Labour Market Challenges and Education Institutions

Skill formation is gaining popularity in many subfields of research in social sciences, including higher education research, sociology of education, education and labour economics of education, comparative public policy of higher education and interdisciplinary fields of Varieties of Capitalisms and welfare regime studies. Globalization, economization of education, skills and practice orientation, constructivist teaching methods, blended learning and e-education, choice orientation, attention to the bibliometric measurement methods and other features used in the construction of league-tables quality assessment of academics and universities are some of the developments that practitioners and researchers of the field deal with. This project is addressed to investigate what are the associations between outcomes (skills, achievement, welfare, etc.) and organisational, individual and country level attitudinal or institutional features.


Keywords: education economics, school/university choice, commercialization and massification of higher education, performance metrics, statistical and financial literacy, labour force and skills anticipation.



The research focuses on the effects of labour market and societal institutions (including management practices) to individual level outcomes such as grades, skills/competences, wages, (un)employment, values, well-being, etc. or group level outcome gaps such as achievement gap or wage gap.


The goal of this project is to build a research agenda that would allow policy implications by answering the “what” questions such as: (a) what affects educational/labour market outcomes; (b) what affects achievement gaps; (c) what affects the preface of academics and higher education institutions? These questions aim at discovering the mechanisms behind the phenomenon – gender wage gap; minority- language achievement gap; cohort-effects; choice policy effects on achievement, features of the academic career systems and career choices of academics on their performance etc. We also welcome East-West or Estonia-Finland contrast and comparisons as well as more focused Varieties of Capitalism perspective of the analysis of education institutions (including vocational education) in Estonia and/or post-soviet countries. Thus, the very specific research question is expected to be formed during first year of the project.


Theoretical framework in the project comes from interdisciplinary literature but is mainly relying on educational  production  function  approach  pioneered  by  Hanushek (1968). This  approach  is explaining how educational outcomes are produced as a result of personal and family background characteristics, school/university level teacher, curriculum and peer effects including educational governance effects. Mostly the theoretical literature in this field is limited or discipline specific. Thus, sociology of education, political economy, behavioral studies, and additional fields can have relevant insights to the project. In addition, there are a lot of mixed empirical insights that makes the field challenging. Most of all, various comparative micro-level data-pools allow to test wide variety of hypotheses and apply micro-econometric tools. Also, the additional aim of the project is to gain and promote academic rigor by applying modelling tools that allow to work with big data and microdata.


Participation in the activities of research network, such as Economic Education Network, and presenting at the international conferences, such as at the LEER Conferences of Education Economics, are expected, encouraged and financed.


Current project is based on existing cross-sectional or longitudinal public microdata. Most of the research topics are aiming at research of quantitative nature, i.e. applying regression techniques, data analytics, and program impact evaluation techniques. However, we are also interested in applications in alternative kind such as experimental studies, comparative qualitative analysis, etc. For the experimental studies, data collection by the researchers participating in the project is inevitable, but for the most studies we rely on existing (i.e. secondary) data sources. Most studies in this project will rely on cross-national, cross-sectional or longitudinal surveys such as European Social Survey (ESS), European Value Study (EVS), Programme for International Student Achievement (PISA), Survey of Adult Skills (PIIAC), Life in Transition Survey (LITS).

PhD candidate profile

Candidates should have a completed Master’s degree in economics, or sociology, or political science, or another field that provides a sufficient background for current research. Furthermore, curiosity and an interest to work in an interdisciplinary environment are regarded as assets. The necessary skills for using the appropriate statistical methods including programming software R and R Studio can be learned during the first year of the program.

Expected output

The outcome of the project will consist in a number of research papers that will form the contents of the PhD dissertation. The project is designed to result in publications in leading field journals in education, sociology, public policy, economics, business or management.


The research group is consisting of following researchers: (a) Professor Kaire Põder (b) Professor Olav Aarna, (c) Associate professor Riina Koris, (d) Karmo Kroos, , (e) Leonore Riitsalu, and (f) Sami Soinio. The candidate will collaborate with several other professors and their research groups in the field of the Economics of Education: Associate Professor Kristof de Witte (University of Antwerp), Daniel Horn (Hungarian Academy of Sciences), Professor Tommaso Agasisti (Politechnico Milano), Associate Professor Michiru Nagatsu (University of Helsingi), Associate Professor Triin Lauri (Tallinn University).



Societal relevance

There is well known statistical fact based on PISA tests that Estonian students at the age 14-15 over- perform most of their European peers in mathematics, science and reading (not always in financial literacy). However, it is not that well known that between the school inequality of academic results is much higher in Estonia and variation in test scores are mostly explained by school level differences. For example, Russian school students or non-selective school students perform much worse compared to counterparts. Moreover, our PISA success turns into relative mediocrity comparing adults’ literacy, numeric and problem solving skills with the fellow peers in Nordic countries or OECD average peers. We fail in many categories (average scores, % of top performers, tertiary education effect is small etc.), our relative success story is visible only in two characteristics – small gender skill gap and older people (55-65) perform relatively better than their peers in other “rich” countries. These statistical insights are just a few puzzles which indicate how challenging skill formation and human capital accumulation is in the society. The project will provide insight into the extent to which education institutions, policies or school governance affect the educational achievement and labour market outcomes compared to individual talent and effort. The findings of this research are also expected to have relevance for education policy in the specific country or countries that the study will focus and provide insights of higher education governance.


Scientific relevance

This project aims at making a contribution to the scientific discussion on the performance and its measurement in education. More specifically, the goal is to  provide answers to (some of) the following research questions: What institutional features enhance a good environment for skills formation? What produces achievement gaps between more vulnerable groups in society (by sex, language or socio-economic status) and less vulnerable groups? To what extent institutional or managerial practices can affect performance or well-being of students, academics and institutions? Which specific policy approaches, institutional-managerial practices or multiple causal paths can be identified as effective and efficient choices to mitigate such effects? Who pays and who benefits from the public provision of private goods and private provision of public goods?

Existing publications

Alas, R. & Aarna, O. (2016). An Interview with Professor Olav Aarna. The Transition from the Soviet Higher Education System to the European Higher Education Area: The Case of Estonia. Academy of Management Learning & Education, 15 (3), 626−634.


Koris, R., & Nokelainen, P. (2015). The student-customer orientation questionnaire (SCOQ): Application of customer metaphor to higher education. International Journal of Educational Management, 29(1), 115-138.


Koris, R., Caemmerer, B., & Mulki, J. (2017). Neoliberal sentiments across established and new market economies – converging perceptions and expectations of business students in higher education, Journal of Marketing for Higher Education (under review).


Koris, R., Örtenblad, A., & Ojala, T. (2017). From maintaining the status quo to promoting free thinking and inquiry: Business students´ perspective on the purpose of business school teaching. Management Learning, 48(2), 174-186.


Koris, R., Örtenblad, A., Kerem, K., & Ojala, T. (2015). Student Customer Orientation at a Higher Educational Institution: the Perspective of Undergraduate Business Students. Journal of Marketing for Higher Education, 25(1), 29-44.


Kroos, K. (2006). The Bologna Process: An Estonian Perspective. In: Tomusk, Voldemar. (Ed.). Creating the European Area of Higher Education: Voices from the Periphery (117−140). Dordrecht: Springer. (Higher Education Dynamics; Volume 12).10.1007/978-1-4020-4616-2_6.


Kroos, K. (2013). Estonian Higher Education and Research Strategy: A Systematic Review and Policy Discussion. In: Saar, Ellu and Mõttus, René (Eds.). Higher Education at a Crossroad: the Case of Estonia. Frankfurt am Main: Peter Lang, 27-69.


Kroos, K. (2015). Developmental Welfare Capitalism in East Asia with a Special Emphasis on South Korea in Seliger, Bernhard; Sepp, Jüri & Wrobel, Ralph (eds.) East Asia and Eastern Europe in a Globalized Perspective - Lessons from Korea and Estonia, Frankfurt am Main: Peter Lang, 107-162.


Lauri, T.; Põder, K. (2013). School choice policy: seeking to balance educational efficiency and equity. A comparative analysis of 20 European countries. European Educational Research Journal, 12 (4), 534−552.


Põder, K.; Lauri T.; Ivaniushina, V.; Alexandrov, D. (2016) Family Background and School Choice in Cities of Russia and Estonia: Selective Agenda of the Soviet Past and Present. Studies of Transition States and Societies, 8 (3), 5−28.


Põder, K.; Lauri, T. (2014) When Public Acts Like Private: the failure of Estonia’s school choice mechanism. European Educational Research Journal, 13 (2), 220−234.10.2304/eerj.2014.13.2.220.


Põder, K.; Lauri, T. (2014). Will Choice Hurt? Compared to What? A School Choice Experiment in Estonia. Journal of School Choice: International Research and Reform, 8 (3), 446−474.


Põder, K.; Lauri, T.; Veski, A. (2016). Does school admission by zoning affect Educational Inequality? A Study of Family Background Effect in Estonia, Finland, and Sweden. Scandinavian Journal of Educational Research, 1−26 (


Riitsalu, L.; Põder, K. (2016). A glimpse of the complexity of factors that influence financial literacy. International Journal of Consumer Studies, Vol 40, No 6: 722-731.


Tūtlys, V. & Aarna, O. (2017). Competence-based Approach in the Education Reforms of Lithuania and Estonia. In: Mulder, Martin (Ed.). Competence-based Vocational and Professional Education. Bridging the Worlds of Work and Education (381−406). Cham: Switzerland: Springer International Publishing AG.


Veski, A.; Biro, P.; Põder, K.; Lauri, T. (2017). Efficiency and fair access in kindergarten allocation policy design. Journal of Mechanism and Institution Design (forthcoming).


Veski, A.; Põder, K. (2017). Zero-intelligence agents looking for a job. Journal of Economic Interaction and Coordination, 1−26 (


Örtenblad, A., & Koris, R. (2017). Does it matter who teaches you? A study on the relevance of matching students' and teachers' personalities, The International Journal of Management Education, 15, pp. 520- 527.