Introduction

This introduction provides an overview of the macroeconomics of education in Europe. Most of the bigger countries in Europe, including France, Germany, Italy, Spain, and Poland, have relatively inefficient labour markets and are plagued with high unemployment rates and low participation rates particularly among the less educated. In a rapidly evolving macroeconomic context, more adaptability of individuals and institutions is needed to preserve living standards and the welfare state. In particular, Europe should invest more in human capital, which is in the long-term the only source of growth and better living standards and, at the same time, cohesion. The introduction discusses these links and shows that, in some dimensions, European education is under-funded as compared to the US. The report does not intend to provide an exhaustive analysis of these issues. Instead, it aims at taking stock of economic literature on the subject, and at providing some useful policy guidelines.