Chapter A begins by examining graduation rates in upper secondary and tertiary levels of education ( Indicators A1 and A2 ). These indicators speak both to the institutional and the system-level output of education systems. To gauge progress in educational output, current graduation rates are compared to the educational attainment of older persons who left the education system at different points in time.

Countries' progress is also reviewed in closing the gender gap in educational attainment and graduation rates, both overall and across different fields of education ( Indicators A1 , A2 and A4 ).

Dropout and survival rates ( Indicator A2 ) provide some indication of the internal efficiency of education systems. Students leave educational programmes before their completion for many reasons - they realise that they have chosen the wrong subject or educational programme, they fail to meet the standards set by their educational institution, or they may want to work before completing their programme. Nevertheless, high dropout rates indicate that the education system is not meeting the needs of its clients. Students may find that the educational programmes do not meet their expectations or their needs in order to enter the labour market, or that the programmes require more time outside the labour market than they can justify.

Counting the numbers of graduates alone does not inform us about the quality of learning outcomes. To address this, Indicators A5 and A6 reflect the reading, mathematical and scientific literacy of 15-year-old students both with regard to the relative performance of countries and to the equality of learning outcomes within each country. Reading, mathematics and science are viewed as important basic skills in all OECD countries, and student assessments in these areas therefore provide essential indicators for gauging the quality of educational performance. Nevertheless, there is a growing acknowledgement that there are a much wider range of competencies that are important for the success of individuals and societies. Indicator A8 begins to address this with a comparative review of civic knowledge and attitudes of 14-year-olds.

Indicators A5 and A6 show that, in most countries, there are considerable differences in performance within each education system. This variation may reflect differences in school and student backgrounds, the human and financial resources available to schools, curricular differences, selection policies and practices, or the way that teaching is organised and delivered.

Some countries have non-selective school systems that seek to provide all students with the same opportunities for learning, and allow each school to cater to all levels of student performance. Other countries respond to diversity explicitly by forming groups of students of similar performance levels through selection either within or between schools, with the aim of serving students according to their specific needs. Other countries combine the two approaches. Even in comprehensive school systems, schools may vary significantly in response to the socio-economic and cultural characteristics of the communities that they serve or their geography. Indicator A7 sheds light on such performance differences between schools and the factors to which these relate.

Students come from a variety of socio-economic and cultural backgrounds. Schools must therefore provide appropriate and equitable opportunities for a diverse student body. Diverse backgrounds and interests can enhance a learning environment but heterogeneous levels of ability and differences in school preparedness increase the challenges of meeting the needs of students from very different socio-economic backgrounds.

To pursue this policy issue, Indicators A9 and A10 examine the relationship between student performance in reading literacy and their parents' occupational status, place of birth and the language spoken at home. Although these characteristics do not lend themselves directly to educational policy, identifying the characteristics of the students most likely to perform poorly can help educators and policy-makers locate areas for policy intervention. If it can be shown that some countries find it easier than others to accommodate different background factors, important policy insights can be generated and used in other countries.

As levels of skill tend to rise with educational attainment, the social costs incurred when those with higher levels of education do not work also rise; and as populations in OECD countries age, higher and longer participation in the labour force can lower dependency ratios and help to alleviate the burden of financing public pensions . Indicators A11 and A12 examine the relationship between educational attainment and labour force activity, comparing rates of participation in the labour force first, and then rates of unemployment. Markets also provide incentives to individuals to develop and maintain appropriat e levels of skills through wage differentials, especially through higher earnings for persons completing additional education.

Acquiring higher levels of education can also be viewed as an investment in human capital, which includes the stock of skills that individuals maintain or develop, through education or training and then offer, in return for earnings, on the labour market. The higher the earnings from increased human capital, the higher the returns on the investment and the premium paid for enhanced skills and/or higher productivity. Indicators A13 and A14 seek to measure the returns to education for individuals, in terms of higher earnings; for taxpayers, in terms of higher fiscal income from better educated individuals; and for economies more generally, in terms of the relationship between education and economic growth. Together, these indicators shed light on the longer-term impact of education for individuals and societies.