The education forecast’s purpose is to evaluate the development of education levels within the population as well as to forecast the expected number of people taking up the various education levels. In addition to this, the forecast can be used to evaluate policy effects on the uptake of the education levels, and in doing so, also forecasts the policy effects on overall education levels in the population.
In the long-run, developments in education levels of the population depend on enrolment rates of the various education levels as well as how many of those enrolled students complete their education. Because of this, the model forecasts the expected number of skilled and unskilled individuals as well as the number of individuals that complete a higher education. The more people that start an education as well complete it results in an increased number of educated individuals. The importance of the model following individuals through their education is highlighted by the differences in individuals that start a high school education as opposed to starting a 10th grade. Those that start a high school education, after the nine compulsory years of primary schooling, are more likely to take a medium to long-term higher education, whereas those that complete 10th grade are more likely to take vocational educations.
The model is based on the educational behaviour observed from 1989 to the most recent statistics, which are typically two years earlier than the year of publication. As such, the expected take up and the number of completed educations are based on the latest observed data. This provides the forecast with some credibility as it is based on observables. The observed numbers are used to aid the statistical model to estimate the numbers that form a primary forecast. There are however situations where it is appropriate to correct the estimated numbers, e.g. in the case of explicit policy reform. An example of such correction was done in 2015 in response to the vocational education reform which introduced a range of increased enrolment requirements. The reform had a direct impact on the number of students enrolled in vocational educations, which had a direct consequence of lowering the uptake and was thus recorded in the data (for more details see the 2019-report link below). One might expect that the number of drop-outs would decrease as a result of the reform, which has been supported by the analyses of educational programs; however, it is not fully accounted for by the education statistics. If the data were not corrected, the model would underestimate the number of people which complete a vocational education. Therefore, the completion likelihoods are adjusted in accordance with the effects calculated by the Ministry of Education.
The results from the forecast are a qualified indication of the composition as well as the number of education levels acquired by the Danish population and the qualifications that will be supplied to the labour market.
The so-called base forecast provides DREAM’s evaluation of expected developments in the composition of education levels. The base forecast is used as an input for DREAM’s socio-economic model where the education level composition contributes to forecasting the number of employed, early-retirement pensioners, pensioners, etc.
The model is also independently used to evaluate the development of the educational objectives. These objectives are comprised of three main values: the number of people that never complete more than a primary education, the number that complete a further education (secondary school, vocational etc.) and the number that complete a higher education.
Evaluations of economic developments in the long-run are primarily driven by developments in the labour force and developments in the labour force are in part driven by changes in education levels of the population. Individuals that have a higher education thus have better ties to the labour market than those without.
Long-run forecasts of the Danish population’s education levels have been a part of the DREAM-group’s work since 2007. The forecast model is continuously being developed and updated alongside the other models the DREAM-group has developed. The development of the education forecast enabled the rising education level of the population to have a positive effect on the average participation rates in the future. The education forecast has also been used for mismatch analysis to shed light on the expected development in demand for qualifications by firms and the workforce’s corresponding supply of qualifications.
The idea behind the education forecast is to split the population forecast into groups by age, gender, origin as well as by their highest completed education and their current ongoing education.
Using individual specific data, the population is divided into the highest level of education achieved by the end of each year and optionally by ongoing education as well. The education levels are divided by the categories that correspond to UNI-C’s main education groups.
Using these groupings, the education model forecast the number of students and developments in their progress through the education systems via a microsimulation model. The method consists of tracking an individual beginning, continuing, dropping out or completing an education using annual transition probabilities.
The model utilises an advanced estimation method to forecast the expected education behaviour using data from 1981 to 2018.
Short description of the Danish education system
The Danish education system, similar to other western countries, is comprised of a primary school, secondary school and various higher education programs that are either vocational or at a university level (higher education). There is however an additional educational level in Denmark called 10th grade which follows primary school and is optional.
Primary school in Denmark consists of nine years of obligatory schooling. After this is completed, 10th grade or secondary school is an option available to potential students. 10th grade typically consists of one year, but can be extended. Secondary school is the pre-requisite to university level courses and is typically a three year long program.