their earlier investment in education. This gap increases in the first two or three decades, but then decreases and, towards the end of the period, the gap has almost disappeared. This trend should not be considered as lack of progress. On the contrary, once all young people achieve a desired (high) level of schooling, and this is maintained for all new cohorts, the difference in education between old and the young would disappear. However, an intergenerational education gap close to zero means that the region-wide average education will not increase. Some countries, notably the Russian Federation, are even experiencing a negative intergenerational gap in education: older cohorts tend to have more years of education than the young. Once the old workers retire, average education may go down.

Assuming that for each old worker exiting the labor market a new, young replaces him or her, the average education level of the labor force would increase in line with the trends shown in figure 2. In contrast, some high-income OECD and East European countries are either in a stable or even a downward trend in terms of educational attainment. Therefore, this education wave will not be uniform across regions, and developing countries will play the leading role in this process, especially those with demographic bonuses. For this reason, it is critical to add education by age cohorts, as well as important characteristics such as gender, as demographic dimensions in longterm prospective economic analysis (see Lutz, Goujon, and Doblhammer-Reiter 1998; Lutz and Goujon 2003).

Remarkably, the largest gap on years of education between generations is currently in regions that will contribute most to the growth of global working age population, namely LAC, Middle East and North Africa (MENA), SAR, and SSA. Moreover, the average years of schooling of young cohorts in these regions, still lag behind high-income countries (HIC), particularly SAR and SSA—even without getting into important issues related to quality. Results from the PISA test (OECD, 2015) suggests that the gap regarding education in developing countries is not only related to school attainment but more importantly to the quality of education when comparing the performance of students using standard tests. While 83% of students from households in the bottom quintile of income distribution in Singapore demonstrate the basic competencies in math, the corresponding numbers are below 20% for students from households in the bottom quintile of income distribution in Latin American countries (e.g. Colombia, Brazil, and Peru).

In addition to the younger generation becoming more educated than the older one, the magnitude of its effect on the supply of skilled workers is enhanced by a growing cohort’s size (of that working-age group). In a similar way to the previous figure, Figure 2 shows the intergenerational demographic gap. This is expressed as the ratio of the population size of two age cohorts: the young, aged 20 to 24 and the old aged 60 to 64. Note that these ratios vary both in levels and trends. For advanced economies, and ECA countries the ratio at around 2 is low and slightly declining in the period 1960-2010. This means that new younger cohorts are still larger 8