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2020/09/30 / Erste Group Research

CEE Special | Challenge no. 7 Education


Education is the seventh report from the series titled "CEE - 10 challenges for the new decade". The issue of education is an important matter that seems to play a role in productivity and economic growth. Since its transition, the CEE region has improved significantly in terms of educational attainment supporting convergence story. While CEE has improved in terms of educational attainment, quality of education should remain policy focus. Especially, higher educational attainment is also correlated with better employment prospects (lower risk of being unemployed) and a wage premium. With technological change, demand for highly-skilled workforce is also likely to grow.

We touch the issue of how well the skills of the workforce match employers’ demand in CEE. Not only may the lack of high cognitive skills in the population be a problem (high unemployment, reduced productivity), overqualification can be as well. According to OECD estimates, improvement in numeracy proficiency by one standard deviation (around 56 score points; OECD mean at 262) would increase wages by 8% in CEE and an increase in years in education by one standard deviation (roughly three years) would increase wages by 22%. Being overqualified for the job means that workers in CEE earn roughly 15% less on average than their well-matched counterparts.

The CEE region still lags behind the EU not only in terms of the share of people with tertiary education, but also in terms of quality of education. The highest-ranked universities in the region are between 401 and 500 in the world ranking. Further, the region lags behind in terms of participation in early childcare, which is believed to have a long-lasting (well into adulthood) positive impact. This impact is also the biggest among socially disadvantaged groups, such as the Roma population, which remains a challenge for Slovakia, for instance.


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General information

AuthorErste Group Research
Date2020/09/30
Languageen
Product nameCEE Economies Special Report
Topic in focusFX, Macro/ Fixed income
Economy in focusCroatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia
Currency in focusCroatian Kuna, Czech Koruna, Euro, Hungarian Forint, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-
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