessment Tool (EAT). - Statistical comparisons with peer countries using multiple outcome measures. - Education outcome dimensions considered: - Quantity: tertiary educational attainment. - Quality: PISA test scores (reading, mathematics, science). - Inclusiveness: inverse of young people NEET (not in education nor employed or in training). ### Efficiency of expenditure — findings - DEA (2016 data) results: - The Netherlands performs among the top for primary enrollment relative to spending, located on the efficiency frontier for primary enrollment. - Secondary education shows inefficiencies: despite higher expenditure per student in secondary education, the enrollment rate is similar to OECD, EU, and advanced-economy averages; distance to the efficiency frontier indicates scope for improvement. - Alternative statistical analysis (lagging inputs by 5 years) indicates: - Tertiary education (quantity): the Netherlands shows comparatively strong performance — higher share of young people with tertiary attainment than the OECD average despite similar expenditure; however, countries such as Luxembourg, Lithuania, and Ireland achieved stronger outcomes while spending less. - Quality (PISA average across tests): the Netherlands stands above EU and OECD averages with lower education expenditure than OECD but higher than EU; however, reading scores are comparatively low relative to the sample. - Enrollment patterns: - Significantly lower enrollment rate in upper secondary education than EU and OECD. - Much higher enrollment rate in lower secondary education. - Out-of-school rate in lower secondary education: 2.5 percent in the Netherlands vs. 2 percent (OECD average) and 1.5 percent (EU average); Austria, U.K., and Spain have out-of-school rates below 0.5 percent. - Inclusiveness (inverse NEET): the Netherlands outperforms most countries, with one of the highest shares — 93 percent of 18–24-year-olds either in education, employed, or in training — compared to 85 percent average in the OECD, despite similar expenditure. ### Pre-primary education: enrollment and spending - The Netherlands has a lower enrollment rate of 3–5-year-olds compared to the EU average. - Early childhood enrollment has increased in most OECD countries over the past decade, with the Netherlands being an exception. - Lower expenditure in pre-primary education (one of the lowest in the OECD) is associated with the lower 3–5-year-old enrollment rate. - Top performers (nearly 100 percent enrollment rates, e.g., France, Ireland, and Israel) spend roughly twice as much as the Netherlands on pre-primary education. ### Teaching staff, class sizes, and shadow education - The Netherlands has one of the highest student-to-teaching-staff ratios in primary and secondary education in the OECD. - In secondary education, the ratio was the fourth largest in the OECD in 2018. - The ratio of students to teaching staff is also above EU and OECD averages in pre-primary education. - These ratios have been stable over recent years, showing no signs of improvement. - Higher student-to-teacher ratios in the Netherlands are associated with higher prevalence of “shadow education” (after-school education support provided at household expense), which may increase inequality because such support is only available to households that can afford it. ### Summary of performance - The Dutch education system broadly performs above OECD and EU averages in several dimensions, supported by higher investment in education, especially tertiary education. - Strengths: - One of the highest enrollment rates of school-age population in the OECD. - Larger share of tertiary educated youth and employees than OECD and EU averages. - High inclusiveness by the inverse NEET measure. - Challenges: - Comparative performance in international tests has declined somewhat over the last 20 years. - Persistent differences in educational achievement among children from different socioeconomic groups. - Pre-primary and primary expenditure declines and low pre-primary enrollment. - High student-to-teacher ratios and related reliance on shadow education. - A “missing middle”: relatively high shares at tertiary and lower secondary attainment, but lower shares at upper secondary, and one of the highest proportions of lower-educated workers. ### Policy implications and recommendations - Fostering early childhood education: - Increase enrollment and improve access to pre-primary education through additional public investments. - Public provision of early childhood education and care is important to ensure broad access and affordability. - Increasing pre-primary provision would also support women’s full-time employment, as a large majority currently work part-time. - Supporting equality of opportunity in primary education: - Targeted investments in regions/schools serving disadvantaged pupils to close test-score gaps by income and migrant background. - Potential measures include more teaching staff to address individual needs and technology to enhance learning. - Earlier investment in pre-primary education can support fundamentals (e.g., language for disadvantaged migrant-background children). - Boosting secondary educational attainment and smoothing transitions: - Address the “missing middle” by increasing upper secondary attainment and reducing out-of-school rates in lower secondary education. - Improve completion rates in upper secondary vocational education within the theoretical duration, aiming to reach levels of top performers such as Austria, Switzerland, and Belgium. *Source: KINGDOM OF THE NETHERLANDS—THE NETHERLANDS (excerpts provided).* ### 26. Addressing teacher shortage will also support stronger education outcomes across the ### 26. Addressing teacher shortage will also support stronger education outcomes across the board ### Teacher shortage: patterns and causes - Teacher shortage has been more acute in major cities in the Netherlands, especially in the Randstad. - According to the 2020 State of Education report, the shortage is also more prevalent in the most disadvantaged schools (those located in poorer regions of the country and with larger proportion of disadvantaged students). - The share of students in the field of education is significantly low compared to the share of employment in this sector, suggesting that, without policy interventions, the shortage will likely persist. - Anecdotal evidence suggests that costs of living and other external factors such as the cost of housing increase the shortage in large cities. ### Medium-term policy options to ease shortage - Creating incentives to boost graduation in the field of education would help ease teacher shortage over the medium term. - Policy options could include adjusting salaries (or other benefits) depending on the city and cost living, to facilitate teachers’ mobility (such policies are implemented in the UK, for example). ### Covid-19 effects on learning and teachers - School closures during the pandemic have created learning losses in the Netherlands, especially in primary schools, with students from the most vulnerable households (lower income groups) particularly affected (Engzell et al., 2020). - The long-term impact of such losses remains uncertain, but the costs for human capital can be non-negligeable (Teunissen et al., 2021). - Some evidence suggests that the pandemic has further increased the shortage of teachers in some regions and schools where pupils’ learning losses were the largest. - These developments exacerbate existing challenges, requiring rapid policy interventions. ### Government response and funding for education - The government announced spending worth 8.5 billion euros (about 1% of GDP) over the next two years to support a National Educational Plan. - These funds can help address some of the issues discussed above. - The resources will need to be used efficiently, including through targeted investments and policies, to maximize the outcomes. - The Netherlands’ exceptionally strong fiscal position, even post-pandemic, means that additional public support can be made available over a longer period, which may be necessary to address some of the more persistent issues. - Investment in education will help address the changing demand in skill sets, particularly post COVID-19, including those driven by increased digitalization. *Source: 1nldea2021002 - 26. Addressing teacher shortage will also support stronger education outcomes across the (PDF chapter).* ### 9. Employment losses were larger among full-time workers compared to those working ### 1nldea2021002 - 9. Employment losses were larger among full-time workers compared to those working ### Employment impacts by contract type - Employment in full-time contracts declined by about 1 percent in the second and third quarters of 2020, compared to a contraction of only 0.1 percent for part-timers. - Part-time employment grew above 1 percent in 2020:Q4 and 2021:Q1. - Full-time employment contracted further by 2.5 and 2 percent in 2020:Q4 and 2021:Q1 respectively. - The shift from full-time to part-time jobs is partly attributed to limited economic activity since the second half of 2020 due to the persistence of the health crisis and containment measures. - With more than 60 percent of women working part-time in the Netherlands, the increase in part-time jobs has mostly benefited women’s employment. - Latest available data suggest labor participation has increased slightly more rapidly among women compared to men as the economy emerges from the pandemic. ### Job Retention Schemes (JRS) and the NOW program - The Netherlands replaced its existing STW scheme with the Temporary Emergency Bridging Measure for Sustained Employment (NOW). - NOW is a temporary wage subsidy where employers continue to pay employees their full usual wage and receive a subsidy proportional to the reduction in turnover. - The subsidy could cover up 90 percent of labor costs at the beginning of the pandemic for businesses expecting revenue loss of 20 percent or more. - Employers receive a subsidy they can use for hours worked; the size of the subsidy is proportional to the decrease in revenue rather than the reduction in working hours (hybrid design). - As in all JRS, employers have an obligation to keep their worker employed even if their work is suspended. - The STW scheme coverage limit was reduced to 80 percent of labor costs by 2021:Q2. ### Sectoral and worker heterogeneity - JRS coverage varied significantly across sectors, reflecting heterogeneity of output contraction; take up rates (as a share of total employees) declined in 2020:Q4 compared to 2020:Q2 and shifted more towards Services from Industry, especially hospitality and other services. - Hours worked contracted significantly more than employment, with the difference larger for sectors with higher JRS take up rates. - Workers on temporary contracts and low-skilled workers (less educated) were particularly affected by the pandemic. - The Netherlands has larger shares of both temporary and low-skilled employment compared to euro area averages. - Sectors most affected (contact-intensive services) have relatively higher shares of lower-skilled and temporary workers, especially younger workers, increasing risk of prolonged unemployment. - Sectors with larger shares of temporary and low-skilled workers had higher take up rates of the employment support program; the self-targeting mechanism in NOW allowed hardest-hit sectors to benefit most. ### Summary of effects and assessment of policy - The unemployment rate rose by much less than might have been feared given the mid-2020 activity reduction and has been on a strong and persistent declining trend since August 2020, converging toward pre-pandemic lows. - The swift and strong policy response moderated negative labor-market impacts of lockdowns and mobility restrictions. - The adverse employment impacts were unevenly distributed, disproportionately affecting temporary and less skilled workers. - The NOW program was particularly successful as a bridge through an exogenous and deep crisis; as the pandemic wanes, the NOW program should be discontinued, though its design could be useful again for future large shocks. ### Policy recommendations - Subsidies for training costs to reduce the overall cost of training for firms, particularly financially constrained firms. - Subsidies could be differentiated to facilitate training of lower-skilled workers. - Subsidies for training could also be provided to individuals (not only firms) to extend opportunities to non-standard workers. - Training could be combined with other ALMPs and be market-led (firms decide based on needs). - Policies to reduce labor market duality to increase resilience to future shocks. - Ensure appropriate social protection including a mandatory disability insurance and some basic pension insurance for the self-employed (as currently planned). - Continue realigning tax and other incentives across different types of employment, e.g., gradually reducing the tax credit for self-employed once the pandemic has been left behind. - Improve employment protection for workers in flexible contract arrangements to enhance resilience and support wage growth. - Given high prevalence of part-time employment among women: - Improve availability and affordability of childcare (currently, its cost exceeds EU and OECD averages) to better enable women to work full-time. - Continue reforms of parental leave, including expansion of paternity leave, to facilitate full-time female labor participation. *Document: Extract from IMF chapter section on the Netherlands labor market and employment support measures.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2021/english/1nldea2021002.pdf_