The Department for Education released a Skills Funding Agency update last week that could have positive ramifications for the broader job market. In 2010, three- and four-year-olds were allotted 15 hours a week of free education and two years later, over 95% of these children are accessing their free entitlement. An article published by the Department for Education in November 2012 says:
The Government has now committed to extending this to around 20 per cent of the least advantaged two-year-olds, around 150,000 children from September 2013. In May 2012 the Government confirmed that two-year-olds who live in households which meet the eligibility criteria for free school meals will be entitled to a free early education place, along with children who are looked after by the state.
The Government expects this new provision will require the early years sector to recruit around 28,000 new jobs by 2014.
The creation of new jobs is always an exciting prospect. We can use Analyst to delve deeper into this situation, by first looking at the pre-primary education industry and then using the Input/Output tool to examine the knock-on effects of the Government’s proposal.
Pre-primary education (SIC 8510)
Pre-primary education saw incredible growth in 2009 (over 20%). Since then, the industry has been increasing steadily, but is expected to leap forward in the next few years.
In 2012, there were 82,007 jobs in the industry, an increase of 17,060 from 2009. Scotland provided 7,787 of these jobs and Wales accounted for 936. Of the regions in England, the South East is the largest in the industry with 14,676 jobs, while the smallest is the West Midlands, with 3,776. London has almost as many jobs in the pre-primary education industry as Scotland and Wales combined.
The staffing pattern gives us even more insight into the industry. Here are the six occupations that provide the highest percentage of total jobs in the industry.
|SOC||Occupation||Employed in Industry (2009)||Employed in Industry (2012)||Change||% Change||% of the Total Jobs in Industry (2011)||Median Hourly Earnings|
|Source: EMSI Class of Worker BETA - 2012.1|
|2315||Primary and nursery education teaching professionals||6,407||10,357||3,950||62%||12.5%||£21.56|
|1239||Managers and proprietors in other services n.e.c.||1,915||2,679||764||40%||3.3%||£16.23|
|6122||Childminders and related occupations||1,456||2,208||752||52%||2.7%||£7.48|
Nursery nurses lead the charge at 48.2% of the industry. But in terms of job outlook, they are lagging behind, while playgroup leaders/assistants, primary and nursery education teaching professionals, and education assistants are growing by 67%, 62%, and 56% respectively. And nursery nurses are far from the most well-paid of these workers. The median hourly earnings are £7.57, just over one-third of the median hourly earnings of primary and nursery education teaching professionals.
Adding jobs to the industry
If the Department for Education’s plan goes well, the pre-primary education industry will gain 28,000 new jobs in the next two years. We can turn to Analyst’s Input/Output tool to get a better idea of what that means for the economy.
The Input/Output tool uses data from 2011, so it puts 79,301 jobs in the industry. Adding jobs to the economy will always have an effect on multiple industries. How the growth of one industry affects another is called a ‘multiplier’, and as we can see, pre-primary education has an earnings multiplier of 3.53 and a jobs multiplier of 2.31.
On the face of it, we can see the incredible amount of earnings generated by that change. The 28,000 jobs created will generate over £1.2 billion. It’s important to note that the multiplier includes both the initial addition and also the knock-on effects. So, for example, the change in jobs looks to be 64,588 jobs, but remember, 28,000 of those jobs were added by us when we started the scenario. The downstream effects of that initial change are 36,588 jobs — both in the education industry and in other industries.
We can even look deeper into the industry classification and see exactly where the growth is happening. The table below takes us into the 2-digit SIC industries, where we can see the effects on the broader economy. To keep things simple, we’ve only included the industries that benefit the most from the creation of these jobs, as measured by a job growth of 500 or more.
|Source: EMSI Class of Worker BETA - 2012.1|
|10||2||Manufacture of food products||405,082||0||602|
|43||2||Specialised construction activities||725,412||0||527|
|45||2||Wholesale and retail trade and repair of motor vehicles and motorcycles||606,454||0||676|
|46||2||Wholesale trade, except of motor vehicles and motorcycles||1,208,029||0||1,609|
|47||2||Retail trade, except of motor vehicles and motorcycles||3,102,001||0||4,365|
|49||2||Land transport and transport via pipelines||618,603||0||881|
|56||2||Food and beverage service activities||3,319,336||0||2,437|
|62||2||Computer programming, consultancy and related activities||598,466||0||775|
|64||2||Financial service activities, except insurance and pension funding||503,941||0||700|
|69||2||Legal and accounting activities||1,569,426||0||568|
|70||2||Activities of head offices; management consultancy activities||802,280||0||544|
|81||2||Services to buildings and landscape activities||721,945||0||834|
|84||2||Public administration and defence; compulsory social security||1,415,832||0||1,688|
|86||2||Human health activities||3,281,253||0||2,909|
|87||2||Residential care activities||641,519||0||740|
|88||2||Social work activities without accommodation||879,193||0||739|
|93||2||Sports activities and amusement and recreation activities||425,204||0||532|
This kind of growth has many effects for the future. Since we know that the Department for Education is already planning to add 28,000 jobs to the economy, we can be fairly certain that will see these knock-on effects sometime in the future. Knowing this, both businesses and colleges can put themselves in a position to address these fast-approaching trends and ensure that they have the resources to meet these needs.