ISET Economist Blog

A blog about economics in the South Caucasus.

Quick and Dirty Decisions Are Not Always Smart!

When my mom was at my age (twenty-four), she already had a ring on her finger, a family, two kids, and a very clear idea about her life. I am not yet married, but I have already made at least one very important decision in my life – to become an economist. I made this fateful decision at 22, having tried myself in a banking job (that I hated). Many of my friends, however, are stuck with the educational and professional choices they have made very early in the lives, before knowing who they are and what they could possibly achieve.

I’ve always thought that getting married and making all kinds of important decisions early was our unique destiny in the South Caucasus (ok, maybe some other post-Soviet countries, too). I was therefore surprised to find out that in other, much more developed countries young people are also sometimes forced to “specialize” very early in their lives.


The Dutch schools have only two divisions, primary and high school. Children in the Netherlands usually start attending school when they are four years old. Primary school has 8 classes in total, so most students will be around 12 years old when they begin attending high school. Dutch high schools are further divided into three different levels that are decisive in terms of future occupational opportunities. Their official names are VMBO, HAVO and VWO, referred to as, respectively, the “low,” “middle,” and “high” diploma levels. At the end of their 8th year of school Dutch children must take a CITO test, designed to evaluate their overall “intelligence“. Parents and child are ultimately the ones who decide which one of the three is the best educational track for the child. Primary schools only advise them which one would have been the most appropriate for the child.

The VMBO takes 4 years and with a VMBO diploma, a student can continue his or her studies at the Middle Vocational Education (MBO) level, obtaining professions like administration, nursing, agriculture, the arts, and other ‘blue-collar’ jobs. The second level, HAVO, takes 5 years and prepares students to go to the Higher Vocational Education (HBO) level, where they can gain knowledge in physical therapy, applied sciences, pedagogy and accounting. HBO is focused on developing practical technical skills and prepares students to enter the labor market directly after graduation. The highest level, VWO, lasts 6 years. Having completed the VWO, one can go directly to a university.

At 31, Philip is a Master's student at Tilburg University in the Netherlands. He has spent the last 15 years of his life acquiring different types of specialized vocational and higher education only to understand that he wants to do something else and better in his life.

I learned Philip’s story when we met very recently at a summer school in St. Petersburg. As any other Dutch kid, when he was 12 he had to take an ability test (CITO) the results of which determined what kinds of educational programs he could enroll in. Not being the brightest student, his choices were limited to lower or middle level vocational education programs (VMBO or HAVO, in the Dutch lingo). He tried HAVO for two years, but was downgraded to VMBO. At 16, with a VMBO diploma, Philip’s choices were again limited: the fourth year of HAVO or a professional community college. He chose the latter, and found himself studying how to sell cars (‘sales management’ was the program’s official title). Four year later, at 20, he decided to go one step up and get an undergraduate degree (in “small business and retail management”) from a university of applied sciences in the Netherlands. After four more years, and an additional investment in math skills, Philip enrolled in a research university. He started his BA at the University of Tilburg at the age of 25, and at 31 is about to graduate with Master’s degree.

The road to Philip’s educational hell may have been paved with excellent intentions of Dutch education policymakers (to help people make the right educational choices early on in their lives). His tortuous path to a career may be an exceptional case, the result of a radical mismatch between one’s ability (as measured by formal tests) and expectations. Nevertheless, educational ‘profiling’ early on in children’s lives is certainly wrought with risks.


In economics theory, people are supposed to know what they want when faced with any choice. In reality, individual preferences are constructed in a sequential process of soul searching and self-discovery. In other words, people can only reveal their preferences by trying and experiencing different things, making mistakes and correcting them. This is known in the economics literature as preference construction theory. Preferences are constructed at the time of choice, based on prior experience.

This may be true about the choices we make when buying the next car or smartphone model. Yet, it seems to be particularly true in case of complicated educational and occupational choices. What young schoolboys and girls think they want to be at the age of 15 or 16 may be radically different from what they understand they want to be at 25. It follows that educational systems should be designed not to lock young people into rigid educational tracks (“car sales”) too early in their lives, before they fully understand their educational preferences. In fact, the system should allow for a trial-and-error experimentation with different subjects and vocational skills, allowing to move from one specializations to another over time.

Luckily, it took me less than 15 years to discover my own calling in life. For some people of my generation, however, this discovery may never come, or come very late, just like in Philip’s exceptional case. In both Georgia and Armenia, educational choices are made very early, at 17, when students take the Uniform National Exams. In addition to not knowing themselves, the majority are poorly informed about the quality of various educational programs on offer, as well as future labor market needs. As a result, students are often matched to the wrong educational programs and occupations, wasting many years of their life, public and private resources.



In Israel, students are usually over twenty (20-24) when they begin their university studies. Israel is exceptional in that it requires every boy and girl to go through a compulsory military service at the age of 18 (three years for boys, two for girls). The median age of Israeli students obtaining an undergraduate degree is 27, according to a 2015 OECD study. Yet, Israel has one of the best-educated populations in the world (ranked fourth among all OECD countries). About 46% of all Israeli adults hold at least an undergraduate degree, while the OECD average is 33%1.

Georgia and Armenia do not recruit girls into the military. Moreover, both countries allow their young male citizens to defer military service in case they enroll in a university or college. Thus, perhaps inadvertently, the military conscription systems in both countries are encouraging young males to make educational choices very early in their lives, at military service gunpoint.

A much superior option for both South Caucasus nations may be to introduce a short mandatory civil or military service (of, say, one year) for both girls and boys. Young people could be given the choice of volunteering options ranging from helping people with disabilities and elderly, to working in socially important enterprises, to military service. A year spent in service to the community would, on the one hand, allow people more time to mature, gain experience and get to know themselves. On the other hand, it represents a great way to learn basic civic virtues that are as important as professional skills, knowledge and information one acquires at a university.

1 Valle, R. C., Normandeau, S., & González, G. R. (2015). Education at a glance interim report: update of employment and educational attainment indicators. Organisation for Economic Co-operation and Development (OECD).

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Sunday, 09 August 2020

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