Access to Education for the Poor in Europe and Central Asia : Preliminary Evidence and Policy Implications

In Europe, and Central Asia, the poor faces three problems: 1) the education system as a whole does not work well, and hence fails to meet adequately their needs; 2) the private cost of education has gone up, so that "education", as a commodity, competes with other consumption goods in shrinking household budgets; and, 3) the perceived benefits of education (in terms of higher wage earning) are still low, thereby undermining long-term incentives to invest in education. The paper shows the discrepancy between Central European, and Former Soviet Union countries in the contribution of "education" for explaining wage earnings inequality. The discrepancy can be explained by factors such as the degree of private sector development, and the flexibility of the labor market. Although there remains a "taste" for education in Europe and Central Asia, there is also a risk that low-income groups, drop out of the education system, and irreversibly fall into poverty.