The necessary next steps in Europe's education

policy

Univ.-Prof. Dr. Hardy HanappiAd personam Jean Monnet Chair

for Political Economy of European Inegration

University of Technology of Vienna

www.econ.tuwien.ac.at/hanappi/

hanappi@tuwien.ac.at

Overview

Recent crisis dynamics

Implications for Europe‘s Education Structure

Necessary Education Policy

Central Europe: Austria and Hungary

Welfare in the Long-run

1810

1820

1830

1840

1850

1860

1870

1880

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

0

5,000

10,000

15,000

20,000

25,000

GDP per CapitaTwelve Western European Countries

year

1990

Int

erna

tiona

l Gea

ry-K

ham

is d

olla

rs

Recent global capital accumulation

4 Jä

n 20

0528

Mär

...

15 J

un .

..2

Sep

200

522

Nov

...

14 F

eb .

..5

Mai

200

626

Jul

200

613

Okt

...

5 Jä

n 20

0728

Mär

...

18 J

un .

..7

Sep

200

727

Nov

...

19 F

eb .

..8

Mai

200

829

Jul

200

816

Okt

...

7 Jä

n 20

0930

-Mar

-...

Jun

18,

...

Sep

7,

2009

Nov

24,

...

Feb

10,

...

Apr

29,

...

Jul 1

6, 2

010

Oct

4,

2010

Dec

22,

...

Mar

15,

...

June

3,

...

Aug

ust

23..

.N

ovem

ber.

..F

ebru

ary

...

Apr

il 24

, ..

.Ju

ly 1

3, .

..O

ctob

er 2

...6000

7000

8000

9000

10000

11000

12000

13000

14000

15000Dow Jones Industrial (daily)

high

low

Motor of welfare increases

-4

-2

0

2

4

6

8

10

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

perc

ent

Growth of Labour Productivity

Germany

Italy

Spain

United Kingdom

France

Log. (Germany)

Log. (Spain)

Divergence in Europe 1

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Growth of Industrial Production

France

Germany

Greece

Italy

Portugal

Spain

United Kingdom

per

cen

t

Divergence in Europe 2

0

5

10

15

20

25

30Ja

n-20

07A

pr-2

007

Jul-2

007

Oct

-200

7Ja

n-20

08A

pr-2

008

Jul-2

008

Oct

-200

8Ja

n-20

09A

pr-2

009

Jul-2

009

Oct

-200

9Ja

n-20

10A

pr-2

010

Jul-2

010

Oct

-201

0Ja

n-20

11A

pr-2

011

Jul-2

011

Oct

-201

1Ja

n-20

12A

pr-2

012

Jul-2

012

perc

ent

Monthly Unemployment Rates

France

Germany

Greece

Italy

Portugal

Spain

United Kingdom

Divergence in Europe 3

-20

-15

-10

-5

0

5

10

% o

f GD

P

Current Acoount

Germany

Greece

Italy

Portugal

Spain

United Kingdom

France

Stagnating Wage Growth – Exploding Credit

European Education Structure

A rather stable structure – challenges from enlargement

0,0

20.000,0

40.000,0

60.000,0

80.000,0

100.000,0

120.000,0

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

1000

per

sons

Formal Education Levels in EU 27

level 6

level 5

level 4

level 3

level 2

level 1

level 0

Impact on education levels

Source: OECD

Some Key Findings 1In 2010, the average employment rate for individuals

with a lower secondary qualification was 65.3% for men and 46.9% for women across EU21 countries, while the average employment rate for individuals with a tertiary-type A (largely theory-based) qualification was 88.0% for men and 81.1% for women.

In faster changing economic environments education has to provide more general capabilities.

Some Key Findings 2Europe is the preferred destination for students

studying outside their country, with EU21 countries in Europe hosting 41% of all international students. Within the share of foreign students enrolled in EU21 countries, 76% of students come from another EU21 country.

Eliminating language barriers and legal difficulties is an important next step for European education policy.

Some Key Findings 3Redesign of European labour organization structure

(labour time and life time schedules including public child care etc.) is an integral part of education design.

A central fiscal authority of the EU is necessary to enable these deep structural changes.

Europe’s special capability as knowledge producer can secure its position in the global division of labor in the long-run!

Austria and Hungary 1

Can build on a great historical tradition – but recently experience a sharp economic divergence.

Austria faces a lack of tertiary education: need for finance. And more and better young teachers.

Austria and Hungary 2

Hungary is in a desolate economic situation and needs to overcome isolation – by opening to EU support.

Both should join a common EU vision of guaranteeing the reproduction of a sustainable welfare level – supported by a common education system

Hungary and Austria

• Longer education, later retirement

• Substantial shift in government expenditure components:

Less business and agriculture subsidies, more education expenditure • A Quantum Jump in A-H cooperation

Thank you for your attention !