Cuba’s Fidel Castro once famously said about his country: “Even our prostitutes have university degrees”. While we don’t know about prostitutes, something similar could be said about Georgia. Virtually all Georgians have university degrees, and, as every frequent user of taxi services knows, there are Georgian taxi drivers who have two of them. Yet Georgia’s permeation with human capital is even more impressive than in Cuba because Cubans were sent to schools by government command, while Georgians chose to become so literate just by their own motivation.

Like in Cuba, also in Georgia unemployment is ravaging, despite the abundance of human capital. While in Cuba this is easily explained by a largely dysfunctional economic system, it is more difficult to understand while in Georgia the high average level of education does not translate into employment. This is even more puzzling as it is a consensus among experts that human capital is one of the major building blocks of economic success, in particular for countries that are not richly endowed with natural resources. As the American education economist Eric A. Hanushek summarizes in one of his articles: “Nations that do better at school grow faster than other nations”.

There are three, mutually non-exclusive explanations for the Georgian calamities. Maybe there is simply not enough demand for qualified personnel.  If one adopts this point of view, even better schools and wiser educational choices would not solve the problem. Alternatively, the general demand for people with professional expertise is not the binding constraint, but it is rather a shortage of demand in those areas where job seekers have their skills. This problem is usually called qualification mismatch, the phenomenon that education people obtain does not match with the demands of the economy.  Finally, there is the possibility that human capital in Georgia is of inferior quality.

Let us dismiss the first explanation. While it receives a lot of attention in the public debate, it is fundamentally flawed. Namely, to say that a lack in the demand for skills is caused by a general lack of demand for labor is confusing cause and effect. If the quality is low and there is a qualification mismatch, it is likely that the high unemployment rate is a symptom of the problem and not one of its causes.

So, let us discuss the other two possibilities.

CHOOSING THE RIGHT EDUCATION

Making the right educational decisions is difficult for people at a young age. I made my first choice in this regard when I was 16 and decided that I wanted to become a lawyer. After I started studying, I became disenchanted with law, and two years later I switched to economics. This turned out to be the right subject for me, and so – except for a loss of two years – the story had a happy end.

Yet in general, it is a problem that people at the age of 16 are required to make such far-reaching decisions about their future. Still being children, they typically do not know their own strengths and weaknesses, nor do they always know their own preferences. Even less are they informed about the current situation in the job market and about relevant long-term economic trends. What is left for guiding their decisions are role models (“my uncle became a lawyer and I want to be like him”) or opinions of friends and family members who are often equally uninformed.

Two straightforward possibilities to approach this problem would be to have more years of schooling and/or to increase the age at which children enter school. Older school graduates will be less prone to choosing the wrong subjects.

Measures of this kind are about to be enacted in Georgia. The ministry of education and science will adopt a new law according to which the school entry age becomes 6 (it will be forbidden to start education at the age of 5). Also, by reforms made in the years 2008 and 2009, instead of 11 years there are now 12 years of schooling obligatory.

Both laws were hotly debated, and the discussion has not fully ceased. Parents tend to think that when their children know how to read and write and do some mathematical calculations, they are ready for school. This, however, is an erroneous view. In September 2013, almost 130 British educational experts signed a letter that called for school entry ages of later than five. The letter goes so far as to say that early school entry ages can cause “profound damages” to the children. According to a study by the Institute of Social Studies and Analysis (ISSA), children at the age of 5 cannot deal with the psychological pressure school entails. This may cause those children to adopt a profoundly negative attitude towards the school that can hardly be corrected in later years, potentially leading to reduced learning performance in the very long run.

Also, the transformation to 12 years of schooling has the effect that people are more mature when they make their educational decisions. However, here the issue of quality comes into play. During their last year at school, most pupils prepare themselves for the unified university entry exams by missing school classes and taking private lessons instead. It should be the opposite! The last years of school should be the most relevant for pupils, as they are in an age when they can be exposed to more advanced material that is closer to the university level. In the last years of schooling, attending classes should be the best preparation for the admission exams and for the subsequent studies. In Georgia, we are very far from that.

In addition, it might be useful to provide qualified consultancy to school graduates. To that end, introductory lectures about the different subjects, their curricula, and the job chances they offer, ought to be delivered in the schools by university professors and professionals in the fields.

Finally, in Georgia, there is a somewhat detrimental expectation that young people directly enter university after finishing school. In countries like Israel, most school graduates, regardless of gender, go to the army for some years. Afterward, most of them do extensive traveling for one or two years. Eventually, many Israelis enter university at an age around 25, but in the meantime, they became mature and are more likely to be serious students in the right subjects.

QUALITY PROBLEMS

A school system that is largely abandoned by its pupils in the most important last years of schooling has an obvious quality problem. Some of the flaws are obvious, for example, the class size. In classes of Georgian public schools usually sit between 30 and 40 pupils, and due to this huge number teachers cannot stop pupils’ chatting at the back of the classroom and they often fail to motivate the class. Even for those pupils who are really interested to learn something, it becomes impossible to concentrate and follow the lessons under such circumstances. Given the low salaries in the educational sector, it would not cost too much to tackle this problem.

Another obvious issue is the quality of teachers. Enthusiastic and energetic individuals are needed at schools, yet in Georgia, since salaries are so low, anybody with other opportunities will avoid becoming a teacher. The table shows average teachers’ salaries in selected countries, and one can see that Georgian teachers earn on average 12 times less than what they make in other countries. Even if one takes into account different general income levels in these countries, a staggering discrepancy remains.

To increase the quality of human capital in Georgia one, first of all, has to increase teachers’ salaries. Then, in the long run, we can hope for education that matters.