Increase education to obtain high income in Europe and Central Asia.

Europe and Central Asia have excelled in universal education. With high enrollment rates, children in the area average 12.6 years of elementary and secondary education, just short of the maximum 14. Even more impressive, 40% of young people graduate from university, compared to 31% globally.

High Enrollment, Declining Quality
The region’s academic performance is declining despite high access and accomplishment. This is most visible in the reduction in standardized test results, such as PISA, which evaluates 15-year-olds worldwide. Math results across Europe and Central Asia have dropped by a year in the last decade. These tendencies threaten the region’s future labor and economy, which is concerning.

In our current ECA Economic Update, we warn that this quality decline will have catastrophic implications. Without rapid effort to reverse the decline—especially in higher education—regional nations will not be able to become high-income in the next generation or two.

The Education Problem
Weaker societal pressure to invest more and better in education, insufficient school infrastructure expenditure, poor teacher preparation, and obsolete curriculum contribute to education quality degradation. Labs and digital learning tools are scarce in many European and Central Asian institutions. Teachers with little professional development opportunities generally use lecture-based tactics that don’t engage pupils or cultivate critical thinking.

Vocational Education and Training efficacy is a major concern. Nearly 45% of upper-secondary students in the area and 80% in certain countries enter VET early. VET programs are typically advertised as a method to boost employability, especially for underprivileged students, but the data says otherwise. Despite their goals, these programs frequently fail to prepare students for a changing work market. This discrepancy casts doubt on such initiatives’ long-term influence on upward mobility and inequality.

The situation is worse at universities. Higher education is worse than predicted considering the region’s basic education (see Figure). Diplomas trump knowledge and talents. The Times Higher Education global rankings place just one European and Central Asian institution in the top 100 and nine in the top 500. “Academic capture,” when universities prioritize political or corporate interests above academic competence, insufficient financing, the proliferation of tertiary institutions, obsolete curriculum, and a lack of contemporary facilities are among the main reasons higher education is substandard.

European and Central Asian middle-income regions are concerned about lower-quality higher education. To become high-income, nations must switch from technology adoption to innovation-led development. This need world-class higher education institutions in nations. Since university graduates are more inclined to innovate, inadequate university education threatens the region’s long-term economy.

What Can Happen?

Restoring fundamental education quality is affordable. They include informing parents, administrators, teachers, and students about the educational system, supporting instructors with training and disciplined pedagogy, and teaching at the correct level, not grade. Raising the status of teaching and recruiting younger, more motivated instructors are crucial. However, bigger adjustments may be required, including VET system overhauls. This should involve increasing the selection age and promoting industry-educational cooperation. VET programs should be restructured if they cannot provide students with the skills they require in a changing work market.

Higher education quality can only improve with stronger administration, merit, and accountability. These include more competitive funding, student and teacher competition, and frequent examinations. Autonomy and competition boost university productivity. Merging research institutions with universities in distinct nations will improve quality and bring research closer to teaching.

High-quality education, especially tertiary education, is essential for innovation and economic progress. These essential ECA changes should have been done a decade or two ago. The second-best time is now.