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MaRIHE Master thesis reader e-book 2016

Defining and Measuring the Relevance of Higher Education in Finland:Promoting Sustainable Employment through Policy Levers

Ana Godonoga


The study aims to contribute to the body of research on relevance of higher education by examining how state authorities in Finland, through steering instruments, promote the employment of graduates. Through a qualitative approach comprised of desk research and stakeholder interviews, the study explores the aspects of relevance considered important in Finnish higher education, the extent to which relevance as preparation for sustainable employment is reflected in the steering initiatives of the government, and the effectiveness of policy levers in creating relevance for the labour market. Results reveal that the role of higher education in preparing students for employment has gained importance over the years, and this has been positively reflected in education policy. Regulation and funding are regarded as the most effective measures in directing institutions to strengthen links with the working life. Overall, policy levers were found to have enhanced institutions’ orientation towards the labour market; however, their effectiveness has been perceived to be limited by lack of systematic evaluation and impact assessment. The study provides an example of how the relevance of higher education can be fostered via means of state steering, illustrates the enabling and inhibiting factors in achieving policy effectiveness, and advances practical recommendations for bolstering the capacity of policy levers to promote relevance for students, employers, and society at large.


In light of globalization, marketization and growing competition, higher education is increasingly recognized as a key factor for knowledge development and economic growth. Traditionally serving the interests of the elite, higher education has expanded over time, becoming accessible to a wider audience. At the same time, labour markets across the world became more diverse, shifting from industry and production to more creative sectors, which require innovative capacity to remain competitive. Effective development and use of skills is critical to the development of economies and societies (OECD, 2012). For this reason, higher education is increasingly expected to deliver relevance and good outcomes to its key beneficiaries, including students and families, graduates entering the labour market, employers and labour unions, and other members of society.

Although there are a range of ways to define the concept of ‘relevance’ (UNESCO, 1998), this study conceptualizes it as the extent to which higher education is able to facilitate students’ preparation for sustainable employment, identified by the Committee of Ministers of the Council of Europe (2007) as one of the four overarching objectives of higher education. During times of shrinking public budgets and transfer of education costs to students and families, higher education is expected to provide good returns by equipping students with knowledge and skills that would allow them to be successful in their jobs (Gibbons, 1998; Harvey, 2000). 

The need to align higher education closer to the labour market has been emphasized in a number of European developments. The Bologna Process, for example, has envisaged creating a common European Higher Education Area (EHEA) by promoting the mobility and employability of its citizens (Bologna Declaration, 1999). The 2020 Europe Strategy for Smart, Sustainable and Inclusive Growth aims to have at least 75% of the population between 20 and 64 years of age in employment, and 40% of young people with a tertiary education degree (European Commission, 2010b). The Agenda for New Skills and Jobs (European Commission, 2010a), one of the flagship initiatives of the strategy, brings to the attention of member states the need to strengthen efforts to modernize their labour markets, develop job-relevant skills, and harmonize the demand and supply of qualified workforce.

This study uses the case of Finland to show an example of how these developments have influenced higher education policy and practice at a national level. The research investigates how relevance conceptualised as preparation for sustainable employment has been accounted for in the policy levers of the government, and to what extent these measures are perceived effective in delivering relevance to the labour market.

Although figures show that returns to higher education have been far more superior compared to those registered at lower levels of education (Melin et al., 2015), conditions in the Finnish labour market have deteriorated in recent years due to, inter alia, a decline in GDP, a loss of cost competitiveness, and a shrinkage in the export market (European Commission, 2016). In May of 2016, for instance, compared to one year earlier, the unemployment rate for lower-degree level tertiary education (bachelor’s) rose by 4%, for higher-degree level tertiary education (master’s) – by 3%, and for PhD holders – by 5% (Ministry of Employment and the Economy of Finland, 2016, p. 7). Furthermore, certain sectors in the labour market have registered a mismatch between the demand and the supply of qualified workforce. For example, until recently, fields in culture, tourism, catering and domestic services were oversupplied with specialists, while those in technology, health, and social services were considerably understaffed (Ministry of Education and Culture of Finland, 2012; OECD, 2013).

In light of these conditions and in alignment with Finland’s vision for 2025, i.e. to enhance the dialogue between higher education providers and employers, lower the number of dropouts from education and the labour market, and attain an employment rate of 72% (Government of Finland, 2015), this study aims to investigate how public authorities take note of these challenges when designing and implementing policies, and whether higher education stakeholders perceive these measures effective in terms of delivering relevance and good employment outcomes. This study aims to answer the following research question:

How do Finnish authorities promote the relevance of higher education in terms of facilitating students’ preparation for sustainable employment?

Analytical framework

When analysing policy levers, an important step is identifying what aspects of higher education they target. Policies may be set in place to steer change at the system level, within institutions, or to influence the behaviour of individual stakeholders.

Policies may also target1 the inputs, processes (activities), or outputs of higher education. For example, authorities may regulate the inputs of higher education by setting restrictions on the number of student intakes or specifying eligibility requirements for entry into degree programmes as a way to balance the demand and supply of workforce in the labour market. Measures used to steer the processes (activities) of higher education may refer to e.g., promoting opportunities for lifelong learning to update the knowledge and skills of those who are already working. State authorities may also implement policies to influence the outputs of higher education by regulating the number of degrees, rewarding institutions for the employment success of their graduates, or funding initiatives to strengthen alumni networks or services for career guidance.

Public authorities steer the inputs, processes and outputs of higher education through different types of policy levers, defined as “governing instruments which policy makers have at their disposal to direct, manage and shape change in public services” (OECD, 2015, p. 29). Based on the work of Hood and Margetts (2007), Howlett (2011), and van Vught and de Boer (2015), this study classifies policy levers according to four types of steering mechanisms: regulation, funding, information and organisation.

Steering through regulation refers to government’s capacity to set rules and restrictions on the behaviour of HEIs. These constraints vary largely depending on the country and on the relationship between higher education and the state. For example, in decentralized systems with higher levels of institutional autonomy, the nature of steering is largely procedural and less substantive (Berdahl, 1983). To specify, the government only sets general guidelines and standards for institutions to follow, without having a direct influence on the content of education. State authorities regulate their higher education systems by e.g., enacting and changing legislation, adopting decrees, centralising admissions, or making external stakeholder representation on governing and disciplinary boards a legislative requirement.
Funding refers to steering behaviour through incentives. The government, for example, may use performance agreements and performance-based funding to reward institutions for the number of employed graduates, or may allocate project-based funding to implement a nationwide alumni career survey. Likewise, state authorities may introduce or reform financial aid models to incentivize students to graduate within normative time and enter the labour market faster.

Steering through information refers to the role of the government in collecting and disseminating employment-related information to relevant stakeholders. For instance, the government may share results of labour market forecasts with higher education institutions, conduct studies on employability, or fund marketing initiatives to advertise study programmes that are in demand on the labour market.

The fourth category of policy instruments pertains to organisation. This category includes measures directed at different organisational aspects of institutions, including teaching and learning. State authorities may, for example, establish centres for career guidance inside HEIs to strengthen students’ preparation for employment. Likewise, it may diversify the education provision to allow students to work during studies, or may set specifications to ease the transfer within and between institutions and programmes.

Hence, by directing different categories of steering tools towards particular aspects of higher education, state authorities aim to achieve certain desired outcomes, which, in this study is to promote relevance by facilitating students’ preparation for employment. The conceptual model for delivering relevance through steering of higher education is illustrated in Figure 1.

 Figure 1: Conceptual model for promoting relevance of higher education through state steering


The research design and methodology of this study follow a qualitative approach, which uses “an interpretive paradigm” to attribute meaning to the phenomenon under interest (Starman, 2013, p. 30). The study is exploratory and is concerned with investigating a determinant-outcome relationship (policy effectiveness), which is both complex and difficult to measure (Patton, 2002). The use of qualitative research is most appropriate as it provides a structure that is compatible with the topic, the research question, and the analytical framework. This work uses desk research and stakeholder interviews as research methods. It consults policy-related and scientific literature and invokes interviews with stakeholders with knowledge and experience in higher education.

Desk research

Desk research has been employed to collect written evidence of the phenomenon under study. This data collection tool has been used throughout all stages of the research process, from the initial literature review on relevance of Finnish higher education, to mapping and reflecting on the effectiveness of policy levers. Policy-related literature was compiled with the help of web-search engines and bibliographic databases, namely Google, Google Scholar, ERIC and EBSCO Host. Academic literature, higher education legislation, policy documents, national studies, and reports produced by international organisations such as the OECD, Eurostat, Eurostudent, Eurydice, and the like, were used as primary sources of written data.

Stakeholder interviews

To identify the effectiveness of policy levers, stakeholder interviews were conducted with a number of experts with experience and knowledge of Finnish higher education. Interviews are known to complement and enrich the information collected from desk research, serving as “means for exploring and understanding the meaning individuals or groups ascribe to a social or human problem” (Creswell, 2009, p. 4).

A total of 12 experts were interviewed from the following 9 organisations: (1) the Ministry of Education and Culture (MoEC); (2) the Ministry of Employment and the Economy (MoEE); (3) the National Union of University Students in Finland (SYL); (4) the Union of Students in Finnish Universities of Applied Sciences (SAMOK); (5) the Central Organisation of Finnish Trade Unions (SAK); (6) the Confederation of Unions for Professional and Managerial Staff in Finland (AKAVA); (7) The Confederation of Finnish Industries (EK), (8) The Finnish Education Evaluation Centre (FINEEC); and (9) the Career Services of the University of Tampere. These stakeholders were selected purposefully, to incorporate the perspective of those who elaborate policies (the government and government-related agencies), and those who are influenced by them (students, graduates, employers, unions, etc.). Each organisation was represented by one and in some cases by two experts (SAMOK, FINEEC, and the Career Services of the University of Tampere). A total of 8 interviews were conducted face-to-face, one via Skype and one via email. The data were collected between April and May, 2016, and the average duration of one interview was one hour. Of the total number of interviewed participants (n=12), 58.3% (n=7) were male and 41.7% (n=5) were female. The work experience of the participants in their organisations ranged from 3 months to 20 years.

The interview questionnaire was comprised of 13 questions, grouped thematically under 3 categories: (1) general questions related to the concept of relevance in higher education (n=3); (2) policy levers targeted towards graduate employability (n=8); and (3) participants’ demographic information (n=2). Among other aspects, interviewees were asked to provide their perspectives on the relevance of Finnish higher education, reflect on practices that policymakers use to measure relevance, and share their perceptions regarding the role of state steering in driving relevance in higher education and preparing students for the labour market.

The interview data were collected with the help of a recording device and via means of note-taking. Responses were then transcribed, summarized and stored in an Excel database. Further, the data underwent a coding process – the step of “organizing the material into chunks or segments of text before bringing meaning to information” (Rossman & Rallis, 1998, p. 171). After organizing and categorizing the data into themes, deductive content analysis was applied to identify “recurring words” and “core consistencies and meanings” among responses (Patton, 2002, p. 452). Using a deductive approach is most appropriate in this case, since the data analysis has been guided by a predetermined analytical framework and research questions (Patton, 2002).


Validation of the study was carried out through the following procedures. Firstly, the interview questionnaire was designed in close consideration of the research questions and the analytical framework. Secondly, the data were checked for accuracy through a triangulation process – by comparing participants’ responses to the findings collected from the desk research. Thirdly, the instrument was validated through an external review of academic staff from the University of Applied Sciences Osnabrück, who have knowledge in the field and extensive experience with research methods. Lastly, a part of the findings was checked for validity and completeness by three experts who have worked in Finnish higher education for more than 10 years.


As far as reliability is concerned, a well-designed protocol was followed during data collection and data analysis (Yin, 2003). As regards the interviews, to reduce the risk of participant misfit, the majority of interviewees were contacted upon the recommendation of a professor from the University of Tampere, who had been familiar with their work and expertise. In addition, the topic and aims of the research were shared with the prospective participants prior to the interview, which gave them the option to opt out or if necessary, recommend someone else with more relevant knowledge and experience in the field. The data were organized in a database and coded according to predetermined themes, which were based on the interview questionnaire. Finally, responses were checked for accuracy, consistency and completeness by comparing the hand-written notes with the audio recordings.

Data analysis and findings

The major findings of this study can be summarized as follows:

Relevance, conceptualised as preparing students for sustainable employment, has grown in importance in Finland

In the Finnish higher education context, promoting relevance in terms of preparing graduates for sustainable employment has gained importance and visibility over the years. The need to strengthen links between higher education and employment and facilitate students’ transition to the labour market has been emphasized in the current government programme and in the policies of the Ministry of Education and Culture. In Finland, education is believed to deliver relevance when it succeeds in harmonizing the needs and expectations of all its stakeholders. Higher education needs to be relevant for students – by equipping them with knowledge, competences and skills for personal and professional growth; to employers – by responding to the needs of diverse and creative industries; and to society – by building and sustaining knowledge capacity.

The concern for graduate employability has been reflected in the policy levers of the government

The extent to which higher education contributes to preparing graduates for sustainable employment can and has been measured and accounted for in the Finnish policy agenda, yet with some reservations. Authorities use institutional, national and international data sources to evaluate the domestic and international performance of Finnish higher education on various aspects of employment (e.g., skills development, transition to working life, etc.), and the benefits higher education creates for students, graduates, employers, and other members of society. Some of these measures have been considered in the steering approaches of the government (e.g., graduates in employment, relevance of degrees to working life, degrees attained), while others are still in the proposal stage (e.g., qualitative aspects of employment) and are expected to be included in the future.

State authorities use a mix of regulatory, financial, information, and organisation levers to steer the inputs, processes (activities) and outputs of higher education towards enhancing graduate employability.

Steering through regulation takes place by means of introducing entry rules in favour of first-time applicants, requiring institutions to include external stakeholders on their governing boards, and accounting for cooperation with employers when auditing the quality management systems of institutions. These measures are in place to reduce multiple education, incentivise students to enter the labour market faster, and strengthen links between institutions and employers.
Steering through funding is done through performance agreements, performance-based funding and student financial aid. By providing sticks and carrots, i.e. monetary incentives to institutions and students, the government aims to reduce student time-to-graduation, accelerate graduates’ entry into employment, and encourage institutions to follow more closely the career progression of their alumni.

Measures to influence behaviour by sharing information relevant to employability involves the use of educational foresights, graduate career surveys, statistical portals with education and labour market data, websites for career guidance, and studies on employability. Education foresights appear to be particularly useful for policy development – they are used to set targets for the education supply and to identify the future skills needs of the labour market.

Steering through organisation takes place by means of influencing different organisational aspects, including those that relate to learning and teaching. Finnish state authorities set provisions on the aims of university degrees to enable institutions to focus on skills development and embed professional practice into the learning process. In addition, the government introduced a normative duration of studies to accelerate graduation and the transition to employment, set forth professional specialization studies to further the knowledge and skills of the working population, developed a national qualifications framework to integrate the needs of employers into qualifications requirements, and funded initiatives to strengthen study and career guidance inside institutions.

Regulation and funding are perceived as most effective in steering HEIs to deliver relevance

From the perspective of the interviewed stakeholders, of the four categories of policy levers, regulation and funding have been most effective in their capacity to steer higher education institutions to promote relevance. These instruments have led to improvements in institutions’ processes and outcomes. Institutions were identified to offer more opportunities for practice-based learning and more support for study and career guidance. Improvements were also identified with respect to shortening study time and accelerating graduation rates. Owing to the high level of institutional autonomy, regulatory measures have served mainly to guide institutions, without directly influencing the content of education. Funding was identified to be particularly effective as it has the capacity to operationalize relevance through measurable indicators and link them to the outcomes of institutions.

Mechanisms used to monitor and evaluate the outcomes of policies could be made more effective

Finnish education policies are monitored and evaluated by the government and government-affiliated agencies through implementation and evaluation plans, policy reviews, audit reports, commissioned studies, and international reviews. The interviewed stakeholders appeared to have some reservations regarding the effectiveness of these tools, noting in particular their limited capacity to assess the impact of policy instruments.
Policy levers are perceived to be somewhat limited in their effectiveness to promote relevance and facilitate students’ preparation for sustainable employment. They are believed to focus too much on the quantitative and too little on the qualitative aspects of employment, to rely highly on political factors, to overlook important areas in need of development (adult education), and to incentivise competition rather than cooperation between institutions. In addition, stakeholders believe that policies change too rapidly, which makes it challenging to evaluate their outcomes.


To improve the effectiveness of policy levers so they can promote relevance and foster closer linkages between higher education institutions and employers, the interviewed participants recommended devising more transparent mechanisms to plan and implement policies and also to evaluate their outcomes. They emphasised that policies, to be effective, must be devised in collaboration with all relevant stakeholders. Participants also recognised that the development of new policies must be informed by a careful assessment of former ones, and they must involve both ex-ante and ex-post assessment procedures. Lastly, participants emphasized the need to develop indicators that account for qualitative aspects of employment and incorporate them into the steering levers of the government.

Furthermore, to improve the reliability and completeness of this study, the following recommendations are proposed:

  • Consulting the academic and policy-related literature available in Finnish and Swedish to identify whether explicit definitions for relevance of higher education exist in the national context. Accordingly, the list of dimensions that refer to relevance as sustainable employment, as illustrated in this study, could be supplemented further.
  • Conducting a more profound investigation on the processes and stakeholders involved in the development of higher education policy.
  • Developing and testing alternative typologies to categorize and analyse policy levers. For example, policies could be classified and analysed in reference to e.g., their rationales and goals (e.g., enhancing the employability of certain groups), the stakeholders they target (e.g., institutions, students, employers, society), or the challenges that they aim to overcome (e.g., accelerating entry into the labour market).
  • Conducting an investigation on the links between policy levers, institutional strategies/practices and outcomes. This would provide insight into the indirect effects of steering – i.e. how policy affects institutional practices and how these practices influence the outcomes of higher education.
  • Finally, within the scope of this study, the effectiveness of policy levers was determined only based on the perceptions of the interviewed stakeholders. Thus, a valuable addition would be to consult the literature and/or to interview parties that are actually involved in the evaluation of education policy (e.g., the National Audit Office of Finland). This information could explain better the factors that enable or inhibit policy effectiveness.


Hundreds of pages read and highlighted, tens of thousands of words written and rewritten, tens of drafts revised – they have all been constituents of this enriching journey of inquiry. Although these elements have been important in the production of this study, even more valuable have been the support and guidance of those who stood by me in this journey, and helped me reach the light at the end of the tunnel.

Foremost, I would like to express my sincere gratitude to my supervisors, Prof. Dr. Hans Vossensteyn, and Mr. Bastian Thiebach, for their flexibility, guidance and continuous encouragement. Prof. Vossensteyn, a special thank you for giving me the opportunity to link my thesis to the work of a real project, and for reminding me to stay on track, and not diverge from my research focus. I would also like to acknowledge and thank Prof. Jussi Kivistö for kindly referring me to Finnish higher education professionals with knowledge and experience relevant to my topic, and my friend, Alex Reinig, for helping me produce a German translation of my abstract.

Secondly, I express my appreciation and thankfulness to all the participants for taking time to meet me and share their insightful knowledge both during the interviews and in the follow-up stages of the study. Your openness and genuine interest in my research gave me more confidence, motivation and inspiration to move forward. In addition, I want to recognize and thank Mrs. Johanna Moisio from the Finnish Ministry of Education and Culture, Mrs. Kirsi Hiltunen from the Finnish Education Evaluation Centre, and Mrs. Kaija Pajala, from the Centre for International Mobility, who graciously agreed to review my findings and took time to provide constructive feedback.

Thirdly, I wish to thank my dear friends in the MaRIHE-3 cohort for being such a strong support system throughout this 2-year journey, for helping me grow personally and intellectually, and for reminding me that true friendships are able to transcend the barriers of distance and time.

Fourthly, I am grateful to the professors and the administrative staff in the MaRIHE programme for introducing us to the world of higher education, for sharing their invaluable knowledge, experience, and networks, and for encouraging us to become active contributors to the higher education systems in our own countries.
Last but not least, I would like to thank my family for their unconditional love, trust, and support, and my father, in particular, for inspiring me to join him in his professional pursuit in the field of higher education.


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