098 Liberal : A Way Forward Education and Inequality: Liberating Schools in

PETAR GANEV Liberal Education: A Way Forward 099

is January 2014. After win- ronment in the country is degrading1. If ning a couple of regional we look at the performance of Bulgarian competitions in informatics schools in international rankings, it is hard with the highest score in to oppose her view. One can play with the country, a 12-year-old rhetoric, but Bulgarian schools are falling Itboy from Smolyan, one of the poorest way short of expectations. regions in Bulgaria, is about to go to the National Olympiad. However, instead of Why is this story important? Because it competing on a national level, the boy shows the relation between the different is disqualified and all rewards from pre- opportunities and inequality in the poor- vious competitions are taken away for est member of the EU and the process of him. He did not cheat. This kid was dis- opening up (liberating) schools in Bulgaria for alternatives and informal methods, for innovation and competition, for the lo- cal community and businesses. It is a diffi- cult process that started with the reform in 2007–2008 and has continued with the new educational law adopted at the end of 2015 ONE CAN PLAY (replacing legislation from the early 1990s). WITH RHETORIC, Nevertheless, four main challenges still lay BUT BULGARIAN ahead of the Bulgarian education system: 1) autonomy; 2) flexibility and choice; 3) in- SCHOOLS ARE volvement; and 4) practical skills. One way to look at these issues is to investigate the FALLING WAY SHORT income distribution in the country, focus- ing on poor households and the middle OF EXPECTATIONS class, and evaluate policy shortcomings in light of poverty data and the social dynam- ics in Bulgaria. qualified because he was homeschooled EDUCATION IS KEY – one of a few elusive homeschoolers In 2014-2016, the Bulgarian Institute for in Bulgaria and probably the only one in Market Economics (IME) conducted ex- Smolyan. Back at the time, three years tensive research on poverty and the main ago, such an alternative to the classical factors that differentiate social and eco- school system was not allowed in Bul- nomic status in society. We used detailed garia and homeschooling was consid- data from EU statistics on income and liv- ered illegal. This is still the case in most ing conditions (EU-SILC). Moreover, the of the countries in the region. Bulgarian National Statistical Institute (NSI) provided us with all the individual respons- In response to this controversial situation, es for Bulgaria, which gave us the oppor- the mother of the boy publicly stated tunity to explore in great detail the issues that the state monopoly in education had of poverty and inequality in the country in been inherited from the communist years 1 and should have been forgotten long ago. http://www.dnevnik.bg/detski_dnevnik/2014/01/08 /2215937_ministerstvoto_otnelo_nagrada_na_mom- She added that the modern school envi- che_spechelilo/ 100 Liberal Education: A Way Forward

the last several years. Our research iden- tified three factors that lead to poverty in Bulgaria: education, economic activity, and regional status. While they are all of great THE POVERTY RATE significance and remain interconnected, IN THE GROUP our findings show that education has the biggest impact on living conditions in Bul- OF PEOPLE garia. Education also predetermines the economic status, as there is a very strong WITH HIGHER relation between educational level and the dynamics of the employment rate. EDUCATION

A FEW METHODOLOGICAL REMARKS IS BELOW 5 PERCENT To investigate the main factors that lead to poverty and inequality in Bulgaria, IME constructed an “income distribution curve” analysis problematic. The distribution in 26 (Figure 1), which represents the income brackets leaves us with five brackets under of every citizen. On the x-axis we placed the poverty line. The curve closes after the several income brackets, while on the y- 26th bracket, leaving a small portion of the axis the number of people that fall in every wealthiest out of the graph. bracket. In this way we may see the entire distribution of income in the society. As INCOME DISTRIBUTION CURVE a consequence, there are two significant IN BULGARIA aspects that shall be mentioned. With that in mind, we can construct the in- come distribution curve for Bulgaria (Figure First, income is understood as “equivalized 1). The poverty line is also presented at the disposable income”. According to Eurostat graph as around 20 percent of the popula- methodology, the equivalized disposable tion is below the poverty line or at risk of pov- income is calculated from the total dispos- erty. Most people are concentrated near and able income of each household (all mon- immediately after the poverty line – these etary incomes included) divided by what are mainly elderly people and pensioners. is called the “equivalized household size”. The visible spike on the way down the curve Thus, the equivalized disposable income is about twice the poverty line (where the big attributed equally to each member of the chunk of employed people falls) is the effect household, so there is no income differ- of people working in the capital city Sofia ence within a household. This approach – this is the regional aspect of the issue, as represents the basic view that poverty wages in Sofia are much higher than else- should be explored on a household level where in the country [See Figure 1]. because living conditions are formed on the household, not the individual, level. The data enable us to divide the income distribution curve by education, economic Second, after testing the data, 26 income activity, and regional status. Since educa- brackets were formed, so that a meaning- tion is the leading factor for income in- ful income distribution is presented. Having equality in Bulgaria, it shall be the focus fewer brackets means that some of the dif- of this analysis. In Figure 2 we can see the ferences will be hidden, while having more income distribution curve with the people means that the curve is not smooth and the divided in four education groups: 1) pri- Liberal Education: A Way Forward 101

mary education; 2) lower secondary (ba- The picture changes dramatically when we sic) education; 3) ; present those with lower secondary (basic) and 4) tertiary (higher) education. The education. This group is similar in size to the difference in income levels is easily vis- one with higher education, but is far behind ible and the risk of poverty rate severely in the income brackets. The poverty rate for increases with a drop in educational level those with a basic education is around 37 [See Figure 2]. percent, seven to eight times higher than for those with higher education. In 2015, the em- Let us investigate the income distribu- ployment rate of those with basic education tion curve for the different levels of edu- was around 32 percent. In other words, those cation. Looking at the group with higher who have only finished 8th grade and never education (Figure 3), it is clear that their completed secondary education are two- performance is far better than the coun- thirds of the cases without a job, and at least try average. The poverty rate in the group a third of them are in poverty. [See Figure 5]. of people with higher education is below 5 percent. We also see that the distribu- While those with preliminary or even low- tion is much more equal even as far as er education (Figures 5 and 6) constitute two or three times above the poverty line. a relatively small group, their performance is On the basis of the labor market data2 we extremely bad. With an employment rate of know that, in 2015, employment of those less than 20 percent (2015) and poverty rate with higher education was as high as 84 up to 60 percent, those with just primary percent (in the 15-64 age group) and has education are facing challenges on a com- never dropped below 80 percent – even pletely new level. This is the group where during the economic crisis (2009-2010). the dynamics between the income brackets In other words, those with higher edu- is the lowest, meaning that most people in cation in Bulgaria are almost always em- it experience long-term unemployment and ployed and are not among the poor in the remain in deep poverty. [See Figure 6]. country [See Figure 3]. TAKEAWAY FOR EDUCATIONAL The next group is those with secondary SHORTCOMINGS education. Their poverty rate is around 13 While all these findings may seem obvi- percent, almost three times the rate for ous, they are often neglected in inequality those with higher education. However, it is debates and not properly observed when still far behind the average for the country. the educational system of the country is In 2015, the employment rate in this group discussed by experts or in parliamentary was around 67 percent. It is important to debates. Using the data presented so far know that this is by far the biggest educa- and applying it to the modern educational tional group in the country (more than half challenges, we can formulate what should of the employed), so their performance be achieved as far as is is crucial for the condition of the middle concerned to improve the economic per- class. Figure 4 shows that the majority of formance of those at the bottom of income people with secondary education are a bit distribution, as well as the so-called “mid- ahead of the poverty line, but the group dle class”. Note that educational levels are quickly diminishes in the higher income understood here as knowledge to be ob- brackets [See Figure 4]. tained, not as classrooms to be filled – this distinction is important as it opens up the 2 National Statistical Institute, Bulgaria. discussion for a wider range of solutions. 102 Liberal Education: A Way Forward Figure Income 1: distribution curve (Bulgaria 2013) Source: National Statistical Institute (Bulgaria), IME Liberal Education: A Way Forward 103 Figure Income 2: distribution curve education by (Bulgaria 2013) Source: National Statistical Institute (Bulgaria), IME 104 Liberal Education: A Way Forward Figure 3: IncomeFigure 3: distribution curve – higher education (Bulgaria 2013) Source: National Statistical Institute (Bulgaria), IME Liberal Education: A Way Forward 105 Source: National Statistical Institute (Bulgaria), IME Figure 4: IncomeFigure 4: distribution curve – secondary education (Bulgaria 2013) 106 Liberal Education: A Way Forward Figure 5: IncomeFigure 5: distribution curve - lower secondary education (Bulgaria 2013) Source: National Statistical Institute (Bulgaria), IME Liberal Education: A Way Forward 107 Figure Income 6: distribution curve – primary education (Bulgaria 2013) Source: National Statistical Institute (Bulgaria), IME 108 Liberal Education: A Way Forward

First, the group of those with just prima- ry education shall be eliminated. There is a need for full coverage of basic educa- tion, meaning that all kids must reach at least 8th grade (or the respective level of knowledge). This is not just legally writ- ten in the Bulgarian Constitution3. The economic reality also shows that if you do not reach 8th grade, you will almost certainly face long-term unemployment and most probably be at risk of pover- ty. In other words, full coverage and no dropouts (from education, not strictly schools) at early stages of education are FINISHING crucial. ELEMENTARY Second, a deep reform in the elementa- TH SCHOOL IN 8 ry lower secondary education, or what is usually referred to as “ordinary schools”, is GRADE IN BULGARIA much needed. Here the system is failing: this group will always be big in numbers, MUST MEAN THAT but their economic performance in Bul- garia is very poor – two-thirds of them are A CHILD HAS not working. The main problem is that their skills are inadequate to the needs of the la- AT LEAST THE BASIC bor market. Finishing elementary school in KNOWLEDGE 8th grade in Bulgaria must mean that a child has at least the basic knowledge and com- AND COMPETENCES petences to adjust to modern economic life. Bulgarian educational system falls TO ADJUST short in this regard.

TO MODERN Third, secondary education should be to a large extent interconnected with the la- ECONOMIC LIFE bor market. This means that schools and businesses should be able to work to- gether. While those who go to secondary education will most probably find job in Bulgaria, their income seems to be limited and they are vulnerable to economic fluc- tuations. In recent years (especially after 2015), the disconnect between secondary

3 “School attendance up to the age of 16 shall be com- pulsory”; Article 53 (2) of the Constitution of the Re- public of Bulgaria. Available [online]: http://www.parlia- ment.bg/en/const Liberal Education: A Way Forward 109

a long tradition of being completely au- tonomous, backed up by local communi- ties. This tradition was lost under commu- AT PRESENT, WHILE nism. At present, while most of the schools MOST in Bulgaria are municipal schools, their general framework and financing comes OF THE SCHOOLS from the central government. Thus, it is still the case that the most important fig- IN BULGARIA ure in Bulgarian schools is not the teacher nor the principal, but the respective min- ARE MUNICIPAL ister in the cabinet.

SCHOOLS, However, during the last 10 years, some steps were taken in the direction of decen- THEIR GENERAL tralization. After 2008, Bulgarian schools received their own budget (the “delegated FRAMEWORK budget”), which depended on the number AND FINANCING of pupils in a given school. This was not only to introduce a clear rule of how the COMES FROM budget of a single school is to be formed, but also to shift power over the budget THE CENTRAL from the local authorities directly to school management. While schools still depend GOVERNMENT on the government to receive funding, they at least have control over these resources once they receive them. Since then the fi- nancial situation of Bulgarian schools has schools and businesses is clearly visible, significantly improved. The budget of each with around a third of the companies being school is no longer subject to short-term unable to find a qualified workforce. political decisions and depends on the (quantitative) performance of the school – ADDRESSING THE CHALLENGES number of pupils, dropout rates, etc. If we look at the abovementioned goals, which are derived from the income data In 2008, the system of “external evalu- of households, we see that these issues go ation” was also introduced. It evolved beyond purely educational policy. Those are through the years and at present is giving challenges that occur chiefly in the sphere quite a good overview of the quality of of family, local community, and business in- education in Bulgarian schools. While the volvement. Let us therefore investigate the results are in many cases troubling (hardly four main topics in Bulgarian schools that a surprise), the system allows us to dif- were touched upon by recent educational ferentiate among schools and see which reform, but still pose some problems. ones are doing better and which are fall- ing behind. It also gives an opportunity to AUTONOMY further open the system where the focus One of the main issues in Bulgarian edu- will be on knowledge itself and not on the cation system is the autonomy of schools. type of education, curriculum, or anything Historically, the Bulgarian school has of this kind. 110 Liberal Education: A Way Forward

Since 2008 we could observe that there introducing innovation and are on top of emerged some competition among every external evaluation. Private schools schools and quite a few of them are open are also in position to have a less rigid em- to some innovative ideas – especially pri- ployer-employee relation, thus encourag- vate schools, which are still a minor share ing good teachers and punishing bad ones. of the market. Nevertheless, the system is That is because they do not face all the re- still rigid when it comes to textbooks and strictions that public ones do. Still, at pre- teaching methods. Moreover, the process sent, their effect is limited, as the financing of collective bargaining has completely model discourages such a choice. If, with dominated the employer-employee rela- the new almost-voucher system they can tion and leaves little room for management play a greater role, we may expect some to differentiate in pay, reward success, or positive impulses for the whole system. invest in young teachers, as well as to sanc- tion the lack of results. Although Bulgarian INVOLVEMENT schools have their own budgets and are There are quite a few examples from recent going through external evaluation, these years which show how non-public actors are just preconditions and not what real (e.g., non-profit organizations and private autonomy in education should look like. individuals) can help schools. It seems it is not predominantly a question of financing, FLEXIBILITY AND CHOICE but more of citizens’ energy and openness With the introduction of delegated budgets, of the educational system for such solu- schools in Bulgaria are predominantly financed tions. A good example of this phenomenon on the basis of unified per student standards. are dropout cases that occurred in one of In practice, this is supposed to lead to com- the poorest regions in Bulgaria. petition and effort (every school is expected to want to attract more students and have Kozloduy is a small town located near the fewer dropouts), as well as to empower par- Danube river – part of the Vraca district, ents’ choice – as a child can move to another which is a region with rapidly deteriorating school and the financing will go with him/her. demographic conditions and few opportu- nities for young people. This is also a region Although in some aspects this system is with a troubling rate of school dropouts. similar to the voucher system, it is not the What will be a usual sight is that sooner or lat- same. If parents decide to move their child er some of the pupils just stop showing up at to a private school, the money will not fol- school. This will be the children who are liv- low – which means that financing is still ing not in the regional center, but somewhere targeted at funding public schools and not in the periphery. What is even more troubling education itself. is that the parents of these students do not care enough about school and may even en- The new education law foresees that courage a dropout – again, these are usually private schools will also be part of that extremely poor families, with parents being scheme, which means that Bulgaria is uneducated and long-term unemployed. moving closer to the voucher system. Still, the financing reform will take effect in 2018 We know from several sources4 that the and there are some “social” obligations for schools will most probably not report the the private schools to deliver if they want to dropout immediately. Due to the delegated participate in full. In any event, it is exactly the private schools that are most open to 4 See for example the investigation by NOVA Liberal Education: A Way Forward 111

budget, they will prefer to keep the child on 2016, we hit record high levels of compa- their list as that means they receive more nies (one-third) that want to hire a special- money. Nevertheless, sooner or later the ist but are unable to find one. At present, dropout will be reported to the regional in- Bulgaria is about to introduce a full voca- spectorate of education. Now, while some tional education system which gives some policies can be shaped to give incentives hope for change. The professional schools for a family not to encourage a dropout, play an important role in Bulgaria, as they the government officials will have limited not only engage lots of children, but also chance of resolving the issue. They can these are usually the kids who are not use some form of the carrot-and-stick ap- from the city center (so mainly members proach (exploiting some rules for receiv- of poor and middle-class families). Many ing public allowances), but with almost no troubled children, from families with seri- long-term effect. ous economic difficulties, actually go to professional schools, which makes them What happens in some regions, and in Ko- extremely important from a social point of zloduy, is that the inspectorate will pass view. the papers of the dropout to a special non-profit organization which deals with While will create such cases. Such an NGO would then train greater opportunities for these profes- volunteers from the region (some of them sional schools (at least because of the from local schools) who will visit the fam- financial instruments available and the ily of the dropout and talk to them repeat- improved framework) some challenges edly, explaining how cool it is to be back in remain We still see local communities school. And this works – not just in theory, struggle to find the best form of coming but in practice – as in the case of some together in planning what kind of classes dropout kids from Kozloduy. will be needed in the coming years. There are plenty of examples of initiatives5 to The take-away from this story is that a) such open new or develop existing high-tech an issue is extremely time-consuming and professional classes that fail because the it takes a lot of effort from the local com- locals did not succeed in finding children munity to solve it, and b) the system must who would want to join them. Again, this be open to such a solution. If the school is not a simple technical issue that just does not care or the inspectorate is closed needs an adequate top-down solution. It for the non-governmental sector, none of is much more complicated than that, as this will actually take place. Being open to regional demographics and challenges non-public-sector solutions should not be should also be considered. dependent on the openness of a particular public servant, but rather be rooted in the Still, we see that those who are trying to very heart of a policy. bring together businesses and school management are performing better – even PRACTICAL SKILLS though in the end they sometimes fail. One of the other deeply rooted problems There are many instances when it is the in Bulgarian education is the disconnec- schools that are not willing to cooperate. In tion between education and businesses. In Plovdiv (one of the best economic exam-

5 In the last three to five years, almost in every region in TV (4 January, 2017): https://nova.bg/news/ Bulgaria there was a case of closing a particular profes- view/2017/01/04/169859/ sional class due to lack of students. 112 Liberal Education: A Way Forward

ples in the country in the last few years as far as foreign investments are concerned), this was exactly the issue. Once again, the solution came from outside the system. BULGARIA IS ABOUT The local community – businesses and ex- TO INTRODUCE perts – created what is now called an Edu- cation and Industry Board, which works for A FULL VOCATIONAL more adequate classes in local schools and pressures school management to be more EDUCATION SYSTEM open to new ideas. Other regions (like Ga- brovo, which has an industrial profile) are WHICH GIVES SOME thinking of replicating this initiative, to- gether with the full introduction of the vo- HOPE FOR CHANGE cational education.

LIBERATING SCHOOLS society at large and what the question is. IME’s poverty research clearly shows that The only question that remains is whether education is the key to escaping poverty the schools will be open for them. and creating a stronger middle class. While the Bulgarian schools were reformed in re- The idea of liberating schools goes beyond cent years, there are still many challenges the classical “private versus public” debate. that lay ahead. The autonomy of schools In the modern EU-type welfare state, it is is still problematic. While they have their hard to expect a full swing toward educa- own budget, schools need to follow strict tion privatization. But that alone is not an rules of how and what they teach, and the obstacle for opening up the system for all employer-employee relation is, in practice, kinds of alternatives, introducing competi- socialistic due to the rigid collective bar- tion between public and private schools, gaining in the system. Alternatives to the and allowing for solutions such as home- ordinary public schools (such as private schooling. It is also not an obstacle for schools or homeschooling) were largely opening up schools for local community neglected or forbidden until very recently. and private investments. ● Vocational education is finally being intro- duced in full, but it is still dependent pri- marily on the good will of the school man- agement.

All of the abovementioned good examples (like the smart homeschooler from Smol- yan or the young volunteers from Vratsa, PETAR or the educational board in Plovdiv) were GANEV non-systematic solutions. They all fixed one or another bug in our educational sys- A Senior Economist at the Institute for Market Econom- tem, but were not, strictly speaking, part of ics (IME) in Sofia, Bulgaria, since 2007. His research in- terests focus on economic growth and the business the system. Education in Bulgaria cannot cycle, fiscal policy and the role of government, free be transformed by an act of a single institu- markets, and inequality. He is also a board member of the Bulgarian Macroeconomic Association and an tion or by a change in law alone. The solu- author of numerous articles in Bulgarian media. He is tions that are to be found depends on the also responsible for the educational initiatives of IME.