1. The World Bank Gordon Betcherman World Bank Education as a Strategic Investment Conference February 14, 2009 Education as an Investment Competencies, Jobs, and Growth

2. The World Bank 2 2 Serbia’s employment rate lags well below successful transition countries and EU targets Lisbon target

3. The World Bank 3 3 Currently, skills are not the major barrier to growth and jobs… % of firms that reporting as a significant constraint BEEPS 2005

4. The World Bank 4 4 So why worry about skills?  Experience of EU new member states  Already some evidence of shortages in Serbia  Labor market rewards skills  Education combats social and economic exclusion  Population aging Interplay of skills and innovation is key to Lisbon Agenda

5. The World Bank 5 5 Skills will become a more important barrier with further development % of firms that reporting as a significant constraint BEEPS 2005

6. The World Bank 6 6 Modern firms demand higher skills Percentage of workforce with tertiary education “Modern” firms “Traditional” firms

7. The World Bank 7 7 Education leads to better labor market outcomes Education leads to better labor market outcomes Adjusted wage premium relative to basic education Non-agriculture workers under 35

8. The World Bank 8 8 Early investments are the most critical Source: Heckman and Masterov

9. The World Bank 9 9 Skills can bring marginalized into the labor market Labor market status of Czech Roma

10. The World Bank 10 The World Bank 10 Aging places a premium on education % Population Change, 2000-2025

11. The World Bank 11 The World Bank 11 Most workers in EU need to be prepared to do non-routine tasks Proportion of all workers reporting to be…: