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Smart investments in health and education are key to resilient recovery in emerging Europe and Central Asia

Des élèves dans une école à Carpineni (Moldova). En Europe et en Asie centrale, il est impératif d'investir dans un enseignement supérieur de qualité afin de permettre à la population d'améliorer sa compétitivité sur des marchés du travail en mutation rapide. Photo : PC/MERP Des élèves dans une école à Carpineni (Moldova). En Europe et en Asie centrale, il est impératif d'investir dans un enseignement supérieur de qualité afin de permettre à la population d'améliorer sa compétitivité sur des marchés du travail en mutation rapide. Photo : PC/MERP

As the COVID-19 pandemic continues to ravage countries worldwide, the long-term impacts on society remain unknown , but there is little doubt about the devastating impacts today on people’s health and education.

In Europe and Central Asia, the novel coronavirus has killed thousands of people, with countless survivors facing potential long-term damage to their health. And the rate of infection is increasing in many countries. Compounding the health challenges facing countries are major disruptions to education – with school and university closures leading to significant learning losses. In some countries, these losses are equivalent to as much as one full year of schooling.

As countries in the region explore how to recover from the crisis, governments are faced with tough choices and trade-offs between protecting people’s health today and safeguarding people’s employment opportunities in the future.

But can we learn from the recent past and can we use it to build a resilient recovery? 

If we just look at basic education and life expectancy – using pre-pandemic indicators – we can see that people in the Europe and Central Asia region start life in a much better position than their peers in other regions of the world. Of the 48 countries in Europe and Central Asia included in the latest Human Capital Index, 33 rank among the upper-third in the world, and 44 land in the top half.

Despite this relative advantage globally, however, more needs to be done to ensure all people are provided with health care and education systems that will enable them to reach their full potential. Just surviving is not enough, nor is simply completing basic schooling.

Adults need to remain healthy and active while simultaneously continuing to learn and acquire new skills throughout their entire lives. In Europe and Central Asia, it is especially important to reduce the health risks of obesity, smoking, and heavy drinking , which can weigh heavily on active and productive aging. And today’s job markets demand more than basic learning outcomes. Higher education institutions must prepare students for the challenges of globalization and technological change.

Our latest Regional Economic Update offers insights into overcoming these challenges. Across the region, more than 18 percent of the population are obese, nearly 23 percent are heavy episodic drinkers, and nearly 26 percent are current smokers. These health risks are particularly high in Eastern Europe and Russia, where adult life expectancy is also the lowest in the region.

Prevalence of such health risks increases not only the likelihood of conditions such as cardiovascular disease, but also the mortality and morbidity consequences of infectious diseases like COVID-19. While the impact on productivity of specific health conditions is difficult to estimate, the literature suggests that smoking and obesity can reduce an individual’s earnings by nearly ten percent and heavy drinkers can suffer even more, with an earnings reduction of up to 20 percent.

Gender differences are also important to note, and they are particularly stark for smoking and heavy drinking. In every country in the region, men smoke and binge-drink more than women, which puts them at higher health risk. In the South Caucasus countries, for example, the gender gap in smoking is close to 40 percentage points.

Investments in quality higher education can help people be more competitive in fast-changing, post-COVID labor markets.  Estimates suggest that the average return of an additional year of tertiary education for individuals can be as high as 15 percent more in wages. In the countries of the Western Balkans, Eastern Europe, the South Caucasus, and Central Asia, improving higher education would also help them retain their high-skilled labor force in the face of sustained out-migration.

Across the region, both attainment and quality of tertiary education increase with income levels. But there are outliers. For example, Russia‘s high degree of tertiary attainment and quality results in almost 2 years of quality-adjusted tertiary education for an average 30-34 year old, putting Russia among the top across the whole region, including the Western  European countries. But, at similar income levels, the share of Turkish adults with a tertiary degree, at about 30 percent, is less than half of that of Russia.  

Gender differences in education are more limited but, where they exist, they favor women. Hence, men need to catch up with women in most countries in the region, not only in health but also in education. Nevertheless, in every country, women are significantly less likely to study Science, Technology, Engineering and Mathematics (STEM). This choice has important implications, as holders of tertiary degrees in STEM fields tend to participate more in the labor market and earn higher wages.

For a truly resilient recovery, countries in the region should therefore adopt policies to address both the health and education challenges.  Improving health outcomes – by minimizing risk factors – can simultaneously boost livelihoods and lifespans. The most effective policies include those which raise the prices of non-essential items such as cigarettes and alcoholic beverages.

Improving diets and reducing obesity requires a somewhat different approach. Concerted efforts by governments and the food industry are needed to gradually reduce the salt and fat content of processed foods. We also need to do more to better understand the implications of gender differences in health risk factors, and whether gender-specific policies are more effective than population level interventions.

And a critical post-COVID challenge for the region is to be able to prevent, detect, and respond to public health emergencies, such as future pandemics, given the vulnerability of aging societies and the large number of people with underlying health risks. 

In education, it is crucial for countries to modernize basic education, improve the quality and relevance of post-secondary education, and address the equity gaps that persist at both levels. Post-COVID policy initiatives to improve education will also need to rise to the challenges posed by increased reliance on remote learning. Improving men’s education and increasing women’s career aspirations remain important challenges.

As countries continue to grapple with the unfolding challenges of COVID-19, they must remain vigilant in their commitment to preserving and expanding the health and education gains they have made in recent years.  Investing in human capital is vital to this agenda. By prioritizing investments that can help people achieve their fullest potential, policymakers in Europe and Central Asia can set their countries on the path toward healthier and more productive societies in a post-pandemic world.


Europe and Central Asia Economic Update


Anna Bjerde

World Bank Managing Director of Operations

Asli Demirgüç-Kunt

Former Chief Economist, Europe and Central Asia Region

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