Britain slips down education league table

The proportion of youngsters who drop out of the British education system is one of the highest in the developed world, according to an international study published yesterday.

The proportion of youngsters who drop out of the British education system is one of the highest in the developed world, according to an international study published yesterday.

But British graduates' increase in earning power is among the highest in the world, the Organisation for Economic Co-operation and Development report concluded.

It also showed that Britain has lost some of its appeal to foreign students because of international competition.

The Paris-based OECD's report, which examined education trends in 27 developed countries, found that Britain had slipped down the international league table for the proportion of students aged 15 to 19 who continue their education.

Britain now ranks 24th, with 75.3 per cent of students aged 15 to 19 in education, compared with 76.1 per cent the previous year. It was overtaken by Slovakia. Only Mexico, Portugal and Turkey have worse records.

A spokesman for the Department for Education and Skills said: "We know that there are significant challenges when it comes to participation post-16. This has been a problem for many years. We are confident that the wide range of measures that we are putting in place will have a dramatic effect."

British universities lost out to institutions in Iceland, South Korea, New Zealand and Sweden in the battle for lucrative overseas students. Foreign students - who pay higher fees than those from the UK or EU - contribute huge sums to the national economy. The British Council has estimated that the UK economy could earn £13bn a year from international students by 2010.

But although the number of foreign students coming to the UK increased between 1998 and 2002, Britain's market share declined from 16 per cent in 1998 to 12 per cent in 2002.

The Government's pledge to increase the proportion of young people going to university to 50 per cent by 2010 received a boost with evidence that the rapid growth in the number of graduates has not diminished their earning power.

University graduates earn 59 per cent more than those with only school-level qualifications in the UK, the study found. This is the fifth largest earnings boost of any OECD country. It is only higher in Hungary (110 per cent), the United States (86 per cent), the Czech Republic (79 per cent) and Portugal (78 per cent).

Andreas Schleicher, the OECD's head of analysis, said: "If everybody is getting higher degrees, what does that mean? Will the value of those degrees decline?" He said the research showed the answer was "no". "The value of these degrees is what they get people," he said.

The study showed that Britain, Australia, Finland, Ireland and Spain had increased graduate numbers by more than 20 per cent between 1995 and 2002.

The OECD figures also revealed that 47 per cent of young people in the UK went into higher education - well on the way to the target of 50 per cent by the end of the decade.