Economic surveys and country surveillance

Economic survey of Germany 2008: Improving education outcomes


Contents | Executive summary | How to obtain this publication | Additional information

The following OECD assessment and recommendations summarise chapter 4 of the Economic survey of Germany published on 9 April 2008.



Education has a vital role to play in lifting potential output and securing social sustainability

Improving education outcomes would enhance productivity and employment prospects and, if distributed more evenly, reduce income inequality. The authorities have implemented wide ranging reforms in recent years to improve education outcomes and further reforms are planned. These reforms concern the whole spectrum of education, from early childhood education and care to continuing education. Nevertheless, there remains considerable scope for further improvements in education outcomes:

  • The main problem to overcome in student achievement is that socio-economic and/or immigrant backgrounds have a large impact on outcomes. While average education achievement is satisfactory – scores in the 2006 PISA study were above average in science (Germany ranked 8th among OECD countries), and average in reading and mathematics (ranked 14th in both subjects) – there is no reason why Germany should not aim higher, especially in the subjects where performance is average.
  • Tertiary attainment is low among younger generations – it is 22% for the 25 34 age group, compared with an OECD average of 32%; post-secondary non-tertiary graduation rates are, however, approximately 8 percentage points higher than the OECD average. While the increase in tertiary graduation rates in recent years will lead to future increases in tertiary attainment, the rise in graduation rates in most other countries has been greater, suggesting that tertiary attainment in Germany will fall even further behind the levels in most other OECD countries.

The areas of education policy that most directly impact on these problems concern early childhood education and care, teaching quality, school structure, and tertiary education. While vocational education and continuing education are also important for human capital development, they are not taken up in this Survey as they are less closely related to the specific achievement and attainment issues identified above and have been or will be reviewed in other OECD publications.


Tertiary graduation rates
Per cent

Note: Tertiary-type-A programmes provide qualifications for advanced research or higher skill professions. Tertiarytype-B programmes focus on practical, technical or occupational skills. Data are not available for all countries for earlier years.
Source: OECD (2007), Education at a Glance 2007: OECD Indicators, OECD, Paris.


To improve student achievement and reduce the impact of socio-economic and/or immigrant backgrounds, further education reforms are needed

International evidence shows that early childhood education and care has a significant effect on learning in subsequent stages of education, especially for children from lower socio-economic backgrounds. In recognition of these effects, the authorities have embarked on reforms to improve its quality. Integrated education programmes for children aged 0 6 have been or are being implemented. Measures are also being taken to identify children with inadequate German language skills, most of whom are immigrants, and provide them with intensive language training so that there is less of a risk of poor language skills being an impediment to learning when children start primary school. These policies would be more effective if more children from lower socio-economic backgrounds attended kindergarten and did so earlier. As fees are generally waived for children from poorer households, the lack of participation is unlikely to reflect affordability issues. The authorities should find out more about why parents with low levels of education put less weight on participation in early childhood education and care than do other parents so that effective strategies can be identified for raising participation of these children in kindergarten from three years of age onwards.

Most current research also suggests that teacher quality is very important in determining student achievement. The difficulty in raising teacher quality is that it does not appear to be related to most common measurable teacher characteristics. In view of this difficulty, the most effective approach to raising teaching quality would appear to be to give schools autonomy to decide how to achieve education goals and to hold educators responsible for outcomes. Such an approach enables school leaders to identify and promote high quality teaching.

  • It is important to make educators more accountable for delivering high quality education to every child and to put in place the structures needed to support this development. Germany has recently made considerable progress in clearly establishing high achievement goals for students. The Kultusministerkonferenz agreed national education standards in 2004, which have already been implemented in all Länder, and evaluation instruments for ensuring compliance with these standards in 2006. Accountability of individual schools and teaching staff is being strengthened through greater use of external exit exams centralised in each Land. Such exams will have been introduced in all Länder but one that did not have them by 2008. In view of the relatively poor achievement of weaker students by international comparison, it will be important to hold individual schools and teachers more accountable for the progress of all students and to provide individualised support to weaker students to bring them up to the required level quickly, as occurs in Finland. Greater use of financial incentives for good teaching based on adequate evaluation of performance could also help to raise teaching quality.
  • School leadership has an important effect on student learning. Traditionally, school principals in Germany have not played a very significant management role. While this is starting to change – new laws give schools greater autonomy and responsibility in the areas of school development, quality assurance and evaluation – there is still scope to strengthen selection and development of school principals as effective leaders.

International empirical studies also tend to find that socio-economic background has a larger impact on education outcomes in countries, such as Germany, that have highly stratified education systems. There is also some evidence that early tracking is associated with a greater impact of socio-economic background on education achievement across German Länder. To reduce this impact, Länder should consider delaying the first tracking decision to beyond age 10, the age at which this decision currently occurs in most Länder. This could help to reduce the influence of socio-economic background on tracking decisions. Permeability between education tracks should also be increased so that tracking decisions that do not reflect a child’s subsequently revealed academic ability can be more easily corrected. Länder that have not already done so should also consider offering the track leading to the Hauptschule leaving certificate, which generally caters to the least academically able students, together with the track leading to the Realschule certificate, which generally caters to the middle ability group of students, in one school type. This could help to reduce the impact of socio-economic background on outcomes by reducing social segregation between schools and avoiding the risk of very weak students being grouped together in a school type (Hauptschule) with low achievement expectations.

Making tertiary education more attractive and responsive to labour-market requirements would help to increase the tertiary graduation rate

According to a recent OECD study, the low tertiary graduation rate in Germany appears to reflect low internal rates of return on university education and limited university autonomy concerning input and output decisions, amongst other things.

  • The low rates of return found in this study are attributable to low gross wage premiums per year of tertiary education and to a relatively progressive income tax system. The move to the two-tier (Bachelors/Masters degree) Bologna system, which now covers about 60% of university programmes and should cover almost all of them by 2010, should help to increase internal rates of return on university education by shortening programmes, focusing them more on occupational qualification, and reducing dropout rates, which are currently high, albeit slightly below the OECD average. The impact of the progressiveness of the income tax system on incentives to acquire tertiary qualifications should be taken into account, amongst other factors, when making future decisions about the appropriate degree of progressivity in the tax system.
  • Autonomy over inputs is being increased in some Länder by giving universities the right to select students; this measure should also contribute to reducing dropout rates, raising expected internal rates of return on university education. In addition, universities in some Länder have recently been given the right to set low tuition fees (€ 300 500 per semester) accompanied by student loans. The Länder that have not already increased their universities’ input flexibility should consider doing so.
  • Output flexibility is being increased by the introduction of shorter courses in the context of the Bologna system, and by further easing numerus clausus restrictions. To assist the Länder to reduce the numerous clausus restrictions, the federal government has entered into the “Higher Education Pact 2020” with them in order to finance an expansion in the number of study places. A constraint on there being an adequate number of university places in Germany is that there is the free-rider problem that the Land that finances a graduate’s university education is not necessarily the one that receives taxes on his/her subsequent earnings. A solution to this problem that should be considered is for universities to charge notional tuition fees on a cost recovery basis that are repaid out of tax receipts in the Land where the graduate subsequently works.

The federal government together with the Länder also finance a variety of programmes to improve access to university studies of persons from less favourable socio-economic backgrounds. While these measures are helpful, the most effective approach to improving access of such persons to university studies is to reduce the impact of socio-economic background on achievement at earlier stages of education, as discussed above.


How to obtain this publication                                                                                             

The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations.

Eine Druckversion des Policy Brief in deutsch (pdf Format) kann ebenfalls heruntergeladen werden. Es enthält die Gesamtbeurteilung und die Empfehlungen, aber nicht alle oben gezeigten Grafiken.

The complete edition of the Economic survey of Germany 2008 is available from:

Additional information                                                                                                     


For further information please contact the Germany Desk at the OECD Economics Department at The OECD Secretariat's report was prepared by David Carey, Felix Hüfner and Nicola Brandt under the supervision of Andreas Wörgötter. Research assistance was provided by Margaret Morgan.




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