Meeting the Challenges of Secondary Education in East Asian and Latin American Countries

1. Meeting the Challenges of Secondary Education in East Asian and Latin American Countries Presentation for Kuala Lumpur Secondary Education Conference – September 19-21, 2005 (Emanuela di Gropello)

2. Objectives of the Study • 1) Examine the key challenges in the delivery of secondary education in EAP and LAC; • 2) Suggest a broad range of innovative strategies to expand and improve secondary education, with focus on: • a) Resource mobilization; and • b) Efficiency of service delivery.

3. Outline of the Report • Chapter 1: Diagnostic of Secondary Education in LAC and EAP countries • Chapter 2: Understanding Demand-side Constraints • Chapter 3: Improving Governance and Management Structures • Chapter 4: Mobilizing Resources • Chapter 5: Improving the Efficiency of Service Delivery

4. Diagnostic of Secondary Education in EAP and LAC countries – Chapter 1 • The chapter: • describes the stock of and flow of the quantity and quality of education in East Asia and Latin America countries; and • analyzes demand and supply-side constraints and opportunities (laying the ground for further analysis in chapters 2 and 3).

5. Structure of Secondary Education • Secondary education varies considerably across the countries studied. These differences include: • the age of entrance into secondary education (lower in LAC); • the duration of compulsory schooling (longer in LAC and upper-middle income countries); • the length of study (longer in EAP, with an average of 3.18 years in lower secondary and 3 years in upper secondary).

6. Secondary Enrollment in EAP and LAC • Latin American and East Asian countries have rapidly increased primary school enrollment rates to achieve near universal coverage. Average primary NER in LAC: 94%; EAP: 92%. • But secondary enrollment levels in many Latin American and East Asian countries are below typical levels given national income.

7. Secondary Enrollment Gap

8. Lower Enrollment in Secondary

9. Differences among Income Groups

10. Internal Efficiency in EAP and LAC: Over-age is an Issue • Over-age enrollment is a problem in all countries, but more so in LAC than EAP, as indicated by the GER/NER gap: • LAC: GER = 80%; NER = 62%; • EAP: GER = 70%; NER= 58%. • Over-age enrollment is related to income levels, more so in EAP than LAC.

11. Over-age is Pervasive in LAC

12. Over-age Lower at Higher Income Levels in EAP

13. Internal Efficiency in EAP and LAC: Low Completion Rates • Survival plots show that the likelihood of completing secondary varies substantially across countries, but is generally low, indicating further inefficiencies: • Cambodia: 10%; • Guatemala: 25%; • Indonesia, the Philippines, Vietnam, Mexico, Brazil: about 50%; • Thailand and Colombia: about 60%.

14. Low Survival Probabilities cambodia mexico vietnam brazil

15. Quality of Secondary Education: Varies across Regions and Income Group, Higher Percentage in Lower Proficiency Levels in Middle and Lower-Middle Income Countries

16. Quality of Secondary Education: Varies across Regions and Income Group, Higher Percentage in Lower Proficiency Levels in Middle and Lower-Middle Income Countries

17. Scores tend to be Lower in TVET Schools

18. Inequities in Educational Outcomes • Inequities between urban-rural location and income quintile exist in all countries, in terms of enrollment, timely enrollment and completion. • Inequities tend to be higher in LAC countries, with about three times as many youth completing secondary in the upper quintile than in the lower one in Mexico and Guatemala (almost comparable to Cambodia in EAP). • As enrollment increases, inequities have had a tendency to decrease in EAP countries, the evidence is less clear-cut in LAC.

19. Decreased Inequity in Completion Rates (Indonesia) 1998 2003

20. Persistent Inequity in Completion Rates (Mexico) 1998 2002

21. Main Challenges • Two inter-related objectives: • Expand Gross Secondary Enrollment, Net Secondary Enrollment and Completion, in an equitable way; and • Improve Quality and Relevance of Secondary Education.

22. Supply-side Constraints and Opportunities at the Macro Level • Primary graduates (a constraint in low-income countries). Primary completion rates < 70%. An opportunity in the others. • Timely primary completion (a constraint in all countries). • Quality of primary graduates (a constraint in several countries). • Demographic trends (favourable in most countries). Over the next decade, in all but five countries, total population will increase faster than the secondary school age population. For half the countries the secondary school age population will decline in absolute terms.

23. Demand-side Constraints and Opportunities at the Macro Level • Increasing demand for secondary education from labor markets: • With globalization comes a change in the type of labor demand, favoring those workers who have the skill sets developed through secondary education. • Innovation and technological advancement require a labor force with sufficiently advanced skills.

24. Demand-side Constraints and Opportunities: Labor Market Structures • A preliminary analysis of household surveys suggests that: • In most LAC and EAP countries, labor market composition is increasingly based on services/sales/trade (more true of middle-income countries), which require relevant skills learnt in secondary. • Share of wage employment is also increasing and associated with more than 9 years of schooling in all countries. • High rates of return (see Chapter 2).

25. Demand-side and Supply-side Constraints at the Micro Level • Low transitions between primary and secondary and sub-cycles of secondary in several LAC and EAP countries can suggest supply-side (access and quality) constraints. Transitions are more marked in rural than urban areas. • In all countries, between 20% and 50% of the youth are out of school at 15, suggesting demand-related issues, aggravated by over-age.

26. Understanding Demand-side Constraints - Chapter 2 This chapter analyzes household demand for secondary education, with focus on the two main determinants of household demand: • expected benefits (labor market returns to education); and • costs (with a focus on opportunity costs).

27. Demand for Education and Private Rates of Return: Substantial Returns • Private rates of return are higher than 8% in all EAP and LAC countries, slightly higher in EAP. • Rates of return increase with the education level in all selected countries, with higher returns for technical education and very substantial in tertiary. • Incentives to enroll vary according to the secondary modality. Rates of return are higher in TVET, but high returns in tertiary make general secondary attractive in middle-income countries. Importance of secondary-tertiary transition.

28. Increasing Returns by Level of Education

29. Demand for Education and Private Rates of Return: Heterogeneity in Rates of Return • Rates of return decrease with earning quintiles in lower-income or lower-middle income EAP countries, but increase across earning quintiles in upper-middle-income EAP countries and most LAC countries (providing little incentive to enroll for lower income people). • The differences per development stage can be explained by different labor market structure. • Increasing returns in LAC could be explained by lower quality of the education received by the lower quintile. Investing in quality education for the poor will be key to expand secondary enrollment of the poor in the region.

30. Rates of Return Vary per Income Quintile

31. Demand for Education and School to Work Transition • Opportunity costs can be a strong disincentive to continue and/or do well in school. Using detailed household survey data, the study will explore: • the extent, intensity, nature, remuneration of work in teenagers; • the interaction between schooling and work (age of transition to work, school and work, work only, school only, neither); • a characterization of working teenagers and their families.

32. Demand for Education and Private Costs of Schooling • Initial evidence shows that fees and indirect costs of schooling can be prohibitive for low-income households across the two regions. • Regional and development patterns will be identified and innovative interventions discussed. The LAC case has shown that demand-side financing has good potential to address opportunity and private costs (e.g. Oportunidades in Mexico, Bolsa Escola in Brazil or PACES in Colombia).

33. The chapter analyzes: Structure of Secondary Education Allocation of Functions and Decisions across Governments and Institutions Impact of Governance Structures Improving Governance and Management Structures - Chapter 3

34. Structure of Secondary Education and Implicit Governance Issues • Cycles (one vs. lower and upper, basic vs. lower and upper) • Public and/or Private Schools • General and Vocational Education • review the status and literature—developing countries & LAC/EAP; • analyze practices in light of the literature review and conceptual framework; • connect to demand side of the youth employment equation • structure of labor markets • match of demand for skills and what education system supplies • does demand justify significant increased investment and separate general and TVET cycles?

35. General and Vocational Education: Enrollment Shares • The average enrollment share in vocational-technical schooling for LAC is 9% (decreasing), while for EAP it is 11%. • Enrollment share relatively homogeneous in EAP, but large differences within LAC. • In high income countries, 27% of secondary schools students are enrolled in vocational education, vs. 2% in low income countries.

36. General and Vocational Education: New Trends • Traditionally, in LAC as in EAP, vocational schools have been separated out from general secondary schools. However, there is an increasing focus towards broader and more integrated curricula. • In LAC, vocational secondary education is decreasing but there is growth at the post-secondary level and an increase in industry based training, together with better integration secondary-tertiary (Colombia, Chile, etc). • EAP countries have put more emphasis on modernizing existing secondary vocational systems.

37. General and Vocational Education: Basic Labor Market Facts • With the exception of Argentina and Indonesia, unemployment rates for secondary graduates are below 20% in all countries (< average rate). • Unemployment rates tend to be lower for technical secondary graduates. • Between 30 and 70% of secondary graduates are wage employed. Shares are higher in middle-income countries. • A deeper analysis of demand for skills is needed as well as a cost analysis of alternative modalities.

38. Secondary Graduate Profiles

39. Allocation of Functions and Decisions Across Governments and Institutions • Relative spectrum of decentralization • Legal Framework & History • Different Models of Decentralization: to governments and/or schools • Government relations to private schools • Locus of Decision-making: focus on administration, personnel, & quality control • Implementation Issues: a. de jure vs. de facto b. Weak links in accountability chain

40. Relative Spectrum of Decentralization • In general, education systems in LAC are organized regionally or locally. In contrast, in EAP countries there is a tendency towards centralized administration of education. • Schools are decentralized responsibilities in both regions (more so in lower income LAC countries and middle or upper income EAP countries).

41. Locus of Decision-Making

42. Impact of Governance Structures: Focus on Decentralization and School Organization • Assessment of Accountability Relationships • School-Based Mgmt & School Committees • Legal Framework, powers & member selection • Analysis of decision-making • Impact of Decentralization on Outcomes • Cross-country setting • Individual case studies

43. Evidence on School Based Management from PISA 2000 and 2003 Analysis • School autonomy generally higher in Honk-Kong and Thailand than in the selected sample of LAC countries. • School boards have slightly larger roles in LAC. Principals and teachers have slightly larger roles in EAP.

44. Decision-Making Autonomy within Schools: Varying Role of the Different Actors

45. Evidence on School Based Management from PISA 2000 and 2003 Analysis • Autonomy in teacher management positively related to achievement in LAC, but not EAP. • Autonomy in texts and course contents positively related to achievement in EAP, but not LAC. • Accountability argument more important in LAC; but local informational advantage argument more important in EAP.

46. Mobilizing Resources – Chapter 4 • This chapter: • estimates resources needed to expand secondary education coverage and financing gaps given current expenditure levels, secondary targets and growth prospects; • analyzes rationale for public versus private intervention in financing the expansion of secondary education; and • analyzes alternative options to raise resources for secondary education.

47. Lack of Priority on Secondary Education, more so in LAC than EAP • Within each region countries differ drastically, but the two regions are facing similar types of challenges: increasing gross enrollment rates and expenditure on secondary education. • Expenditure on secondary education is low in terms of GDP and per student in both regions (more so in LAC than EAP). • It is low for expenditure per student as a percent of GDP per capita in LAC, while high in EAP. • These ratios are lower in low income countries.

48. Secondary Education Shares in terms of GDP are still Low

49. Primary 7,000.00 Secondary 6,000.00 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00 - Low Lower- Upper- EAP LAC OECD income middle middle income Average income Expenditure per Student in Secondary is much Lower than OECD average

50. Per Student Expenditure $8,000 30 Per Student expenditure as % of per $7,000 capita income 25 $6,000 20 $5,000 % of GDP per capita PPP $4,000 15 $3,000 10 $2,000 5 $1,000 $0 - Low income Lower middle Upper EAP LAC OECD income middle Average income But Secondary Expenditure per Student in Percent of GDP per capita is High in EAP