Château de la Muette, the OECD's Paris headquarters. The forerunner of OECD was the Organisation for European Economic Co-operation (OEEC). OEEC was formed in 1947 to administer American and Canadian aid under the Marshall Plan for the reconstruction of Europe after World War II. Its headquarters was established at the Château de la Muette in 1949. The Organisation for Economic Co-operation and Development (OECD) took over from OEEC in 1961. Since then, its mission has been to help its member countries to achieve sustainable economic growth and employment and to raise the standard of living in member countries while maintaining financial stability - - all this in order to contribute to the development of the world economy. The 30 member countries of OECD are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.

The value of a university education for male students in the US in terms of future earning power, is double the rich country average according to the latest edition of the OECD’s annual Education at a Glance. The Paris-based Organisation for Economic Co-operation and Development says growing advantages for the better educated and likely continuing high levels of unemployment as economies move out of recession, will provide more and more young people with strong incentives to stay on in education. Governments need to take account of this in planning education policies.

“As we emerge from the global economic crisis, demand for university education will be higher than ever,” OECD Secretary-General Angel Gurría said. “To the extent that institutions are able to respond, investments in human capital will contribute to recovery.”

Going to university pays dividends in later life through higher salaries, better health and less vulnerability to unemployment, OECD analysis shows. In most countries, the difference in pay levels between people who have degrees and people who don’t is continuing to grow."

The 2009 edition of Education at a Glance calculates the returns on investment in education by balancing the costs of education and of foregone earnings against prospects for increased future earnings as a result of higher educational attainment. (See Table A8.2)

According to these calculations:

• A male student who completes a university degree can look forward to a gross earnings premium over his lifetime of more than $186 000 on average across OECD countries, compared with someone who only completes secondary school.
• For a woman the figure is lower, reflecting the disparity in most countries between male and female earnings, but it still averages out at just over $134,000.
• The highest earnings advantages are in the US, where a male graduate can expect to earn more than $367,000 extra over his lifetime and a female graduate more than $229,000.
• Italy comes second for men, with an average lifetime earnings advantage of just over $322,000, and Portugal for women, with an average advantage of nearly $220,000.
• In Ireland, the value for a male is $230,823 and $178,118 for a female.

The large disparity in the US is explained by the week collective bargaining power of non-graduates.

The OECD says the benefits don’t stop with earnings.

Government budgets and the overall economy also reap an advantage from higher numbers of graduates, the OECD figures show.

The average net public return across OECD countries from providing a male student with a university education, after factoring in all the direct and indirect costs, is almost $52,000, nearly twice the average amount of money originally invested. (See Table A8.4) 

For female students, the average net public return is lower because of their lower subsequent earnings. But overall, the OECD says the figures provide a powerful incentive to expand higher education in most countries through both public and private financing.

Education at a Glance provides a rich, comparable and up-to-date array of indicators on the performance of education systems. The indicators look at who participates in education, what is spent on it, how education systems operate and what results are achieved.

Among other points, the 2009 edition of Education at a Glance reveals that:

• The number of people with university degrees or other tertiary qualifications has risen on average in OECD countries by 4.5% each year between 1998 and 2006. In Ireland, Poland, Portugal, Spain, and Turkey, the increase has been 7% per year or more.

• In 2007, one in three people in OECD countries aged between 25 and 34 had a tertiary level qualification. In Canada, Japan and Korea, the ratio was one in two.

• In most countries, the number of people who leave school at the minimum leaving age is falling, but in Germany, Japan, Mexico, Poland, Turkey and the United States their numbers continue to rise.

• Early childhood education is growing fast, and nowhere more than in Sweden. On average in OECD countries, enrolments have risen from 40% of 3-4 year-olds in 1998 to 71% in 2007; and in Turkey, Mexico, Korea, Poland, Sweden, Switzerland and Germany enrolment in early childhood education more than doubled.

• Young  people who leave school at the minimum leaving age without a job are likely to spend a long time out of work. In most countries over half of low-qualified unemployed 25-34 year-olds are long-term unemployed.

• People who complete a high-school education tend to enjoy better health than those who quit at the minimum leaving age. And people with university degrees are more interested in politics and more trusting of other people.

The report says between 2000 and 2006, total Irish spending on education increased by 59% for all levels of education in Ireland combined below higher level. This compares with an OECD average figure of 21%;

Continuing improvements over time in completion of senior cycle - - 83% of 25-34 year olds here had completed upper-secondary education compared to 79% across the OECD;

High rates of third-level completion among the 25-34 year olds at 44%, compared to the OECD average at 34%;

Above-average graduation rates in science and technology (the number of third-level graduates per 100,000 of population aged 25-34 in employment was the seventh-highest of any OECD country); and

Above-average performance at age 15 in science, according to the OECD Programme for International Assessment.

The report says Ireland invests 4.7% of its GDP in education compared to an average of 5.7% across 30 OECD countries.

The difference would be smaller if GNP rather than GDP was used as the former partially strips out the impact of multinationals in the economy.