How Far is the East? Educational Performance in Eastern Europe

When the Soviet Union collapsed a transition process started in Eastern Europe. This included a number of reforms to adapt the educational system to the new requirements of the job market. To assess the educational systems in Eastern Europe, this paper takes a look at the gap in PISA test scores between different countries. Using PISA 2006 data we disentangle the effects that explain the gap between Finland, the best performing country, and seven Eastern European countries, as well as, between Eastern European countries. The methodology applied in this paper is a semiparametric version of the threefold Blinder-Oaxaca decomposition, an approach which is not yet used in the research regarding the differences in school outcomes. Our results show that in all cases the differences in characteristics does not explain much of the gap. The return effect is the driving force of the differences in test scores. Under our identifying assumption, our results therefore indicate that the PISA test score gap can mainly be attributed to the different efficiency of school systems and are not due to better characteristics of students in a particular country. Furthermore, we provide evidence that the gap is smaller for better students indicating that, especially for poor performing students, the efficiency of Eastern European schools is behind the efficiency of Finnish schools.