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First-year student Mona Saidi sits on the steps outside the main entrance of the University of Vienna and chats in German, oblivious to how unusual she is. First, she is a woman, and in Austria — unlike most industrialised countries — more men attend college than women. Second, Ms Saidi, who was born in Vienna but is of Iranian descent, speaks German fluently.

“Obviously they see that I don’t look Austrian, but if you speak without an accent you kind of seem exotic,” she says.

It is the facility with the language — a differentiating factor that appears to elude many students with migrant parents — that separates Ms Saidi from the 21 per cent of Austrians who can neither read nor speak German fluently. This is in spite of a school system that spends more per pupil than many countries in the EU. The quality of Austrian schools and universities has become a serious concern, and growing demands for improvement have so far produced no action.

Austria spent €4.5bn in 2013 on tertiary education, yet it has among the lowest graduation rates. Moreover, literacy skills are poor compared with other industrialised countries.

Ask industry and education experts what is needed and they offer a long list of suggestions, including one in which all students are given equal access to education up to the age of 14 in classes that last all day.

Others say schools should be given more autonomy. Policy and even teacher hiring decisions are made at the federal level, a feature Karl Aiginger, director of Wifo, the Austrian Institute for Economic Research, likens to “central planning”. Reformers want Austria to offer two years of kindergarten before pupils enter formal education, to improve language skills. By the time they have finished primary school, many children still do not speak German well enough to read it.

“Austria has one of the most selective systems in the world,” says Andreas Salcher, an education consultant.

Under Austria’s centuries-old system, students are separated at the age of 10 into one of three school types that — generally — will determine their future. Highly motivated, articulate children move on to a gymnasium, which feeds universities. The majority attend middle school and move on to trade school.

The unlucky bottom 9 per cent attend high schools that prepare them for little more than low-skilled, low-paid jobs. Those attending the high schools tend to be children of immigrants. “Schools are segregated [by ethnicity and class],” says Dr Salcher. As they do not speak German well and are not considered academically able, graduates with the lowest secondary qualification are de facto excluded from Austria’s much touted apprenticeship system.

Under that system, students — usually 15-year-olds who are not interested in or do not qualify for university — can enter apprenticeships or vocational training. Students in what is called the “dual” system typically split their time between working and learning on-the-job skills while studying.

One study published in 2013 found that countries with strong apprenticeship programmes place and keep young people in the job market better than countries without them. In 2013, the percentage of 15-29-year olds who were not in employment, education or training stood at about 10 per cent, below the OECD average of 15 per cent. More than half of those leaving school in Austria find work without experiencing any period of unemployment.

But for many young people with immigrant backgrounds, unemployment is closer to about 20 per cent. The dual system, originally meant to prepare students for practical jobs, has instead become a dumping ground for the weakest in society who have little chance of moving up, says Dr Salcher.

“Education is a problem, quality wise,” says Georg Kapsch, chief executive of Kapsch Group, the communications company.

Austria also lags behind other industrialised countries in the number of university graduates it produces — about 20 per cent of university graduates versus the 30 per cent average in the OECD.

Research published two years ago by Ludger Wössmann, an economist at the Ifo Institute in Munich, has suggested that vocational education could have a downside. Early skills learned in vocational training could become a disadvantage by the age of 50 because they soon become outdated. Thus low youth unemployment could mean higher unemployment later in life for older people, he says. That is now true in Austria, where 16.8 per cent of the workforce aged over 50 is unemployed.

An education reform working group formed by the government will report in mid-November. Few people hold out hope there will be meaningful changes.

Copyright The Financial Times Limited 2017. All rights reserved.