In vocational education, employers often play an important role in providing on-the- job training for employees and in financing training in vocational schools. Governments try to encourage employers' involvement in order to save public funds and to link vocational education to the needs of the labor market. Specific work skills are best developed through training during employment, especially in jobs involving substantial technological change.

Public financing of vocational training is generally considered justified when employer training capacity is weak (as in small and medium-size firms) or absent (as with retraining for unemployed workers). High-quality general pre-employment education is the best guarantee of an individual's ability to learn new skills throughout a career and of employers' willingness to invest in that individual's professional training. Most important, employees must be able to communicate clearly in writing and to use mathematics and science skills to diagnose and solve problems.

Attending primary school helps children acquire basic literacy and numeracy as well as other knowledge and skills needed for their future education. In low-income countries primary education in itself often improves the welfare of the poor by making them more productive workers, enabling them to learn new skills throughout their working lives, and reducing the risk of unemployment. In addition, primary education- especially for girls and women- leads to healthier and smaller families and fewer infant deaths.

Despite rapid growth in the number of children of primary school age, since 1970 developing countries have succeeded in sharply increasing the percentage of children enrolled in primary school (Figure 7.1). But universal primary education, a goal being pursued by most governments of developing countries, is still far from being achieved in many of them (see Data Table 2). Low enrollments in many low-income countries may signal inadequacies in education system capacity as well as social conditions that prevent children from enrolling.

Because economic and social returns to society are known to be higher for primary education than for other levels of study, most governments are committed to providing free access to primary school to all children. But in low-income countries the public funds available for this purpose are often insufficient to meet the increasing demand of rapidly growing populations. These funds also tend to be allocated inequitably, with better education opportunities often provided to urban children relative to rural children, to well-off children relative to poor children, and to boys relative to girls. In some countries public financing of education favors the higher levels of study, benefiting mostly older, better-off children and thus exacerbating social inequity.

Even when primary education is accessible, poor children may be unable to benefit from it. Many of these children must work rather then attend school. Premature and extensive involvement in work damages their health and impedes development of their social skills, decreasing their future earning power as adults and perpetuating the vicious circle of poverty.

In addition, primary school enrollments are generally lower for girls than for boys. This gender gap is widest in South Asia, the Middle East, and Sub-Saharan Africa. The gap reflects cultural norms, early child- bearing, limited employment opportunities for women, and traditional expectations of girls' larger contribution to household work. As a result, of the 900 million adults in developing countries who are illiterate (nearly one in three), almost two-thirds are women (Figure 7.2).

Note that child labor is known to be a poverty issue- that is, its incidence declines as per capita income rises. That means that further economic growth will tend to remove this obstacle to universal primary education. By contrast, gender disparities in school enrollments are not correlated with overall living standards, so countries do not just "grow out of them." Narrowing the gender gap requires supportive national policies, such as reducing the direct and indirect costs of girls' schooling for their parents and building more schools for girls in education systems that are segregated by sex.

In most developing countries enrollment in secondary schools is much lower than in primary schools (see Data Table 2). Although the situation has been improving over the past few decades, on average less than 60 percent of children of secondary school age in low- and middle-income countries are enrolled, while in high-income countries secondary education has become almost universal (Figure 7.3).

Among the world regions, Sub-Saharan Africa has the largest share of children not enrolled in secondary school. Check Data Table 2 for the indicator of child labor incidence- that is, the percentage of children ages 10-14 who work. Note that this indicator is highest in Sub-Saharan Africa too. Child labor remains the most formidable obstacle to education for children in low-income countries. According to available data, almost one-third of children 10-14 are in the labor force in low-income countries (excluding China and India), while in many Sub-Saharan countries this proportion is one-half. In fact, the situation may be even worse- in many countries data on child labor are underreported or not reported at all because officially the problem is presumed not to exist.

The gap between developed and developing countries is particularly wide in tertiary education. In high-income countries tertiary enrollments have increased rapidly since 1980, but in low- and middle-income countries they have improved only slightly (Figure 7.4 and Data Table 2).

The number of students enrolled at a level of study does not indicate the quality of their education and thus provides only a rough idea of a country's educational achievements. To generate economic returns, education and training have to meet the ever-changing demands of the labor market- that is, they have to equip graduates with the knowledge and skills needed at each stage of a country's economic development. For example, countries moving from planned to market economies usually need more people trained in economics and business management to work in emerging private sectors as well as in reformed public sectors. Today's information revolution requires more people with computer skills, and globalization (see Chapters 13 and 14) has increased the demand for foreign language skills. Overall, innovative people are needed everywhere, and an education system that fails to develop this quality in its graduates can hardly be considered fully effective.

Figure 7.5 illustrates some differences in the quality of education between countries with transition and with established market economies. Relative to their counterparts in Canada, France, Israel, and the United Kingdom, children in Hungary, Slovenia, and the former Soviet Union were better at demonstrating their knowledge of facts but worse at using that knowledge in new and different circumstances. In a competitive market economy, graduates who lack innovation and problem-solving skills run a higher risk of becoming unemployed and poor.

Investing in education is not only an important way to build a nation's human capital and to improve its prospects for economic growth and higher living standards. It also has a value in its own right because education broadens people's horizons and helps them to live healthier, more financially secure, and more fulfilling lives. This is why experts use data on literacy, for example, as an important indicators of the quality of life in a country.