Tertiary Education in Mongolia

Public Disclosure Authorized
52925
TERTIARY EDUCATION
IN MONGOLIA:
Meeting the Challenges of the Global Economy
POLICY NOTE
September 2010
Human Development Sector Unit

Mongolia Country Management Office
East Asia and Pacific Region
Document of the World Bank
REPORT NO. 52925 - MN
Tertiary Education in Mongolia:

Meeting the Challenges of the Global Economy
POLICY NOTE
September 2010
Human Development Sector Unit

Mongolia Country Management Office
East Asia and Pacific Region
Document of the World Bank
CURRENCY EQUIVALENTS
Currency
US$1.00 = MNT 1,168.20 (2007)
US$1.00 = MNT 1,171.36 (2008)
US$1.00 = MNT 1,358.19 (2009)
FISCAL YEAR
January 1- December 31
WEIGHTS AND MEASURES

Metric System
ACRONYMS AND ABBREVIATIONS

ECDE
MSUE
EGSPRS
MUST
ESMP2
NER
GER
NQF
GDP
NUM
HSU
NVETMC
LSMS
OECD
M&E
QA
MECS
STF
MNCEA
TEI
MOF
TVE
Early Childhood Development and Education

Mongolian State University of Education
Economic Growth Support and Poverty Reduction Strategy
Mongolia University of Science and Technology
Education Sector Master Plan 2
Net Enrolment Ratio
Gross Enrolment Ratio
National Qualification Framework
Gross Domestic Product
National University of Mongolia
Health Sciences University of Mongolia
National Vocational Education and Training Methodology Center
Living Standards Measurement Survey
Organization for Economic Cooperation and Development
Monitoring and Evaluation
Quality Assurance
Ministry of Education, Culture, and Science
State Training Fund
Mongolian National Council for Educational Accreditation
Tertiary Education Institution
Ministry of Finance
Technical and Vocational Education
MSUA
Mongolian State University of Agriculture
Country Director:
Sector Director:
Sector Manager:
Task Team Leader:
Klaus Rohland
Emmanuel Jimenez
Eduardo Velez Bustillo
Kin Bing Wu
CONTENTS
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .v
1.
Challenges to Post-basic Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1. Educational Development since the Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Key Policy Questions Surrounding Tertiary Education . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. The Demand for Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2.1
Rising Wage Premia for Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2. Prospects for Job Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3. Migrant workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4. Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.
4.
5.
6.
The Impact of Governance and Financing on Quality and

Equity of Tertiary Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.1. Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2. Accreditation and Quality Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.3. Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4. Tuition Fees and Student Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5. Strategies of the Updated Education Sector Master Plan. . . . . . . . . . . . . . . . . . . . . . . .
Policy Options to Reform Tertiary Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1. Differentiate Roles of TEIs and Improve System Articulation
to Facilitate Lifelong Learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2. Concentrate Resources to Fund Premier Universities
through Competitive Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3. Higher Education Commission and Quality Assurance . . . . . . . . . . . . . . . . . . . . . . . . .
4.4. Public Accountability and Consumer Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.5. Better Targeting of Financial Aid and
Improvement of Basic Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technical and Vocational Education and Training:
An Alternative to Tertiary Education? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1. The Structure and Outcomes of Mongolias TVET system . . . . . . . . . . . . . . . . . . . . . . .
5.2. Challenges to the Quality of Mongolias TVET System . . . . . . . . . . . . . . . . . . . . . . . . .
5.3. Options to Improve Quality and Relevance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
13
16
17
22
26
27
27
29
32
35
37
39
39
40
41
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
MONGOLIA HIGH EDUCATION POLICY NOTE
LIST OF TABLES
Table 1:
Growth of the Tertiary Education Sector, 1991-2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 2:
Tertiary Graduates per 10,000 Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 3:
Gross Enrollment Rates by Level, 1991, 1995, 2000 and 2007 . . . . . . . . . . . . . . . . . . . . 3
Table 4:
Wage Premia of Various Levels of Education, 1998 and 2007 . . . . . . . . . . . . . . . . . . . . 8
Table 5:
Wage Premia for Different Levels of Educational Attainment,

1998 and 2007 by Age Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 6:
Distribution of Wage Employees by Sector, 1998, 2002, and 2007 . . . . . . . . . . . . . . . 10
Table 7:
Public Expenditure on Education, 1991, 2002 and 2007 . . . . . . . . . . . . . . . . . . . . . . . 18
Table 8:
Sources of Funding of Tertiary Education Institutions, 2007 . . . . . . . . . . . . . . . . . . . . . 19
Table 9:
International Comparison of Per Student Spending

By Level of Education (US Dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 10:
State Training Fund Recipients by Program Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table 11:
A Cross Country Comparison of Tuition Fees as Percentage

of per capital Gross National Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table 12:
State Training Fund Allocation of Resources, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 13:
Proportion of College Costs Covered by Tuition/Financial Aid. . . . . . . . . . . . . . . . . . . . 25
Table 14:
Tripartite System of Tertiary Education in Selected OECD Countries . . . . . . . . . . . . . . . 28
Table 15:
Ranking of the Worlds Top Universities, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Table 16:
Spatial and Income Disparities in Educational Completion Rates. . . . . . . . . . . . . . . . . . 38
Table 17:
Basic Outcomes of TVET in Mongolia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
LIST OF FIGURES
Figure 1:
Enrollment Ratio by Age, 1998 and 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Figure 2:
Age Earning Profiles of Workers between 25 and 55, 1998 and 2007 . . . . . . . . . . . . . . 7
Figure 3:
Characteristics of World Class Universities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Figure 4 :
The Widening of STF Eligibility Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ii
LIST OF BOXES
Box 1:
Californias System of Universities and Community Colleges . . . . . . . . . . . . . . . . . . . . 29
Box 2:
Competitive Funding as an Innovative Financing Tool . . . . . . . . . . . . . . . . . . . . . . . . . 32
Box 3:
New Zealands Tertiary Education Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Box 4:
How Singapore is proposing to deal with the proliferation

of private tertiary education institution to assure quality . . . . . . . . . . . . . . . . . . . . . . . 35
Box 5:
Labor Market Observatories in Italy and Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Box 6:
Singapores Institute of Technical Education (ITE) Curriculum Development Model . . . . 43
Box 7:
Denmarks TVET Teachers Qualification and Training . . . . . . . . . . . . . . . . . . . . . . . . . 44
Box 8:
The Australian Qualification Framework (AQF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
LIST OF ANNEXES
Annex 1:
Mongolias Educational Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Annex 2:
Years of Schooling of the Younger and Older Adult Population . . . . . . . . . . . . . . . . . . 52
Annex 3:
Tertiary Premia by Year, Age Group, Gender and Sector of Employment . . . . . . . . . . . 53
Annex 4:
Aggregate Institutional and Enrollment Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Annex 5:
Enrolment Data, by Degree Level and Type of Institution . . . . . . . . . . . . . . . . . . . . . . . 62
Annex 6:
Enrolment by Subject and Degree Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Annex 7:
Students Supported by Financial Assistance, by Degree Level and Institutional Type
Annex 8:
Faculty Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Annex 9:
Recent Research Excellence Initiatives Worldwide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
68
iii
ACKNOWLEDGEMENTS
The preparation of this policy note was led by Kin Bing Wu (Lead Education Specialist, EASHD). Prateek
Tandon (Economist, EASHD) wrote the sections on tertiary education development, finance, and
accreditation. Fook Yen Chong (Consultant) assessed the system of technical and vocational education
and training. Chris Sakellariou (Consultant) analyzed the Living Standard Measurement Surveys to
obtain trends of the labor market, and Roberta Bassett provided useful information on New Zealands
Tertiary Education Commission. Ms. Tungalag Chuluun (Human Development Operations Officer)
provided helpful advice on the substance and also provided quality assurance on the translation of this
policy note into the Mongolian language. The policy note benefited from discussion on South Gobi
development with Arshad Sayed (Country Manager, Mongolia, EACMF) and James Reichert (Senior
Operations Officer, EASCS).
The Team is grateful to the Minister of Education for framing the policy questions for tertiary education
reform and for guiding the team in the direction of its research. We thank Mongolian officials and academics
for sharing their insight and information on the countrys higher education system, particularly Mr. M.
Baasanjav, Director of Tertiary Education Department, Mr. R. Bat-Erdene (Director of the Monitoring and
Evaluation Department and former Director of the Tertiary Education Department); Ms. D. Khishigbuyan
(Director of the Rural Education and Development Project PMU); Mr. O. Gankhuyag (Deputy Director,
EFA-FTI); Mr. A. Tsolmon (Officer in the Monitoring and Evaluation Department); Mr. D. Bayar (Officer
in the Tertiary Education Department); Mr. Ts. Erdentsetseg (Officer in the Education Evaluation Center);
and Ms. D. Chuluuntsetseg (Senior Officer for External Relations and Program Accreditation of the
National Accreditation Center) for their helpful advice and guidance. Byambatsogt Jugder (Consultant)
shared with us his knowledge and insight, including the direction of revision of the Master Plan. We are
also grateful to representatives from Ivanhoe Mines, LLC and the Mongolia Employers Federation for
sharing their perspectives on the education and training system in the country.
Peer reviewers for this note are Jamil Salmi (Lead Education Specialist, HDNED) and William Experton
(Lead Education Specialist, AFTH2).
iv
EXECUTIVE SUMMARY
Since the transition from a planned economy to a market-based democracy in the early 1990s,
Mongolian higher education has experienced a marked expansion. Between 1992 and 2007, the
number of tertiary education institution (TEIs) has increased more than four-fold and enrollment more
than six-fold, with the gross enrollment ratio growing from 14 to 47 percent.
This rapid growth has been fueled by the increased demand for higher skills in the labor market
and has led to rising education premia. These trends, in turn, have stimulated increased household
demand for tertiary education. In the early 1990s, the liberalization of the economy and the legalization
of private higher education made it possible to increase the supply of tertiary education. However, this
expansion in supply has been met with the charging of tuition fees in public universities and the growth
of private institutions. As a result, public expenditure on higher education has been contained to about
14 percent of total expenditure, compared with over 20 percent in China.
Although this policy has met the need for an increased supply of tertiary education, it has
failed to produce graduates who can improve Mongolias international competitiveness. The
emerging problems are low-cost and low-quality education, a mismatch between the demand for and
supply of skills, and inequitable opportunities of access between the urban and rural areas and between
the rich and the poor. The policy has triggered a downward spiral:
Per student public expenditure on tertiary education is about $339, low by international
standards. In contrast, the average per student public expenditure on tertiary education in OECD
is $11,512. Insufficient public funding and the proliferation of small private institutions have
driven TEIs to rely on the mass admission of fee paying students for financial sustainability.
As a result, TEIs have few resources to attract highly qualified persons into teaching,
improve teaching and learning facilities, or upgrade the qualification and skills of faculty
members. A full professors salary in a public TEI is about $300 a month, with little distinction
from that of a school teacher. The salary of professors in private institutions varies more, but
is generally not much higher. Only 23 percent of faculty members in public institutions and 15
percent in private institutions have PhDs, reflecting the non-research nature of higher education.
There are few incentives or resources for professional development or upgrading.
Moreover, there is a mismatch between the fields of study demanded by the labor market
and the fields of study chosen by those enrolled. Most private TEIs offer social science and
business studies because of lower delivery costs. But the labor market demand is in science and
technology, which accounts for only 23 percent of the total enrollment.
As tertiary education enrollment grows more quickly than the number of available jobs,
ill prepared graduates face grim employment prospects. Only about 36 percent of university
graduates have been able to find a job, compared with 60 percent of graduates from technical
and vocational education. The majority of those who find a job come from public universities.
Yet, as tertiary education premium remains high, urban parents who can afford to pay
continue to send their children to pursue tertiary education. About 70 percent of students
are from urban areas, although only half of the population live in the urban areas. Tuition fees in
public and private TEIs, however, are high and average around $300 per year with variation across
institutions.
These fees contribute to households indebtedness. About 67 percent of the personal loans
taken by herders are spent on tertiary education.
This indebtedness is partly a lack of publicly available information on the quality of

education offered by each institution and about the employment prospects of the
graduates from different disciplines. Hence, the consumers of education (i.e. parents and
youths) are not making informed choices.
There is thus an urgent need to reform the tertiary education subsector. This policy note calls for
several actions to improve quality and the equity of access.
Enhancing the quality of tertiary education is essential to improving Mongolias international
competitiveness. To do so requires making strategic choices, improving governance, and increasing
investments in tertiary education. The following steps should be considered:
Rationalize TEIs in order to concentrate resources on fewer, premier institutions and programs to
help them reach international standards;
Use competitive funding to allocate resources (such as equipment and staff training) to the best
programs (as measured by key performance indicators and labor market outcomes) on a tri-annual
basis to allow for predictability of funding and to give time to demonstrate outcomes;
Invigorate the existing accreditation and quality assurance mechanisms, using international
benchmarks, to facilitate rationalization of public and private institutions and to allow for good
quality offshore programs to compete in Mongolia;
Develop a diversified but integrated tertiary education system so that each institution can play a
key role in regional development and transfers between institutions can be made; and
Establish a Tertiary Education Commission comprising representatives from industry, key professions,
and academics from developed countries to set strategic direction, improve governance, allocate
block grants, and oversee the role of TEIs in facilitating regional development.
vi
To improve the equity of access and to provide greater consumer protection, the following measures
could be adopted:
Tighten eligibility criteria and improve the targeting of the State Training Fund to aid low-income
students;
Improve the quality of basic education to ensure that the poor complete schooling so as to enhance
the probability of their enrollment in higher education; and
Set up a labor market observatory to inform the public about the key performance indicators of
each institution and employment statistics by discipline to facilitate school and career choice.
To reduce the pressure on tertiary education and provide alternatives to youths, the development of
technical and vocational education at the senior secondary level should be explored.
vii
Summary of Issues and Options
Subsector
Issues
Recommendations
Tertiary
Education
Low Cost and Low

Quality:
Establish a Tertiary Education Commission comprising

representatives from industry, key professions, and academics from
developed countries to set strategic direction, allocate block grants,
and oversee the role of TEIs in facilitating regional development
Create institutional rankings based on quality of programs,
research output of faculty, and facilities available
Introduce incentive mechanisms to encourage institutions to carry
out quality assurance, quality improvement, and participate in
accreditation
Invest in a national system of faculty training, skills standardization
and certification to allow staff to continuously advance their skills,
knowledge, and qualifications
Introduce Competitive Funding to allocate resources in a more
strategic manner
Introduce fee-generating short courses with selective admission for
professional development and upgrading
Provide public finance in the form of scholarships to faculty
members who have been admitted to overseas institutions, and
support a systematic upgrading program (including attachment to
industries)
Establish a monitoring and evaluation system to ensure the
implementation of suggested improvements
Mismatch between
Skill Supply and
Demand:
Finance tracer studies to be used as a market signal to inform the

admissions process
Publish employment statistics by subject areas and by institutions
so that new entrants can make decision as to whether and where
they want to enroll
Shift students to more relevant disciplines to realign the supply of
skills to the demands of the labor market
Inequitable Access:
Reform the structure, capacity, targeting, and operation of the

State Training Fund
Introduce a monitoring and evaluation system for the State
Training Fund to track the extent to which its programs reach its
targeted groups
viii
Summary of Issues and Options
Subsector
Issues
Recommendations
TVET
Poor Quality of
Infrastructure and
Equipment:
Work with industries to obtain donated of equipment

Channel resources into the updating of equipment
Create practical training workshops on infrastructure rehabilitation
Fragmented
Governance:
Create a new TVET agency, absorbing the National Vocational

Education Training and Methodology Center, to support
vocational standards, curriculum development, certification
procedures, teacher training, school management and training
facilities
Lack of Opportunities
for Faculty Skill
Upgrading:
New TVET agency to specify minimum teachers qualification

Existing teachers to attend in-service training on pedagogy and
industrial attachments with industry partners
Newly recruited teachers to receive pre-service training for both
pedagogy as well as technical skills
Limited Collaboration
with Industry:
Increased participation by employers and unions in reviewing

training courses, setting occupational standards, offering on-thejob training and developing bridge programs between school and
work, such as apprenticeships and internships
Inefficient Financing:
Encourage public-private partnerships and private investment

Review funding of stipends to students so that more funding is
channeled to those attending courses that have strong demand
from employers
ix
1. CHALLENGES TO POST-BASIC EDUCATION

1.1. EDUCATIONAL DEVELOPMENT SINCE THE TRANSITION
Universities educate future leaders and develop the high-level technical and managerial capacities that
underpin economic growth. Specifically, they perform three critical roles teaching, service to the
community, and research and development. In an age of rapid technological change and globalization,
the role played by institutions of higher learning is indispensible: they facilitate regional development and
are an integral mechanism of national development. Recognizing the importance of tertiary educations
contribution to development, Mongolia has rightly prioritized reform of its tertiary education system as
a key aspect of its efforts to achieve economic growth and employment-based poverty reduction.
1.1.1. Tertiary Education

Mongolias rapid expansion of its tertiary education system has been a key element in its successful
transition from a planned to a market-based economy, which grew at an annual average of 9 percent
between 2004 and 2008.1 The gross enrollment ratio (GER) increased from 14 percent in 1991 to 47
percent in 2009 (Table 1). The total number of students rose from some 20,000 to about 150,000
during the same period. This rapid growth was stimulated by the increased demand for skills in the
market economy, which has fueled the private demand for tertiary education, and was enabled by the
legalization of private institutions in 1991.
The increase in supply has been driven by private expansion, but state institutions continue to have a
strong presence in the sub-sector. The number of tertiary education institutions (TEIs) grew from 14 to
151 in 2009, of which 72 percent is private, and has been accompanied by several positive outcomes.
Mongolias GER in tertiary education is more than twice as high as Chinas 23 percent, and closer to
the OECDs average of over 55 percent. It should be noted, however, that although 72 percent of TEIs
are private, 66 percent of students still enroll in public TEIs. The student-to-teacher ratio in Mongolia is
22:1, similar to South Koreas, although slightly lower than OECDs average of 16:1. The availability of
student financial assistance has mitigated to some extent the adverse impact on access.
The Governments Economic Growth Support and Poverty Reduction Strategy (EGSPRS) has specifically called for
improving the quality of and access to tertiary education services, and the Governments Education Sector Master
Plan (ESMP2) has set the twin goals of establishing a world-class university system and transforming Mongolia into
a knowledge economy. With respect to tertiary education, the ESMP2 identifies three main policies: (1) to upgrade
education quality and produce citizens who can function effectively in a modern knowledge economy; (2) to provide
education services that can be accessed by students in all parts of the country, including rural areas, and by poor and
vulnerable groups; and (3) to improve the management capacity of central and local educational institutions.
Table 1: Growth of the Tertiary Education Sector, 1991-2009

1991
2009
% increase,
1991-2009
Share of total, 2009
14
151
979%
100%
Public
14
42
200%
28%
Private
109
72%
20,000
150,326
652%
100%
Public
20,000
99,037
395%
66%
Private
50,878
34%
Number of TEIs
Number of Students
Source: MECS statistics.

Note: The number of institutions in 2008 was higher, but this table presents the most updated statistics.
In addition to the national education system, Mongolians also have access to education overseas. During
the socialist era, thousands of students attended universities in the former Soviet Union, as well as Eastern
European countries such as East Germany, Czechoslovakia, Hungary, and Yugoslavia. Many government
officials were graduates of overseas universities. After the transition, the academic connection with
Russia and some newly independent states continued, while many more went to Singapore, Australia,
the United Kingdom, and the USA. The vast majority of these students were self-financed, 80 percent
of whom attended institutions in Singapore. In 2010, the Government of Mongolia (GoM) set up a
program to fund and place Mongolian graduate students into U.S. universities through the Fulbright
Program. It is clear that the formation of high level skills is not restricted to TEIs in Mongolia. Rather, it
has a global reach.
As a result of the rapid development of tertiary education, Mongolia compares well with other developed
countries (Korea, Japan, USA and UK) and middle income countries (such as Mexico and Brazil) in terms
of graduates per 10,000 population (Table 2).
Table 2: Tertiary Graduates per 10,000 Population
2003
2004
2005
2006
2007
Mongolia
73
84
88
91
N/A
Korea
127
126
126
125
125
Japan
81
82
83
84
83
USA
81
84
87
89
90
UK
101
100
105
106
107
Mexico
34
34
37
40
N/A
Brazil
31
36
41
N/A
43
Source: World Banks EdStat database, and OECD Education at a Glance (2009).
1.1.2. Basic Education

In contrast with tertiary education after the transition, pre-primary, primary, lower secondary and upper
secondary education suffered a severe decline throughout the 1990s and has only recovered in recent
years (Table 3). Both the supply of and demand for these subsectors have been adversely affected by
the contraction of fiscal and household expenditures and by the dismantling of the collectives and social
safety nets which provided these services. These trends began to reverse starting at the turn of the 21st
century.
Table 3: Gross Enrollment Rates by Level, 1991, 1995, 2000 and 2007
Pre-primary
Primary
Lower
Secondary
Upper
Secondary
Tertiary
1991
39%
97%
82%
69%
14%
1995
21%
88%
59%
21%
15%
2000
28%
99%
63%
28%
29%
2007
54%
94%*
89%
54%
47%
Source: Edstats 2008 and MECS statistics.

Note: the GER of 94% in 2007 is due to the lowering of the entry age in primary education from 8 to 7 in 2004-5, and
from 7 to 6 in 2008-9. This entails expanding the number of school-age children which is used as a denominator for
estimating the enrollment ratio. It does not mean reduced coverage.
Recognizing the importance of providing more and better basic education to all school-age children on
the grounds of equity and the need to deepen human capital, the GoM began an important structural
reform by adding an 11th year to the primary-secondary education cycle in 2004-2005 and subsequently
added a 12th year beginning in 2008-2009. The reform addresses the very short (10-year) primary-plussecondary cycle that existed in Mongolia prior to 2004-2005.
An analysis of the Living Standard Measurement Surveys (LSMS) of 1998 and 2007 found that due to
improved education conditions and the lowering of school-entry age, more children have entered schools
earlier and have stayed longer (Figure 1). It also shows that a larger group of youths who have completed
secondary education continue on to tertiary education. The same trends are apparent for both boys and
girls (Annex 4, Table A4.6). Compared to 1998, enrollment ratios disaggregated by gender were much
higher in 2007; this trend is particularly pronounced for girls entering secondary school and tertiary
education. There have also been impressive enrollment trends among the rural population (Annex 4,
Table A4.7). While both rural and urban enrollments increased in 2007 compared to 1998, significantly
more rural students have enrolled in secondary education and are staying in the system longer.
Figure 1: Enrollment Ratio by Age, 1998 and 2007

Enrollment by Age, 1999 and 2007
120
Enrollment Ratio
100
80
1998
2007
60
40
20
0
6
10
11
12
13
14
15
16
17
18
19
20
21
22
Age
Source: LSMS, 1998 and 2007.
Figure 1 also shows that enrollment in basic education for the 8 to 15 age group has still not reached
100 percent. Boys, girls, rural, and urban student enrollments start tapering off by age 14, and rural
students still have the furthest to go. Overall, Mongolias basic education completion rate is only 77
percent, lower than other transitional economies, such as Armenia (87 percent) and Tajikistan (90
percent). These data indicate that that Mongolian education policy is facing the serious challenge of a
trade-off between basic and tertiary education in the medium term and also explain the urban and rural
disparity in access to tertiary education.
Demographic trends show that the 20-24 age-group constitutes the largest cohort in the population in
2010, with 342,000 people, or about 13 percent of the total population (US Census Bureau projection,
also see Annex 2). Therefore the social demand for tertiary education is also the highest. By 2020, this
cohort is projected to decline to 283,000, thereby reducing pressure for this subsector. This shift presents
an opportunity to improve quality while expanding the gross enrollment ratio for tertiary education,
even if everything is held constant. At the same time, with a total fertility rate of 2.24, the number of
school-aged children in the country will increase by almost 40 percent (Annex 2). The education system
will need to adjust to accommodate greater numbers of students in lower levels of education in the
coming decades.
This policy note looks primarily at the tertiary education subsector but also reviews the technical and
vocational education and training (TVET) subsector in order to assess policy options to meet the demand
of the economy and the aspiration of parents and students for social mobility.
1.2. KEY POLICY QUESTIONS SURROUNDING TERTIARY EDUCATION

Given the history of Mongolian tertiary education development, three factors appear to be inhibiting its
ability to improve the countrys competitiveness: (i) low cost and low quality; (ii) a mismatch between
the supply of and demand for skills; and (iii) inequitable access that perpetuates the wealth gap and
rural-urban disparities.
Low-cost and low-quality. First, this subsector has expanded with low cost and low quality. Due
to underfunding, per student public expenditure on tertiary education is about $339, slightly higher
than per student expenditure of $206 in primary education and $285 in secondary education. This is
far below the OECDs average of $11,520 (Table 8). Low-cost TEIs can ill afford to use high salaries
to attract qualified faculty members, or invest in better learning facilities or skill upgrading for staff. A
full professors salary in both public and private TEIs is about $300 a month, with little distinction from
that of a school teacher. Insufficient funding has driven even public tertiary education institutions to
rely on the mass admission of fee paying students for financial sustainability, further driving down the
standards.
Poor labor market outcomes and mismatch of skills. A low-cost and low-quality system that relies on
mass enrollment to sustain itself predictably over-produces ill-prepared graduates with grim employment
prospects. In recent years, only about 36 percent of university graduates were able to find a job (MECS
2008). This is likely due to the over-supply of poorly prepared graduates in fields with low demand. By
comparison, the official employment rate for TVET graduates was 60 percent2 in 2008.
Data from Mongolias Labor Force Survey indicate that most of those unemployed in 2002-2003 had
an educational attainment of either incomplete secondary (34 percent) or completed secondary (33
percent). Data from the School-to-Work Transition Survey indicate that, among people aged 15-29,
unemployment rates were lower for vocational education graduates (15 percent) than for general
secondary (22 percent) and lower for those with technical diplomas (8 percent) than for a tertiary degree
(12 percent). The labor market outcomes of graduates from tertiary education and TVET raises serious
questions of how best to match supply with demand.
Inequitable access. There are obvious disparities in enrollment between rural and urban areas, and
between high and low income groups. Although post-basic education has never aimed for universal
access, the inequality in opportunity is striking: 71 percent of all students in tertiary education come
from urban areas, although half of the population live in rural areas. This is in large part due to lower
academic achievement and lower school completion rates of rural students; the charging of tuition fees
presents a prohibitive barrier for aspiration. Fees on average cost about $300 per annum. However,
for herding families with multiple children, it would be very difficult to finance all childrens tertiary
This figure is derived from the MECS official statistical yearbook. A World Bank mission recently visited selected TVET
schools in Ulaanbaatar and Selenge. All visited schools reported employment rates in excess of 80 percent, though they
were unable to provide formal tracer study of their graduates. Interviewed school directors said that they surveyed their
students on an informal basis. MECSs Information, Monitoring and Evaluation Department confirmed that there is no
formal survey or tracer study to collect data on TVET school leavers by TVET schools.
education. About 67 percent of debts incurred by herders are spent on higher education. Even if
families can borrow to pay for the direct cost of schooling, few can afford the opportunity cost of not
getting their children involved in economic activities.
It should be noted that student financial assistance from the State Training Fund (STF) is available to help
low income students to offset their cost. However, the fund is poorly targeted and eligibility covers a
number of categories, including civil servants. Thus, the fund cannot be counted on to offset the tuition
fees or living expenses of a tertiary education.
There is a broad consensus in Mongolia that the tertiary education system should aim to strengthen
quality in order to produce the professional and technical manpower to meet the needs of the economy
and improve Mongolias competitiveness. There is also consensus that equity of access and efficiency of
the use of public resources should be improved. There are thus two sets of policy questions:
Is there an oversupply of tertiary education graduates, given low employment rates? Should
there be a policy to contain the growth of enrolment? If not, what are the options to improve
quality?
What options are available to meet the skill demand of the economy and aspiration for employment
of parents and youths?
This study will examine the following areas in order to answer the aforementioned policy questions and
assess the policy options for both tertiary education and TVET:
Demand for skills: What is the wage premium of the 25-34 age group, compared with the older
age group of 35-55? What are the implications for the demand for skills and, hence, for the policy
towards tertiary education and technical and vocational education and training?
The impact of governance and finance of tertiary education on quality and equity: How is
tertiary education governed? How has the proliferation of tertiary education institutions affected
the financing of public and private tertiary education, and how have these financing trends
affected equity and quality? Is the existing system of accreditation adequate to assure quality?
Policy Options for Reform: What should be done to break the vicious cycle of low-cost and low
quality education from the perspective of governance and finance and to protect the consumer?
TVET as alternative to tertiary education: How feasible is it to channel more students from
tertiary education to TVET? What are the key challenges in TVET? And what needs to be done to
address them?
2. THE DEMAND FOR SKILLS

Since the opening of the economy in the early 1990s, Mongolia has experienced a surge in the demand for
skills. This is the underlying factor for the growth in demand for tertiary education. Better understanding
of the demand for skills would help steer education policy with respect to which subsector and which
discipline to invest in, and what kind of trade off needs to be made.
2.1. RISING WAGE PREMIA FOR SKILLS

An analysis of the Living Standard Measurement Surveys (LSMS) undertaken by the World Bank, found
that wages have undoubtedly risen and, predictably older workers had higher wages between 1998 and
2007 (Figure 2).
Figure 2: Age Earning Profiles of Workers between 25 and 55, 1998 and 2007
(Hourly Wage)
1600
1400
1200
1000
800
Hwage-1998
600
Hwage-2007
400
200
0
25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55
Wage earners with a university education command the highest wage premia compared with both
workers with no education and workers with other levels of education. Table 4 shows the following
trends between 1998 and 2007:
A reduced wage premia of junior secondary education over that of primary education (-0.231);
An increase in the wage premia of high school vocational education over that of primary education
(0.349) is higher than that of general high school education (0.093), signaling the increasing
demand for vocational skills among high school graduates;
An increase in the wage premia of university educated graduates (0.408) over that period, whose
magnitude is only second to graduates of vocational high schools; and
An increase in the wage premia of tertiary diploma (mostly awarded to tertiary level TVET graduates)
(0.639) which is the highest among all adult workers.
Table 4: Wage Premia of Various Levels of Education, 1998 and 2007
1998
2007
Change
1998-2007
Primary
-0.250
0.116
0.366
Junior Sec./primary
0.521
0.290*
-0.231
Senior Sec./ primary
0.603
0.786*
0.183
General high school/primary
0.650
0.743*
0.093
Vocational high school/primary
0.525
0.874*
0.349
Tertiary Diploma/primary
0.667*
1.306*
0.639
University/primary
0.979*
1.387*
0.408
*Statistical significant except for primary.

Source: Sakellariou, 2009. Industry and Skill Premia in Asia. Background Paper for the World Banks Regional Study on
Skills. Preliminary Draft.
These data signal growing demand for higher levels of skills, particularly those developed by technical
and vocational education. The rising wage premia for higher levels of skills are not inconsistent with low
employment rates among tertiary education graduates. It merely indicates that the labor market sorts
well trained graduates with the right skills from those who do not.
Further analysis of the wage premia found a distinctive pattern between the younger and the older age
groups, between men and women, and between the public and private sector of employment (Table 5
and Annex3):
First, males between the 25-34 age group, who have had tertiary education appeared to enjoy
greater growth in the wage premium between 1998 and 2007, a testimony to why there is a
strong household demand for tertiary education.
The wage growth between 1998 and 2007 was much less for tertiary educated women (by a
factor of nearly 10), but their wage premium was much higher than that for men in 1998 (1.22
vs. 0.68) (Annex3, Tables A1 and 2).
Furthermore, the wage was higher for those employed in the private sector during each period
of observation.
For older workers, those aged 35 and 55, men had a higher wage premium than women, but
wage growth was higher for women.
Those who worked in the public sector had higher growth in their wage premium than the private
sector.
Table 5: Wage Premia for Different Levels of Educational Attainment, 1998 and 2007 by Age Group
Education Premiums
(vs. No Education):
25-34 Age Group
Primary
Lower Secondary
Secondary General completed
Secondary Vocational
Tertiary Diploma
University
R-sq adjusted
N
35-55 Age Group
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
1998
2007
(dropped)
0.515
0.392
0.376
0.531
0.827
-0.304
-0.082
0.458*
0.679***
1.01***
1.18***
0.025
384
0.180
2,549
0.839
1.34**
1.63***
1.45**
1.61***
1.94***
0.172
0.554***
0.976***
1.15***
1.64**
1.69***
0.100
702
0.157
4,739
Change (%)
(1998-07)
16.84
80.6
90.2
42.7
-79.5
-58.7
-40.1
-20.7
1.8
-12.9
Note: Based on a Mincerian regression with basic controls. Percentage changes were not calculated when premiums for
both years were statistically insignificant.
2.2. PROSPECTS FOR JOB GROWTH

In which sectors did job growth occur? Data from the LSMS show that mining is the fastest-growing
sector: employment increased by 671 percent for the 25-34 age groups between 1998 and 2007 (Table
6). Mining also attracts a greater number of younger workers than older ones as reflected in the lower
growth of 295 percent among the 35-55 age groups (Table 6). Construction is the sector with the second
fastest growth rate between 1998 and 2007 for the 25-34 age group (368 percent), while transport and
communication came third (110 percent). This suggests that the labor market has potential absorptive
capacity for the younger population and demand for technical, vocational, and engineering skills.
Table 6: Distribution of Wage Employees by Sector, 1998, 2002, and 2007
Industry
Change (%)
(1998-07)
1998 (%)
2007 (%)
25-34 Age Group

Agriculture
Mining
Manufacturing
Utilities
Construction
Trade
Transport/Commun.
Public admin.
Services
(n=383)
4.18
0.78
4.69
3.39
2.08
9.89
6.77
25.52
42.56
(n=2,579)
1.86
6.01
9.93
3.44
9.74
11.02
14.19
9.55
34.25
-55.5
670.5
111.7
1.5
368.3
11.4
109.6
-62.6
-19.5
35-55 Age Group

Agriculture
Mining
Manufacturing
Utilities
Construction
Trade
Transport/Commun.
Public admin.
Services
(n=700)
6.43
1.28
4.70
3.85
3.56
5.13
7.26
22.36
45.29
(n=4,780)
3.28
5.06
9.50
5.84
8.37
7.85
10.66
10.91
38.52
-49.0
295.3
102.1
51.7
135.1
53.0
46.8
-51.2
-14.9
This labor market snapshot is corroborated by the rising importance of these sectors in the economy.
Mongolia is well endowed with mineral deposits, including copper, coal, gold, and uranium. Revenue
from the mining sector, for example, contributed nearly 45 percent of the 2008 state budget and
accounted for nearly 28 percent of GDP. The Erdenet mining company alone accounted for 12 percent
of the countrys GDP in 2008. The transportation and communications sectors accounted for nearly 13
percent of GDP.
10
These trends are likely to continue in the future. Because of Mongolias mineral wealth, many investors
have shown great interest in the high growth potential in South Gobi, where there is a huge deposit of
coal, gold, and copper. As the World Banks Southern Infrastructure Strategy for Mongolia points out,
the need for skilled mining and construction workers will be very large in the region and is expected
to require at least 7,000 additional workers. These workers would be involved in various infrastructure
development projects surrounding the mines such as township development, road construction, mine
equipment operations and maintenance, and railway construction. Besides the increased quantity of
imported labor expected to be brought in to the region, training facilities will need to be established
to help locals benefit from new mining-related jobs, help upgrade locals skills, and ensure a supply of
suitably skilled labor to the mining industry.
Over the medium term, mining companies are beginning to prepare for the transformation of the sector.
Ivanhoe Mines Mongolia LLC, for example, expects to hire 3,000 workers in the region for its steadystate operations and about 8,000 workers during the construction phase of its mining work in the
South Gobi. Energy Resources LLC also forecasts a similar jump: it aims to double the current number
of workers to 800 by end of 2009 and 1,500 in three years time. Both companies are concerned
about the inadequacy of competent (skill and knowledge) workers and wish to be actively involved in
the training of mine workers through formal collaboration with MECS. Some of these companies are
planning to bring in migrant workers (mostly from neighboring China) to work until Mongolian workers
are available.3
Similarly, the Mongolia Employers Federation, a national NGO representing the interest of 8,300
businesses in Mongolia, has acknowledged the gap between the expectations of employers and the
technical competencies of TVET graduates. They have argued that TVET graduates appear to have very
little competence with regards to occupational health and safety or high technological skills and are
currently advocating for curricular reform in the subsector.
The sentiment expressed by these employers appears to be supported by data on student enrolment by
discipline (Annex 5). Only 23 percent of students are enrolled in science and technology courses in 2008
(areas in demand by employers), versus over 50 percent who enrolled in the social sciences and the arts
(areas with low demand). It is not surprising, then, that a skills mismatch dominates the labor market.
Thus, given the potential for development, there appears to be a strong need to improve the quality of
tertiary education and realign the supply of skills to the demands of the labor market. To do this entails
reforming this subsector in several important ways, detailed in the following sections.
Interview with mining official.
11
2.3. MIGRANTWORKERS
The above description of the labor market does not include migrant workers. South Korea is the most
important destination for Mongolian export workers. There are roughly 30,000 Mongolians, in addition
to the domestic workforce of 1.1 million, working in South Korea. If the self-employed and herders
are excluded as denominator, the wage earning jobs in South Korea may add about 6 percent to the
total number of jobs. There are other jobs held by Mongolians in neighboring and far away countries,
although such statistics are not available.
At the same time, there are about 15,000 Chinese migrant workers in Mongolia, mostly in construction.
Some of these jobs filled by Chinese workers are low wage jobs which are not attractive to Mongolians.
Others are skilled jobs for which Mongolians may not be qualified.
In the age of globalization, it would no longer be viable to plan for education with only the national
labor market in mind. Remittances from migrant workers have increasingly become a major source of
wealth and migration relieves pressure on the domestic labor market. In Bangladesh, for example, which
is also a large labor-exporting country to the Middle East and
Southeast Asia, remittances from migrant workers amount to 10 percent of GDP. Hence, in making
policy for education, Mongolia would be well served by taking into account the demand for skills
beyond its border.
2.4. CONCLUSION
On the basis of the above evidence, given the potential for development, there appears to be a strong
need to improve the quality of tertiary education and realign the supply of skills to the demands of the
labor market. To do this entails reforming not only tertiary education but also technical and vocational
education in several important ways.
12
3. THE IMPACT OF GOVERNANCE AND FINANCING

ON QUALITY AND EQUITY OF TERTIARY
Governance and financing impinge on the quality of education. A World Bank study on world-class
universities finds that they have three features: (a) favorable governance; (b) abundant resources coming
from public budgets, endowment, tuition fees and research grants); and (c) excellent teaching staff,
research and students (Salmi, 2009). Figure 3 presents these characteristics schematically. This chapter
uses the concept of world-class universities to assess which features are present in Mongolian tertiary
education and what could be improved.
Figure 3: Characteristics of World Class Universities
Dynamic
Knowledge &
Technology
Transfer
Public Budget Resources

Endowment Revenues
Tuition Fees
Research Grants
WCU
Top
Graduates
ABUNDANT
RESOURCES
Leading-Edge
Research
Supportive
Regulatory
Framework
Autonomy
Academic Freedom
Leadership Team
Strategic Vision
Culture of Excellence
Students
Teaching Staff
Researchers
FAVORABLE
GOVERNANCE
CONCENTRATION
OF TALENT
Source: Adapted from Salmi (2009).
3.1. GOVERNANCE
Governance encompasses the framework in which an institution pursues its goals and policies in a
coherent and coordinated manner. Governance structures are extremely diverse across countries. On
one side of the spectrum is the highly decentralized system in the USA with state university systems for
publicly funded universities and private universities governed by their own board. On another side of
the spectrum are British Commonwealth countries (UK, Australia, India, Pakistan, etc) where tertiary
education is steered by the Commission on Higher Education, or the University and Polytechnic Grants
Commission, which are independent from the Ministry of Education, often comprise of representatives
from industry and the private sector, as well as academics from other countries, and allocate budgets
based on multi-year plans generated by tertiary education institutions. On yet another side of the
13
spectrum lays countries whose ministries of education make policy for tertiary education. While there
is no single system that is intrinsically better than others, there are elements associated with favorable
governance. These are a supportive regulatory framework, institutional autonomy, academic freedom,
strong leadership with strategic vision, and a culture of excellence (Salmi, 2009).
3.1.1. The Public Sector

There were 42 public TEIs in Mongolia, accounting for 28 percent of total institutions, enrolling
about 99,000 students, or 66 percent of total enrollment. The premium universities are in the public
sector. These are the National University of Mongolia (NUM), the Mongolian University of Science and
Technology (MUST), the Mongolian State University of Education (MSUE), the Health Sciences University
of Mongolia (HSU) and the Mongolian State University of Agriculture (MSUA). NUM is strong on law,
international studies, languages, economics, and geology. MUSTs strength is in mining and computer
sciences. Newer ones such as the University of Finance has the best MBA program in the country. The
plan is to consolidate the public TEIs into 16 universities.
Mongolian tertiary education is administered directly by the Ministry of Education, Science and Culture
(MECS) and regulated by the Law on Higher Education and a number of statutes. The Department of
Higher Education is in charge of policy formulation. The Minister of Education has overall responsibility
for tertiary education. Public universities are accountable to MECS.
The Minister has an advisory council which is composed of individuals selected by the Minister himself
and provides advice on a broad range of issues covering education, culture and science. Advisory council
members are often from the higher education subsector. This council meets irregularly, at the Ministers
request, and does not have decision-making authority.
There is no formal council or internal unit mandated for strategic planning for tertiary education. The
usual practice is to form an ad hoc group, always with funding from outside (usually a development
partner such as the Asian Development Bank). The ad hoc group is composed of Ministry staff and
representatives from other ministries and other relevant parties. The main strategic paper such as
the Master Plan for Education is submitted to the cabinet for approval or endorsement. Sometimes,
development partners are invited to comment or endorse jointly (which was happened in case of the
2006 Master Plan). Operational planning is based on longer term strategic plans, and initial suggestions
and proposals are collected from line departments of the Ministry and synthesized by the Department of
Finance and Investment which makes final costing. After the Ministers endorsement, the plan becomes
an obligation to be implemented by officials who are indicated to be in charge.
The presidents or rectors of public universities are appointed by the Minister of Education, although the
Civil Service Sub-Committee led by the State Secretary of MECS is responsible for selection. Each TEI
has a Board of the Directors. According to legislation (Education Law and Higher Education Law), the
government sets common procedures and regulations in the form of charters and bylaws. Institutions
are authorized to make some adaptation when they adopt their own institutional bylaws reflecting
specifics of the institution, giving them some room to maneuver. Therefore, the internal institutional
power distribution can be controlled by the President. Institutional bylaws are subject to approval of the
14
institutional governing board. However, in practice, board members tend to approve the presidents
suggestions with no or minor change. Presidents of public institutions sign a contract indicating
performance outputs annually, so the Minister can set specific conditions and targets that may streamline
or limit the actions of the president.
The Mongolian National Council for Education Accreditation (MNCEA) accredits new private TEIs, but
its coverage remains low. In recent years, program accreditation has also been instituted. Numerous
programs, especially in the fields of economics and management, engineering, have been accredited
by special bodies authorized by the National Council and MECS and subject to the National Councils
formal endorsement.
Faculty members are appointed by the rectors. If faculty members commit misconduct, there is a moral
committee in each public institution to judge them and determine the penalty. In general, Labor Codes
and other internal procedures of the higher education institutions are applied in such cases. However, if
faculty members are incompetent or out-of-date in their teaching contents, there is no remedy. MECS
does not get involved in the dismissal of faculty members from public universities, although in principle
this is possible.
3.1.2. The Private Sector

Since the passage of the 1991 Education Law that established the legal basis for private universities and
institutions, it has not been difficult to obtain a license to run a private college in Mongolia. All that was
required was to have adequate facilities, a faculty, a library, and financial resources. With the increasing
demand for tertiary education in the country and the fact that colleges do not pay value-added or profit
taxes, investing in private colleges is lucrative for many. As a consequence private institutions have
grown from zero to 144 in 2007. Only about 20 percent private institutions or 29 out of 144 have been
accredited.
All regulatory and legislative norms apply to all TEIs regardless of their ownership. So, private institutions
are also required to observe educational standards for designing and performing their academic programs,
and their internal processes should comply with typical regulations established by the Ministry. There
is, however, one major difference between private and public TEIs. The presidents of private TEIs are
appointed by the owner, or are themselves the owner. Their power is not curtailed by any external body.
There is no board required for private TEIs.
The expansion of higher education has not contributed to regional development as much as it should, as
the vast majority of private TEIs are located in Ulaanbataar. Private TEIs are accountable to their owners
who appoint the directors and staff.
Private TEIs are very small, averaging 468 students per institution, closer to the size of a high school
than a university. By contrast, many American and Asian universities have over 10,000 students. Many
Mongolian private institutions offer only a single field of study, such as business. Private TEIs faculty
members also have lower academic qualifications. Only 15 percent have PhDs, compared with 24 percent
of public TEIs, suggesting that private TEIs are not oriented towards research. They also have many part-
15
time staff, who were working full time in public TEIs. Private TEIs limited course offering reduces the
quality of education, as students do not receive a general education that would enable them to have
broad-based knowledge, make connections across different fields, think creatively, develop the skills to
learn on their own, communicate well with others, and be entrepreneurial in their future career.
There is also no regular, national information about the graduation rates and employment rates of each
of the public and private TEIs. Policymakers do not have the evidence to steer tertiary education with
respect to the strengths and difficulties of each institution.
3.2. ACCREDITATION AND QUALITY ASSURANCE

Good governance always has a built-in mechanism for quality assurance (QA) and academic excellence,
as well as public accountability. Accreditation is akin to institutional peer review, in which a community
of experts performs impartial review. In the age of mass tertiary education, and liberalization of service
provision, educational accreditation carries an especially important role. Accreditation is an integral
part of quality assurance. In this process, an external body evaluates the services and operations of an
educational institution or program to determine if the required standards are met. If standards are met,
accredited status is granted by the agency. In most countries, the function of educational accreditation is
conducted by a government agency. In the USA, QA is independent of the government and performed
by private membership associations.
The Mongolian National Council for Education Accreditation (MNCEA) has been in operation since 1998.
It is responsible for accrediting TEIs and TVET centers. Institutional accreditation remains voluntary.
MNCEA is self-financed exclusively from the accreditation services they provide to applying institutions.
The Council is chaired by the Minister and composed of rectors of universities and colleges accredited by
the Council. Although it is an independent agency, since the Council is chaired by Minister, it functions
very much like a part of the Ministry but funded from service fees charged to applying institutions. Since
it is sustained by fee paying institutions, its financial viability is precarious.
MNCEA includes the Board of the National Council, Executive Office, 6 full time officers, 13 accreditation
council members for TEIs and 11 accreditation council members for
TVET institutions. The Council also employs over 150 external evaluators on a part-time basis. Since
its establishment the Council has accredited 91 TEIs including state-owned universities, institutes and
colleges, vocational education and technical training centers and private higher education institutions.
MNCEA has established a two-step process for the assurance of quality in higher education institutions,
vocational and technical training centers and their educational activities. First institutions wishing to
be accredited submit a self-assessment to MNCEA detailing its operational and pedagogical practices.
Subsequently a team of visiting external assessors visits the institution for an on-site accreditation to
interview faculty and students, review assignments, classroom practices, academic publications, and staff
16
academic qualifications. Assessors accredit an institution based on the major criteria for accreditation
in Mongolia, namely: (i) whether an institution has a clear and publicly stated mission; (ii) whether an
institution has made progress towards achieving that mission; (iii) whether an institution has established
the extent to which resources of the institution are directed and organized toward achieving its stated
educational objectives; and, (iv) whether an institution has demonstrated the integrity and commitment
to the accomplishment of its mission.
Program accreditation began in early 2000s. Now numerous programs, especially in the fields of economics,
management, and engineering, are accredited by special bodies authorized by the National Council and
the ministry. Program accreditation is a process subject to the National Councils formal endorsement.
All tertiary programs need to comply with standards approved by the National Standardization Council
but there is no mechanism of enforcement.
The criteria used for accreditation are not derived using international benchmarks. The external assessors
do not include international members. Also, the accreditation work has mainly focused on new private
TEIs. There is no periodic review of academic programs, new or existing, under public TEIs. Until recently,
there was little quality assurance or public accountability. However, the 2003 Higher Education Law
introduced a new form of audit, which can be initiated by the Ministry to examine whether an institution
performs in compliance with established common criteria. The degrees and diplomas dispensed by
accredited private institutions are assumed to confer recognition of the completion of an academic
program of at least minimal quality.
The current challenge for the Government is to strengthen the quality assurance and accreditation
system in a way that can to improve its links with the labor market, begin to reference international
benchmarks in developing the criteria for accreditation, and further engage with distance and overseas
learning activities. It also should reexamine its system of incentives and sanctions and provide students
with more and better information regarding the quality of institutions and programs.
3.3. FINANCE
3.3.1. Public Expenditure on Education
Level of public spending. Currently, Mongolia spends between 6 and 7 percent of its gross domestic
product (GDP) on education, a level of spending similar to former socialist economies and higher than
the OECDs average of 5.8 percent. This level of public spending reflects the high cost of service delivery
to a population dispersed over vast territory, as well as the harsh climate.
As a percentage of total government expenditures, public spending on education has been consistently
above the East Asian average of 16.2 percent (see Table 7 for trends). The high spending on education
reflects the value Mongolia places on education. Even during the global economic crisis in 2009, the
education budget has not been cut. As the overall public expenditure shrank, the share of education
increased to 30 percent of the total public expenditure. The high share of public spending on education
suggests that there is not much fiscal space for a further increase, at least in the medium term.
17
Intra-sectoral allocation. Prior to the crisis, tertiary educations share has declined from 15 percent
of the total public expenditure on education before the transition to 10 percent in 2007, while the
share of vocational education declined from 10 to 6 percent over the same period (Table 7). As primary
education enrollment has expanded, greater efficiency has been realized with higher student-to-teacher
ratios. As more students continue on to secondary education, greater shares of resources have also been
channeled to this subsector. While tertiary education absorbed only 10 percent of the countrys total
public expenditure on education, it accounted for 28 percent of the total student population.
Table 7: Public Expenditure on Education, 1991, 2002 and 2007

1991
2002
2007
GDP per capita (US$) (nominal)
929
1,113
1,431
Education Expenditure as Share of GDP (%)
12%
8%
6.2%
Education Share of Total Public Expenditure (%)
18%
16%
17%
Primary
n/a
40%
27%
Secondary
n/a
26%
37%
Technical & vocational
n/a
5%
6%
15%
15%
10%
17%
17%
13%
n/a
14%
18%
Technical & vocational
10%
5%
6%
Tertiary
10%
12%
14%
% share of total education expenditure:
Tertiary
Per student public spending (as % of GDP p.c.)
Primary
Secondary
Sources: Ministry of Finance (MoF) and Ministry of Education, Culture and Science (MECS) through Education Finance
Study team; Edstats.
A priority of the Government (expenditures in primary and secondary education make up over 50
percent of the overall education expenditures), this subsector accounts for 70 percent of all students
in Mongolia. In the near term as the system expands to 12 years, this sector will require additional
resources to finance the additional grade level and achieve universalization targets. In particular, while
government spending on kindergarten has remained relatively consistent over the years, funding for
kindergartens may become more of a priority in the coming years to encourage on-time enrollment of
six year-olds to grade 1.
In the medium-term, Mongolia faces hard choices. On the one hand, it has to protect spending on
basic education. On the other hand, it has to ensure that the system produces well trained and flexible
18
professional, technical, and vocational manpower needed for economic development. Given the resource
constraints, it was an equitable use of public finance for Mongolia to use cost recovery to finance higher
education, thereby making available more public resources to fund basic education.
In the long-term, however, as Mongolia is expecting the development of mineral resources to bring in
revenue for investment in education, it will have to think through how best to use its new windfall to
make its education system world class. Thus, educational strategy must plan for two potentially very
different medium- and long-term scenarios.
3.3.2. Financing of Tertiary Education

Diversification of funding sources. Mongolias tertiary education has been financed largely by private
expenditure, through the payment of tuition fees, donations, and income generation (Table 8). Tuition
fees are the largest source of financing for HEIs. Private TEIs receive almost 62 percent of their funding
from tuition fees, and public TEIs receive almost 58 percent of their funding from these fees. The State
Training Fund (STF) provides about 28 percent of funding to tertiary education through the provision of
grants and loans to help offset the cost of education for about 40 percent of students in this subsector.
Direct state budget support to TEIs accounts for only 5 percent of total public spending on tertiary
education.
Table 8: Sources of Funding of Tertiary Education Institutions, 2007
Sources of Funding
All
By Type
TEIs
State TEIs
Private TEIs
State Budget
5.2%
7.1%
0.3%
State Training Fund
27.6%
27.6%
21.0%
Tuition Fees
54.7%
54.4%
61.4%
Income from Non-Core

Activities
5.8%
7.1%
1.4%
Donations and Grants
1.7%
2.1%
2.4%
Programs and Projects
2.9%
0.1%
8.3%
Other Sources
2.1%
1.8%
5.4%
Total
100%
100%
100%
Source: Ministry of Education, Culture, and Science (MECS), 2008.
The State Budget mainly finances operating costs of the public TEIs, allocated by the Department of
Finance in MECS. These usually pay for utilities, such as electricity and heating; there is no state budget
for goods and services or repair and maintenance. Capital investment in facilities, equipment, and
laboratories is decided by the Board of Directors in each public TEI. If the TEI does not have the resources
19
to fund investment, the Board of Directors will present their request to MECS which consolidates the
proposals from different TEIs and presents the draft to the Ministry of Finance (MoF) where major
negotiations take place. Then MoF submits the proposal to the Cabinet discussion. The Cabinet submits
the final draft to the Parliament. At the Parliament, all Standing Committees discuss the proposal where
individual MPs can propose specific funding or investment. At this stage, lobbying for specific programs
and projects takes place. Once the Parliament approves the budget with a specified itemized allocation,
the Cabinet, the Minister and other authorities are charged to execute the plan. The dependency on
MECS and Parliamentary approval for funding, the vulnerability to lobbying efforts, and the lack of TEIs
own endowment, reduces institutional ability to plan and act. Funding is on a short-term basis and
unpredictable and undermines medium-term planning and institutional development.
Salaries, which constitute roughly 60 percent of total expenditure on higher education, are funded
by tuition fees.4 There is a strong incentive to expand enrollment irrespective of the capacity of the
faculties to deliver and labor market outcomes. In general, faculty salaries are not that much higher than
teachers salaries, making teaching unattractive for people with high levels of skills, particularly if they
are young and well trained. Since the Parliament approves investment budget, public institutions are
accountable to the government. Furthermore, as demand for tertiary education outstrips supply, there
is little incentive for TEIs to be accountable to the students they serve, or to provide information about
their own performance in order to facilitate the consumer of education to make informed decision
about enrollment and field of study.
For research, there are two types of research grants, given on a competitive basis. The first grant is
given through the Mongolian Academy of Sciences to the scientists and researchers. Every year up to 16
people receive the grant for an amount of up to 4,000,000 MNT (US$3,600). They are those who carried
out a high level theoretical research and those who need funding for their research work, which was
approved to be applicable into practice. By comparison, the USA National Institute of Healths annual
budget ranges from US$26-30 billion, and a research grant can run into the amount of hundreds of
million dollars.
The second grant is received by young scientists for their outstanding research work. Every year a
conference on scientific research is held and young scientists present their research work. The Commission
of Young Scientists select the top ten young scientific works by each sector based on the decision of the
conference on scientific research and the MECS endorses the decision to select the young scientists to
receive the grant.
There is no financial scheme to provide incentives to encourage efficiency, for example, the allocation
of the budget by the number of students who graduate on time, the number of students who find a
A May 2009 World Bank mission selectively examined the categorical expenditures of six universities in Ulaanbaatar
and found that these universities spent between 55 and 68 percent of their revenue on staff and teacher salaries. In
several instances, expenditures on equipment and facilities were largely financed by private donations (e.g., computer
laboratories in two universities were sponsored by private commercial interests).
20
job, or to reward publications in international peer reviewed journals. The lack of resources to fund
improvement in facilities, improvement of the teaching and learning environment (laboratories, libraries,
etc.), faculty upgrading, research, and conference participation has hampered the ability of Mongolian
tertiary universities to deliver high quality education.
According to official statistics, 25 percent of faculty members in public universities are part-time staff,
seriously affecting the quality of teaching and research. Only 16 percent of faculty members in all
public universities have a doctoral degree, while about 43 percent have masters degrees. In private
universities, only 5 percent have doctoral degrees and 23 percent have masters degrees (Annex 7).
There is no predictable funding for the upgrading of qualifications for faculty members or for attending
international conferences, and there is no systematic tracking of faculty members publication and
research efforts.
Unit cost. Mongolias per student public spending on tertiary education (including allocations from the
State Budget and allocations made to the State Training Fund) is a paltry $339 per year. This amount is
higher than per student expenditure of $206 in primary education and the $285 in secondary education.
However, by any of these analyses, per student spending is extremely low in comparison with the
OECDs average of $11,512 and Chinas $854. Spending on tertiary education per student as a multiple
of spending on primary education is low, 1.6 to 1, compared with the international range of 6 to 1
to 30 to 1. Since the quality of tertiary education depends heavily on the quality of faculty members,
laboratories, equipment, and libraries, which are driven by international prices, the extremely low unit
cost in Mongolia suggests that its quality is far below international standards (See Table 9).
Table 9: International Comparison of Per Student Spending By Level of Education (US Dollars)
Junior
Secondary
Senior
Secondary
Pre-primary
Primary
N/A
206
Budgetary
227
236
278
343
854
Budgetary,
fees, others
403
300
378
378
2063
4,888
6,252
7,437
8,366
11,512
USA
8,301
9,156
9,899
10,969
24,370
Korea
2,426
4,691
5,661
7,765
7,606
Japan
4,174
6,744
7,630
8,164
12,336
Brazil (2005)**
1,215
1,425
2,359
899
9,994
Chile (2005)**
2,952
1,936
1,865
1,965
6,620
Mongolia (2007)
China (2007)
OECD Average (2005)
285*
285*
Tertiary
339
Source: China Educational Finance Statistical Yearbook 2007; OECD Education At a Glance, 2008. World Bank Global
Development Finance Database 2007 for exchange rate $1=7.6075.
Note: *Mongolia data do not disaggregate between junior and senior secondary education. **Brazil and Chile are
OECD partner countries and included in the table for comparison with Latin America.
21
3.4. TUITION FEES AND STUDENT FINANCIAL ASSISTANCE

Shift in financing from public to private through fees. In 1992, the Mongolian government
passed Resolution No. 107 which endorsed new regulations for post-secondary education financing.
In particular, this resolution established the State Training Fund to administer and manage financial aid
programs for students.5 These new financing measures governing board consists of six officials, selected
for their positions by the Ministry of Finance and the Ministry of Education, Culture, and Science. No
institutional or public representatives are included on the Board.
drastically reduced the number and amount of government subsidies to the tertiary education subsector
that had been a staple since the Soviet-era. The new legislation allowed institutions to begin charging
tuition and fees up to the amount of per student variable costs, enforced tuition grants for students
enrolled within the state quota, provided need-based tuition and stipend loans to students, and provided
TEIs with government subsidies to cover the fixed costs of their operations.
Since that time, public funds have been channeled to tertiary education institutions through the STF.
As a proportion of funding, the State Budget itself provides a relatively small percentage of funds to
TEIs. The STF funds themselves, however, are not well targeted to the poor. Only 39 percent of students
receive funds based on needs or disadvantaged status, while 40 percent are children of civil servants
(Table 10).
Table 10: State Training Fund Recipients by Program Area
2003
Grants
2004
2005
Number
Number
Number
Need-based Grants
8,119
23.3
13,294
33.5
13,831
33.5
Disadvantaged Group
Grant
2,216
6.4
2,454
6.2
2,149
5.2
153
0.4
149
0.3
126
0.3
Public Employee Family Grant
15,915
45.7
16,335
41.2
16,428
39.8
Loan
8,409
24.2
7,390
18.6
8,696
21
Total
34,812
100
39,622
100
41,230
100
Merit-based Grants
Source: Ministry of Education, Culture and Science, 2007.
5
The State Training Fund is a semi-governmental agency which is governed by an independent board but is operationally
attached to MECS. It is responsible for the implementation of all state financial aid programs. Its
22
Tuition fees have constituted a barrier to aspiration for higher education for the poor, if not a barrier to
entry. Mongolian bachelors degree students pay an average of 383,000 tugriks (US$270) per academic
year, which is roughly 16 percent of the Gross National Income per capita. This is higher than most OECD
countries, on par with South Korea, and lower than Chiles (see Table 11 for international comparison).
The fee levels in private TEIs are similar. When living expenses are included, an average student would
have to spend over 150,000 additional tugriks (over US$120) per year. The policy of cost recovery is
cushioned, to some extent, by the availability of grants and loans to students through the State Training
Fund (STF). On average, a recipient student would receive assistance in the amount of 80 percent of
tuition.
Table 11: A Cross Country Comparison of Tuition Fees as Percentage of per capital Gross National Income
Country
Public Universities
Private Universities
Mongolia
Australia
16%
11.3%
16%
21.9%
Canada
10.0%
n/a
Japan
11.8%
18.5%
Korea
16.3%
31.1%
New Zealand
6.5%
n/a
United Kingdom
5.2%
4.9%
United States
11.4%
42.0%
Italy
3.3%
11.5%
Netherlands
4.4%
4.4%
Israel
12.0%
29.2%
Chile
27.9%
32.0%
Sources: Provided by Salmi, drawn from OECD Education at a Glance 2007; Background Report; World Bank World
Economic Indicators.
Expansion of eligibility criteria. Since its inception the mandate and the operations of the STF have
changed several times.6 The mandate of the STF stems from the countrys Constitutional rights to
In 1995, new and detailed regulations were issued for financial aid for students that specified the criteria for eligibility,
the conditions for the repayment of grants and loans, and the establishment of a satellite program to provide financial
assistance to students from the families of public employees. Other legislation at the time reduced the coverage of
grants to needy students only and abolished the state quota system. State financial aid was also extended to Masters
and Doctoral students, those pursuing graduate degrees abroad, and outstanding high school graduates and college
students with a GPA of no less than 3.8 for four consecutive semesters. In 2000 tuition grants were extended to nomadic
families with less than 700 heads of livestock on the basis of one child per family and also to a maximum of one student
per family in which three or more children were enrolled in TEIs (Box 1, below).
23
education: the STF aims to provide financial support to low income, academically able students in order
to provide them the opportunity to pursue tertiary education, regardless of their ability to pay. Annually,
about 20,000 students apply for university admission, but under current resource constraints, the STF
funds on average only about 6,000 7,000 students per year.
Need-based loans. Loans represent the third largest financial aid program in terms of the number of
students covered, as well as in the percentage of allocation of the STF resources.
Students who receive loans must repay them within ten years. They have a grace period of six years
after their graduation. After the seventh year, the STF raises the interest rate on the loan to 0.5 percent
above the average annual bank rate for commercial loans. Loans can be forgiven if recipients have been
employed for eight consecutive years, including five years in a rural county. In 2004, the government
universally forgave all outstanding loans.
Non-need and non-merit based grants. Grants represent the largest of the STFs financial aid program.
Children of public sector workers can receive both grants and loans. Further, the tuition grant is for only
one student pursuing an undergraduate degree for the total duration of the parents employment in the
public sector. Grants are made on a semester basis and are renewable if the recipient maintains full-time
enrolment and maintains a GPA of at least 2.0 and the parent remains employed by the government.
The widening of the eligibility criteria in 2000 with the passage of Government Resolution 201 has
extended coverage to the children of civil servants (Figure 4). In 2007, over 17,000 students, or over 40
percent of all recipients of the STF were children of civil servants (Table 12). Although the poor are more
likely to receive government tuition aid for tertiary education, approximately 54 percent of beneficiaries
are non-poor. 7
Figure 4 : The Widening of STF Eligibility Criteria
1993-1995
Stipends for needy,
talented and foreign
students and tuition
fee to students who
studied by state
contract
1996-1999
Tuition loans for
very poor students
and disadvantaged
families
Small number of
grants to orphans/
disabled students and
MA/PhD students in
developed countries
2000+
Loans for poor students and
disadvantaged families
Grants to orphans, disabled and
disadvantaged students
Grants for one child of civil servants
Grants to herders, low income
students and families with 3+
children
Scholarships to able students
7
Since 2000 the number of higher income students receiving assistance has grown by 36 percent, from 13,487 to
18,402 (Interview with STF official). Higher income students are defined as those who would not be eligible for a grant
from the STF based on their family income level.
24
Table 12: State Training Fund Allocation of Resources, 2007

No. of Students
Covered
Average Amount per Year

(USD)
Resources as % of STF
Funding
STF Grant Program
17,053
222.16
39.0%
STF Loan Program
8,007
232.25
19.2%
State Employee Childrens

Fund Grant
6,442
246.17
16.3%
State Employee Childrens

Fund Loan
11,198
221.13
25.5%
Consequences of widening eligibility. Given the constraints on the STF budget, the provision of
assistance to non-poor students may mean that some poor students will be displaced. It is likely that this
situation is already occurring: as shown in Table 3, there are significant spatial and income disparities in
completion rates of tertiary education, particularly for those living in rural areas and those in the poorest
income quintile. It is unlikely that students of civil servants, one of the fastest growing groups, would
meet the criteria of being both poor and meritorious.
The MECS annual budget to the STF strives to give financial assistance to 60 percent of enrolled students.
This percentage was based on a student survey that solicited opinion from students as to their level of
interest in a financial assistance scheme. MECS does not, however, indicate the extent to which the
scheme is reaching its target group or the proportion of needy students that are denied access to
financial assistance because places within the scheme are limited.
Further, as indicated in Table 13, there is a significant shortfall between the average level of assistance
provided under the financial assistance scheme in 2007 and the average cost of public tertiary education
(including living expenses). Since STF funds do not cover living expenses, aid recipients who enroll in
an institution must cover this difference out of pocket, which can be significantly costly to many. This
gap is even higher for students at high cost public and private institutions. Based on data from MECS,
tuition represented approximately 13 to 36 percent of yearly costs of attending a college depending on
whether the student lived with his or her family or not.
Table 13: Proportion of College Costs Covered by Tuition/Financial Aid
For those living with
parents
For those living in

dormitories
For those living in private

(rented) housing
Living expenses for an

academic year, Tugrik
832,000
1,262,000
2,342,000
Tuition
300,000
300,000
300,000
Percent of tuition
36.1
23.7
12.8
Note: Based on Altantsetseg, 2002, World Bank, 2008.
25
3.5. STRATEGIES OF THE UPDATED EDUCATION SECTOR MASTER PLAN

The updated Education Sector Master Plan (2010) recognizes many of the issues identified in this policy
note. Its strategies to improve quality and equity of this subsector and matching of supply with demand
are as follows:
By 2017, increase enrolment in engineering, technology, natural sciences, education and agriculture
from 32 percent to 41 percent of total enrolment, whilst reducing enrolment in humanities, law
and medical sciences from 30 percent to 29 percent.
Provide tuition loans from State Training Fund for 3 out of every 5 students majoring in engineering,
technology, natural sciences, education and agriculture, and for 2 out of every 5 students majoring
in other subjects, and introduce merit scholarship and set an optimal ratio between tuition loans,
grants, and scholarship.
Provide funding of $25, 000 each for NUM, MUST, MSUE, HSU, MSUA, for purchasing textbooks,
training manuals and other publications in foreign languages.
Register national universities to inter-library network, and ensure that university teachers, students
and researchers have free access to inter-library network.
Provide foreign grant and support on in-service training for university teachers.
Develop the capacity of university teachers, through professional development and joint program
with international universities, and provide support to those working in rural areas
Set up a quality assurance system for higher education institutions.
Set international standards for premier universities.
Undertake a comprehensive review of the financing and governance of higher education

institutions in Mongolia, aimed at course rationalization.
Undertake a comprehensive review of higher education provision in Mongolia aimed at course

rationalization and national course and institutional accreditation standards.
In addition, in 2010, the Parliament has approved the consolidation of some 42 public TEIs into 6,
mostly through merger. There is a clear signal about the seriousness of reforming higher education. To
improve quality and relevance of higher education, it is necessary to undertake major structural changes
which will be described in Chapter 4.
26
4. POLICY OPTIONS TO REFORM

TERTIARY EDUCATION
International experience suggests that a highly educated population will generate its own dynamic for
development. Better educated people are more adaptable to technological change, can learn new
skills faster, and are better prepared to generate income for themselves through creative work and
entrepreneurship. They are also more internationally mobile and more resourceful in exploring income
generating opportunities beyond national borders. In the globalized economy, it is impossible to predict
change. A manpower planning model that matches enrollment with job projection is unlikely to improve
the skills needed for the future. Higher education policy should look beyond the medium-term demand
of the national labor market and the formal wage sector. While there should not be a policy to contain
enrollment growth, there must be effective mechanisms in place to ensure quality and equity, and
to provide incentives to develop a culture of excellence in TEIs. This chapter offers four measures to
improve quality and a measure to improve equity, in addition to the strategies outlined in the updated
Education Sector Master Plan of 2010.
4.1. DIFFERENTIATE ROLES OF TEIS AND IMPROVE SYSTEM ARTICULATION TO

FACILITATE LIFELONG LEARNING
Given the diversity of TEIs in Mongolia and the strong social demand for higher education, there is an
urgent need to differentiate the missions and pools of students for different tiers of its public and private
TEIs. Even in OECD countries, only a handful of universities achieve the kind of concentration of top
researchers, professors, students, facilities, and resources to attain world class status (Table 14). In the
USA, only about 30 out of 5,000 TEIs are research universities. However, second tier universities and/or
community colleges have different but equally important functions, which are to serve community and
local development. Box 1 describes how the University of California System differentiates the roles of its
TEIs to better serve both the state and students.
Table 14: Tripartite System of Tertiary Education in Selected OECD Countries
Country
Tier I
Tier II
Tier III
Australia
8 research universities
32 new universities and

some TAFE* colleges
68 TAFE* colleges
China
36 key universities
Key universities in 31
provinces and municipalities
Some 2,000 provincial, municipal,

and private universities.
France
37 Grande Ecoles
86 universities
123 instituts universitarires de

technologie (IUT)
280 sections de brevet de
technicien suprieur
Germany
78 technical and
comprehensive
universities
182 Fachhochschulen FHS,

43 Berufsakademien
Dual training institutes
27
Korea
(South)
10 public universities, 7
private universities
24 public universities
150 private universities
4 public junior colleges

144 private junior colleges
Mexico
10 federal and state

universities
8 private universities
54 public universities
184 private teacher training
colleges
249 public teacher training
college
60 technical universities
211 technical institutes
995 private career colleges
United
Kingdom
20 Oxbridge and
Russel universities
53 newer and polytechnic

universities
340 further education colleges
USA
690 Ivy League, public

and private research
universities
1760 polytechnic, colleges

and smaller state universities
1075 community colleges and

institutes of technology
Source: Mikhail, 2008.
While it could be helpful to provide different tracks for scientific, professional, para-professional and
vocational training, it is important to recognize generic, soft skills and life-skills needed to survive in
a globalized economy and to generate self-employment. These include effective communication (oral
presentation and expository writing), proficiency in a language of wider communication (e.g., English or
a major regional language), general knowledge of economics, law and business (e.g. banking, finance,
accounting and marketing), general scientific literacy and computer skills, and general knowledge about
world affairs and cultural sensitivity. While some of these skills have been considered traditionally as
humanities and professional education, they have a strong utility function to improve the adaptability
of graduates in the future.
Since these subjects are not very costly, and are offered by many of the private TEIs, it is important to
make use of their comparative advantage and improve system articulation so that students can move
from one TEI to another, from the private to the public sector, and vice versa, to improve their skills and
qualifications.
28
Box 1: Californias System of Universities and Community Colleges
The State of California differentiates the missions and pool of students for three tiers of its public higher
education system -- University of California (UC), California State Universities (CSU), and community
colleges. The UC draws from the top 8% of high school graduates, CSU, from the top 33%, and
community colleges have an open admission policy to students with a high school diploma, or a
general education diploma, or simply over the age of 18. It is also very low cost at $20 per credit per
semester. There is a statutory coordinating body for the entire system, and the key feature of the
system is the articulation and transferability of credits and students from one tier to another.
Community colleges offers a range of programs: (i) Associates degrees take two years and allows
students who have completed the necessary core requirements to transfer to a four-year institution
and earn a degree. (ii) Certification is provided in a number of vocational training (e.g. nursing,
computer repair, law enforcement) which require preparation for a state or national examination,
or where certification would allow a higher salary upon entering the workforce. (iii) Local services of
local interest include job placement, adult continuing education classes, customized training with local
businesses, and working with high school dropouts to earn a high school diploma or obtain a GED.
(iv) Bachelors degrees are gaining popularity. Some community colleges offer specialized programs in
conjunction with other universities.
4.2. CONCENTRATE RESOURCES TO FUND PREMIER UNIVERSITIES THROUGH

COMPETITIVE FUNDING
An examination of the worlds top universities found that high quality tertiary education is supported
by abundant resources. Harvard University, for example, had an endowment of $37 billion, an annual
expenditure of $3.2 billion, and a per student expenditure of $105,041 before the crisis (Table 15).
Other top universities in the world have expenditures in similar orders of magnitude.
Table 15: Ranking of the Worlds Top Universities, 2007

SJTU 2008
ranking
THES 2008
ranking
Universityr
Annual
expenditures
(US$)
Student
enrollment
Expenditures per
student
(US$)
Harvard Universitya,b
(United States)
$3,170,650,000
29,900
$106,041.81
17
Stanford Universityc
(United States)
$3,265,800,000
19,782
$165,089.48
36
University of California,
Berkeley (United States)
$1,700,000,000
32,910
$51,656.03
University of Cambridged
(United Kingdom)
$1,470,940,000
25,465
$57,763.20
29
Massachusetts Institute of
Technology (MIT)m (United
States)
$2,207,600,000
10,220
$216,007.83
California Institute of
Technologye (United
States)
$2,287,291,000
2,245
$1,018,837.86
10
Columbia Universityg
(United States)
$2,690,000,000
23,709
$113,459.02
12
Princeton Universityf
(United States)
$1,196,570,000
6,708
$178,379.55
University of Chicagoh
(United States)
$1,497,700,000
14,962
$100,100.25
10
University of Oxfordi
(United Kingdom)
$1,081,350,000
23,620
$45,781.12
Source: Salmi, 2009. Note: SJTU stands for the ranking by Shanghai Jiaotong University of China, and THES stands for
ranking by Times Higher Education Supplement.
By contrast, Mongolia has spread its scarce resources too thinly to finance tertiary education. Only if
higher education is of high quality Mongolia can develop the skill base through teaching and learning,
and develop the knowledge base through research and knowledge transfer to society. To reverse
the trend of providing low-cost and low-quality education, it is imperative to concentrate resources
in financing on a few premier institutions that attain world standards at least in its undergraduate
teaching. GoM should also identify programs that have potential to become world class. There are
certain areas that Mongolian universities are very strong at, namely, geology, mining, and paleontology.
Strengthening the comparative advantage need not be extended to the entire institution, but to enable
certain department or certain subfields to rise above others.
Sometimes, specific events or a natural endowment can provide the opportunity for a field to excel.
For example, the University of Hong Kong directed its focus on the SARS epidemic in 2003, and its
biochemistry department mobilized all the staff to engage in relevant research. Afterwards, it became
one of the worlds top centers for research on virus epidemics, and is consulted by World Health
Organization when other pandemic comes along. Similarly, its Department of Architecture started to
study buildings abilities to withstand earthquakes after its involvement in the Wenchuan earthquake
in 2008, and is bolstering its reputation in this area. Mongolian universities, if properly supported by
adequate resources and plunged into the international network of researchers, can rise to the occasion
under similar circumstances.
In the process of building up premier programs and institutions, it is important to identify the comparative
strengths of various institutions and their academic offerings and build on those strengths. However, it is
essential to use a competitive process to aid the targeting of resources to finance premier institutions.
30
In Mongolia the creation of a competitive fund should be considered to aid the process of consolidation
and rationalization. In such a scheme, TEIs are asked to submit their funding proposals along with their
respective institutional development plans with key performance indicators (including faculty strengths
in course offerings, academic qualification, research and publications, student graduation rates,
employment rates, and student evaluation results). The funds will be used to fund equipment, facility
improvement, and staff upgrading and professional development. They could also be used as block
grants to cover salaries for faculty members. This would be akin to research grants in US institutions,
which also cover the salary of researchers on a multi-year basis. This would reduce the incentives to use
enrollment expansion to sustain financial viability, and encourage faculty members to devote time on
teaching and research. Student fees could be used by the institutions for supplemental investments.
Decisions should be made to award funding to the disciplines and courses that are well related to labor
market needs. In this way, those weaker programs would be weeded out or have to cooperate with
stronger programs in order to survive. It is not recommended to set admission quotas for the institution,
but essentially to use the competitive funding mechanism to guide the rationalization process. Box 2
describes international experiences in using competitive funds to stimulate institutional development
and cultures of excellence.
Merely merging institutions, however, does not necessarily achieve cost savings as salaries continue
to rely on tuition fees. Thus, the competitive funds should also include coverage of at least a certain
percentage of salaries and reward faculty members for research and contribution to regional and national
development, in order to realign incentives.
The creation of a competitive fund would entail additional public expenditure and a replacement of the
existing system of financing. But without such a mechanism, it would be difficult to break the cycle of
low cost, low quality education.
31
Box 2: Competitive Funding as an Innovative Financing Tool
In recent years a number of countries have introduced competitive funding schemes as an innovative
and flexible financing mechanism to allocate resources to TEIs. Competitive funds can target a variety
of sector issues and are an output-oriented funding mechanism. As such, they can increase costeffectiveness and enhance quality and relevance.
Under most competitive funds, institutions compete for investment on the basis of their own strategic
planning and choices. An independent body selects the best projects based on potential, performance
and track record, encouraging a culture of fair competition and usually peer evaluation. Selection is
based on transparent objectives, eligibility and selection criteria.
There are several advantages to using competitive funds: they provide incentives for institutions to
perform; they encourage institutions to clarify their mission and strategy, and engage in medium
term planning; and they can cater for complex indicators of impact and success that are tailored to
institutional characteristics and needs.
Competitive funds in recent years have supported a range of activities, from traditional investments to
systematic reform. In Bangladesh and Indonesia, competitive funds have supported quality enhancement
by providing grants for equipment, libraries, laboratories and buildings for study programs in technical
training institutions, and undergraduate and graduate university programs in priority fields. In Chile,
the Governments competitive fund has supported systemic change by providing grants in areas such
as degree structure and curricular innovation, transfers of academic credits, secondary to tertiary
transition, inclusion of marginalized groups, and skill upgrading of faculty members.
A critical component to carry out a successful competitive fund is central and institutional capacity. The
Government must set the rules of eligibility, selection, and implementation criteria, and institutions must
have the capacity for the supervision of internal and decentralized projects. While competitive funding
schemes are flexible and are periodically renegotiated to reflect changes in macro environment, they
do offer less predictability than formula funding. However, they remain extremely useful in stimulating
systemic change.
Source: World Bank Staff Reports
4.3. HIGHER EDUCATION COMMISSION AND QUALITY ASSURANCE

The lack of an integrated governance structure to guide the strategic development of tertiary education
has contributed to the fragmentation of the system and the poor quality of education. It is desirable
to set up an autonomous National Commission for Tertiary Education with broad representation
from industry, key professions, and national and international academics so that diverse views are
harnessed. The Commission should be charged with the responsibility to set the strategic direction
for tertiary education, use inputs from the Quality Assurance system to allocate block grants, oversee
the development of the National Qualification Framework, and monitor how TEIs facilitate regional
development. The Commission could also
32
sponsor policy analysis, conduct strategic planning. In the UK, for example, the Commission on Higher
Education has helped set strategic direction by articulating five aims: (i) enhancing excellence in learning
and teaching; (ii) widening participation and fair access; (iii) promoting employer engagement and skills;
(iv) enhancing excellence in research; and (v) enhancing the contribution of HE to the economy and
society. These mission statements are very close to the vision of Mongolian higher education. Box 3
describes the experience of New Zealand, a small country with a population of 3 million, in how it uses
the Commission to steer the tertiary education system to achieve national objectives.
Higher education should engage more directly with employers to identify changing job requirements and
monitoring employers expectations of graduates. There is a need for a systematic approach to labor
market information provision through tracer studies of graduates to track trends in earnings nationwide
and discern regional trends. The Commission should require all TEIs to report on agreed performance
indicators and labor market outcomes of graduates by areas of study, as a basis for its decision to
rationalize and consolidate TEIs. The Commission should publish these statistics to provide information
to consumers and hold TEIs publicly accountable.
The establishment of this body should be done simultaneously with invigorating the MMCEA, which
should be responsible for the quality assurance of all academic programs and institutions. The QA process
should identify strengths and weaknesses of each institution for two purposes. The first is to provide
information and advice for the institutions to improve themselves and the second is to provide guidance
to policymakers for rationalization and consolidation of the system. Involving professional associations
in quality assurance is one mechanism that has proven useful in many countries in providing feedback
to tertiary institutions and in helping link labor market needs to the academic programs of colleges and
universities. A quality assessment mechanism should also be introduced for bachelor, master and Ph.D.
programs. The involvement of professional associations in Specialized and Professional Accreditation in
the United States is one successful example.
The QA mechanism should also have consequences. It should enable the Commission to make decisions
about the rationalization and consolidation of programs. The Accreditation Agency should also
participate in the Asia-Pacific Quality Assurance Network to raise its standards of world-class quality
using international benchmarks. Box 4 describes the experience of Singapore in its efforts to improve
the quality of private TEIs.
33
Box 3: New Zealands Tertiary Education Commission
The Tertiary Education Commission Te Amorangi Mtauranga Matua (TEC) is governed by a Board of
Commissioners which is appointed by, and responsible to, the Minister for Tertiary Education. The TEC
operates within strategic and policy frameworks set by the government. The TEC is a Crown Agent
which must give effect to government policy when directed by the Minister for Tertiary Education
Under the Crown Entities Act, the Minister may direct the TEC to undertake any tasks that are
consistent with the TECs functions. The Minister may not direct the TEC to provide or deny funding
to any specified organization. The Chief Executive of the TEC has an independent function under the
Education Act 1989 to monitor tertiary education institutions for risks related to financial or operational
viability and to report directly to the Minister.
The TECs principal function is to give effect to the tertiary education strategy. The TEC is also required
to operate the tertiary funding system generally, monitor the performance of tertiary education
organizations, and provide policy advice to the Minister for Tertiary Education.
The TEC manages Government funding for TEIs, provides policy advice and implementation across the
sector, and provides relevant support to TEIs. Its actions are guided by the Governments priorities for
higher education, namely (i) a high-trust and high-quality tertiary funding environment; (ii) worthwhile
qualifications for all students leaving the education system; and (iii) an appropriately trained and
competent workforce. In pursuing its directive, it works with several key government agencies,
including the Ministry of Education , the New Zealand Qualifications Authority , and the Ministry
of Research, Science and Technology, as well as a range of private, education sector and industry
representative groups.
The Board of Commissioners is responsible for governance. It is appointed by, and responsible to, the
Minister for Tertiary Education. It comprises at least six, but not more than nine, members. Current
board of commissioners consists of an executive chair, deputy chair (university leader), academic and
industry representatives, and one currently enrolled student.
The Commissions annual operating revenue is approximately NZ$ 75 million, 80 percent of which is
provided by the Ministry of Education.
Sources: Tertiary Education Commission of New Zealand, http://www.tec.govt.nz/
Tertiary Education Commission of New Zealand. (2009). Annual Report for the year that ended 30 June 2009.
Retrieved 3 February 2010 from http://www.tec.govt.nz/Documents/Publications/TEC-Annual-Report-final-2009.
pdf
34
Box 4: How Singapore is proposing to deal with the proliferation of private tertiary education
institution to assure quality
Singapore has about 1,000 private institutions of various sizes and quality. The largest have over
10,000 students, and the smallest have a few hundred, offering a single field of study, e.g. hotel
management. As more and more foreign students, particularly Asian students, flock to Singapore to
study and mostly enroll in these private institutions, the Government is concerned that the reputation
of Singapore as a high quality producer could be tarnished. As a result, it is preparing a law to regulate
private tertiary education which is likely to pass in September 2009. The law will require private
tertiary education institutions to be accredited from time to time. For institutions that are judged to
be of dubious quality, they would be given one year to improve themselves or face closure. They will
then have to be re-accredited again. For better institutions, the duration of operation could be up to
five years, but they are still required to be re-accredited. Under these new regulations private TEIs will
be under pressure to perform and improve quality.
Source: Interview with Mr. Lin, chair of the private tertiary education council on March 31, 2009.
The current accreditation system in Mongolia does not engage with distance or overseas learning
activities and thus is not providing its students with knowledge about how these programs compare to
domestically-offered ones. Thus the internationally growing trend towards open and distance learning
presents new challenges which threaten the quality of tertiary education in countries with less than
strong regulatory capacity like Mongolia. The need to strengthen the capacity of national quality
assurance systems is therefore urgent both to take advantage of these new opportunities and to protect
the public against fraudulent or questionable quality providers.
4.4. PUBLIC ACCOUNTABILITY AND CONSUMER PROTECTION

Annual publication of TEIs performance indicators, and student employment statistics is key to ensure
public accountability and consumer protection. In pursuing fields with little labor market demand,
students could invest a substantial amount of money and time only to discover at the time of graduation
that their skills have no place in the economy. Thus, making such labor market information available
would help parents and youths make informed decision regarding whether to pursue higher education
or other tracks of training.
In this regard, international experience (e.g. Chile, Colombia, Italy) with labor market observatory could
provide relevant example for Mongolia. Box 5 describes how these labor market observatories work to
guide students and parents in making a decision about entering tertiary education and which field to
pursue.
35
Box 5: Labor Market Observatories in Italy and Chile
Orientation and employment opportunities are the two essential steps that can determine the success
of tertiary educations ultimate purpose: training citizens that would contribute to a countrys economy,
development and growth. Dropout and unemployment demonstrate, on the contrary, a failure or
inefficiency of the education system to reach that goal, and can often reveal to be extremely costly to the
society as a whole (in terms of education public spending loss, taxation loss, and public financial support
for unemployed).
Two innovative initiatives have intended to respond to the challenges of orientation and employment
opportunities: AlmaLaurea in Italy, and Futuro Laboral in Chile. Both projects seek to provide useful,
practical and easy-to-use online information on career perspectives and job opportunities. The overall
idea is to equip all tertiary education stakeholders, in particular students and families, with relevant
information to make the right choices. Whereas AlmaLaurea focuses more on the after graduation steps,
Futuro Laboral gives priority to the previous stage of tertiary studies.
AlmaLaurea provides the largest Italian database of graduates resumes (900,000 from 50 universities as
of June 2007) and now gathers 67% of all Italian graduates profiles. AlmaLaurea was created in 1994,
is currently managed by a consortium of Italian universities and supported by the Ministry of Education,
Universities and Research. The services offered to graduates and students include the following: online
posting of graduate resume, advices to improve resume, and possibility to update it regularly; access
to a large bank of job offers and enterprises characteristics, and possibility to answer job offers online
through AlmaLaurea Website; postgraduates programs are also described to better match students
needs for further education; alert are sent via emails to keep the user on track and facilitate his or her
proceedings.
The incentives for universities to subscribe to AlmaLaurea are significant: provide more options to their
students, think about new curricula and orientation, and develop internships/first jobs options. AlmaLaurea
also provides annual information on the occupational conditions of graduates, including PhDs, gathers
archives of graduate and doctorate thesis titles, validates the administrative records of graduates, and
helps promote post-graduate and master courses through the website.
Employers, on their part, have online access to the largest Italian database of graduates resumes, and
can easily purchase CVs, select best candidates through criteria matching, announce new job offers and
describe their company to attract best graduates.
Futuro Laboral focuses more on the orientation stage. Supported by the Ministry of Education and
mutually organized by the University Adolfo Abnez School of Government and the University of Chiles
Department of Industrial Engineering, it aims to provide orientation tools to youth and students. As such,
Futuro Laboral provides information on the occupational situation of graduates of hundred different
professional and technical careers that represent 75% of technical and professional graduates. These
hundred careers are thus described, with salary ranges, the type of study they imply and employment
opportunities they generate.
As with AlmaLaurea, Futuro Laborals approach is very practical and user friendly. Through its website,
students can look for a program by level, by area, or by career, they can visit foreign websites containing
information on career and work in other countries, and have access to an online library referring to a
large bank of information on the employability of technical and professional graduates.
These two initiatives show particular examples of labor market observatories that aim to provide a
better understanding and match between individuals professional aspirations, tertiary education, and
occupational trends. As such, they offer concrete responses to one of the main challenges of tertiary
education: its relevance to individuals and societies.
Source: Written by Jamil Salmi for this report, 2010.
36
4.5. BETTER TARGETING OF FINANCIAL AID AND IMPROVEMENT OF BASIC

EDUCATION
Ensuring equity of access is central to providing opportunity for increased earning and intergenerational
mobility. Data indicate that lower income and rural students are significantly under-represented in
tertiary education. The poor do not have equal opportunity of access because they have much lower
basic education completion rates and because they often cannot afford to pay high tuition fees. Table
16 shows that rural students have much lower school completion rates than urban students at all levels
of education, be that primary, lower secondary, upper secondary, and tertiary. Even if they enter tertiary
education, they have much lower completion rates. This is likely the result of the fact that their financial
burden is proportionally higher relative to their family income than the rich. Rural children, particularly
boys, have lower completion rates at all levels. Likewise, the same pattern holds for the poorest and
the richest quintiles. These data indicate that, in addition to reforming the tertiary education system to
ensure better access, efforts must also be made to ensure school completion for all subgroups in order
to provide equitable access to tertiary education.
Table 16: Spatial and Income Disparities in Educational Completion Rates
(% entering primary that complete each level)
Children aged 8-25
Total
Urban
Rural
Boys
Girls
Poorest
Richest
Primary
93.95
96.74
89.36
91.69
96.13
90.83
96.60
Lower secondary
81.04
87.41
70.00
75.98
85.72
72.93
90.61
Upper Secondary
54.87
60.01
45.73
48.73
60.35
42.59
69.93
Diplomas
41.91
47.20
31.56
38.31
45.49
39.59
51.47
University
9.43
10.38
7.79
10.36
9.20
7.48
12.60
Source: HIES 2006, as quoted in Mongolia: Consolidating the Gains, Managing the Boom, and Moving to Better Service
Delivery, World Bank, 2008.
Notes: Figures are Kaplan Meier estimates, which account for censoring (i.e. individuals still attending school at the time
of the survey only contribute to the estimation sample up to last level currently attended). Survival rates indicate the
cumulative probability of making the transition to each level.
To improve equity, the STF should also be reformed. Since the overall rate of loan repayment to the STF
is only 2 percent, and the government occasionally forgives many loans, more resources will need to
be mobilized, perhaps even from the private sector, to sustain and scale-up the STF over the long run.
One proposal may be to enlist the efforts of private commercial banks. These banks could provide more
flexibility in terms of accessibility and amounts of loan defaults, though the government may still wish to
guarantee the loans and subsidize the interest. This may be one way for the government to save a large
amount of resources that can then be reallocated into existing or new need-based financial assistance
programs.
37
Furthermore, because the STF does not track the extent to which its programs reach its targeted groups,
it is clear that a stronger system of monitoring and evaluation is needed. Such a system would help
better understand whether or not the program is reaching intended beneficiaries and what overall
impact the program is having on student achievement. Developing a more thorough examination
of financial eligibility grounded in an appropriate methodology for STF assistance could improve the
equitable distribution of financial aid. Such a methodology should contain not only a reliable way to
determine family income, but also a method to reasonably estimate the expected family contribution
towards college costs. Any measurement of family income must consider not only cash income, but also
the substantial size of income from subsidiary economic activity or livestock (World Bank, 2008).
38
5. TECHNICAL AND VOCATIONAL EDUCATION AND

TRAINING: COMPLEMENTARY TO TERTIARY EDUCATION?
The desirability of developing a diversified and flexible education system that allows for multiple
exists and re-entries across field of studies and between subsectors calls for expanding vocationally
oriented institutions and programs (at secondary and post-secondary levels), community college types
of institutions, teaching colleges and universities, and a very small number of research universities.
This chapter explores the potential for skill development and employment generation as an option for
youths.
5.1. THE STRUCTURE AND OUTCOMES OF MONGOLIAS TVET SYSTEM

TVET is administered under the purview of the Ministry of Education, Culture and Science (MECS) and
the Ministry of Labour and Social Welfare Services (MLSWS). MECS oversees formal long term TVET
(more than two years) while MLSWS oversees the non-formal short term TVET (ranging from two weeks
to 45 days). All schools offering preliminary vocational education recruit students who have completed
9th grade, while intermediate vocational education institutions recruit students who have completed
11th grade. Basic characteristics of the system are presented in Table 17.
Table 17: Basic Outcomes of TVET in Mongolia
Total No. of Students
37,867
of which females
17,844
Total No. of Graduates

2008
8,745
2009
11,408
Total No. of Schools

of which:
70
Public Vocational Schools offering preliminary training
23
of which schools are intermediate level
Private schools offering preliminary training
Public Technical Schools offering preliminary and intermediate training
11
Private Vocational and Technical Higher Education Schools
Source: MECS, 2009.
Under informal short-term TVET, the LSWSO coordinates activities related to employment and provides
accreditation to 1,200 training providers to conduct informal short-term TVET. Of the 1,200 training
39
providers, 150 were also accredited to receive funding from the Employment Promotion Fund to train
unemployed people. The main purpose for these short-term vocational trainings is to help unemployed
people learn a new skill to seek employment.
Because technical skills are generally accorded low status and are given little recognition in Mongolia,
and because academic education is seen, in many cases mistakenly, as a more helpful path toward
lucrative employment, most young people continue to choose academic education rather than
vocational training. This is despite the fact that there are significant emerging opportunities in trade
occupations and technical jobs. About 140,000 Mongolian students are attending university (about 15
percent of Mongolias workforce), and many of these graduates face difficulties in finding jobs because
of the countrys skill mismatch. In 2006, only 7,100 (5.4 percent) of tertiary graduates were from TVET
institutions, of which 48 percent were female.
Shifting larger proportions of students into the TVET system may be one way to address the skills
mismatch and improve labor market outcomes. However, such a policy option would be viable only
if the quality of education and training students receive is of good quality and relevant to market
demands, which can only be achieved through an overhaul of the existing system. With a good quality
TVET system, graduates are more likely to be employed.
However, despite the demand from employers for vocational skills, public investment in TVET is limited.
Facilities and machinery are often outdated and faulty, and private providers are not currently part of a
regulatory and monitoring framework to ensure that training meets standards in terms of competency,
course, credentials, and occupational safety and health.
5.2. CHALLENGES TO THE QUALITY OF MONGOLIAS TVET SYSTEM

Governance. The National Vocational Education and Training Methodology Center (NVETMC) is
responsible for the development of skills standards and curricular materials for both formal and informal
TVET courses, the production of textbooks, the training of TVET teachers and industry practitioners to
develop modular training materials, teachers pedagogical training, and research work on TVET-related
issues, such as labor market studies. The NVETMC is located in MECS and has five full-time staff; there
are another six regional centers manned by two staff each. There is also an accreditation agency known
as the National Council for Education Accreditation (MNCEA)8 whose role is to accredit the quality of
TVET programs. However, it has accredited less than 10 percent of all TVET programs.
Governance could be described as fragmented. Different agencies responsible for different roles in
the TVET system are working in silo without much coordination, interaction and synergy. For example,
the NVETMC has developed 70 skill standards but the National Council for Education Accreditation
has yet to undertake a single accreditation of any of these programs. In addition, dated equipment,
To date, the MNCEA has accredited 11 schools delivering TVET education.
40
insufficient training, and the lack of skill development opportunities for teachers all seem to suggest that
the developed standards and curricula have not been deployed at the school level.
Furthermore, there is currently no structured and coordinated pre-service or in-service teachers pedagogy
or technical skill training. Teachers pedagogy training has been left very much to the initiative of the
TVET schools. For technical skills upgrading, some schools send their teachers periodically for skills
training. However, because of the lack of modern equipment that are in line with the needs of the
employers, it is likely that most teachers would need technical skills training when new equipment and
machines are put in place by schools.
At the policy level, although there is evidence of collaboration with industry, this is still very limited to
students attachments which range from 30 to 45 days. Any attachment beyond the stated duration
is at the discretion of the school directors, and there is little initiative currently by MECS to forge closer
collaboration with the industry or employers.
Ineffective use of resources and outdated equipment. Public spending on TVET is roughly 6 percent
of the total public spending on education. However, about 45 percent of the TVET budget is used for
the purpose of students stipends, and less than one percent is used for the purpose of infrastructure
development and training equipment acquisition, which are critically inadequate.
Most of the infrastructure of TVET schools needs rehabilitation and expansion. Interviews with TVET
school directors revealed that the existing infrastructure of most schools, including practical training
facilities, may not be able to meet the training needs of implementing a demand-led competency-based
TVET curriculum. For most schools, practical training equipment and machines are either outdated,
broken or of insufficient quantity to meet the requirements of practical training. Many schools are still
using Russian-era equipment.
The policy of providing stipends for students attending preliminary vocational education has led to an
increase in enrollment of TVET students and as a result put on additional pressure on existing facilities
and infrastructure. Indeed, while some updated equipment donated by developmental partners have
been helpful, they are most often only in limited quantity and may not be sufficient to meet the needs
of an increased class size.
5.3. OPTIONS TO IMPROVE QUALITY AND RELEVANCE

System Review. One of the key recommendations to improve the quality and relevance of the TVET
subsector would be for the government to take stock of the current system to determine what is
working and identify gaps. An in-depth situational analysis of the TVET system should be conducted on
an immediate basis. The analysis should also provide strategic recommendations to ensure sustainable
reform of the TVET system. A review of the methodology and curriculum materials developed could help
refine teaching methodologies, systems of deployment of materials to schools, the way TVET textbooks
are published, and systems for retaining staff at the NVETMC to ensure institutional memory that would
facilitate the work of the new TVET agency.
41
Governance. The role of the National Vocational Education Training and Methodology Center from
MECS can be absorbed within the new TVET agency to avoid the duplication of activities. The number of
curriculum development specialists should also be expanded, through recruitment and training, taking
into consideration the necessity to revise and develop new curricula according to the needs of the
economy. As the work on curriculum development is very important to the success of the reformed
TVET system, if the organizational structure9 of the proposed new TVET agency has not factored in
the necessity of human resources, then it may make sense not to have the TVET agency absorbing this
function but to develop a framework to forge collaboration instead.
Infrastructure and Training Equipment. Resources must be channeled into the updating of equipment
and instituting practical training workshops. Training equipment must not only meet the requirements of
revised curricula but also meet the standards and specifications used by industry. Documented practical
workshop norms must be established to guide all schools in establishing standard practical training
facilities. Workshop norms should guide the number and type of equipment needed for practical
training and at the same time ensure that the practical workshop follows rules of occupation safety and
health. Since the state may not be able to purchase sufficient practical training equipment and machines
initially, the acquisition of simulated training equipment, which is relatively cheaper, maybe a good
option. In addition, an apprenticeship system could be introduced with willing industry partners where
students could attend schools on a block release or day release basis with the rest of their time spent in
industries performing work under structured guidance from trained industry practitioners.
Curriculum Development and Governance The approach should be one that is demand-led and
competency-based. This is widely used in many countries such as Australia, Singapore (Box6), UK,
Canada, and New Zealand. TVET schools should only implement courses that have clear demand from
employers, and curricula should be guided by clear indications from industries and practitioners on the
skills and knowledge requirements of that particular occupation.
Due to the global financial crisis the new TVET agency structure may have about 20 staff.
42
Box 6: Singapores Institute of Technical Education (ITE) Curriculum Development Model
In recent years a number of countries have introduced competitive funding schemes as an innovative
and flexible financing mechanism to allocate resources to TEIs. Competitive funds can target a variety
of sector issues and are an output-oriented funding mechanism. As such, they can increase costeffectiveness and enhance quality and relevance.
ITE adopts a structured and externally-oriented process in the planning, design and delivery of its key
programs, with extensive external consultation to identify training needs for course planning, followed
by a 5-stage process to design and implement the specific courses identified.
Curriculum Development begins with a training needs analysis. ITE has a system in place for identifying
the training gaps in the economy, which can be addressed by developing appropriate courses for
school leavers and workers. The governments economic policies and initiatives determine the long
term planning of ITE courses. The manpower requirements projected by the Ministry of Manpower
together with relevant government economic agencies such as the Economic Development Board
(EDB) and Info-Communications Development Authority (IDA), are key factors in deciding the types of
programs to be introduced by ITE. This together with regular feedback on demand, the interests of
school leavers, as well as an annual evaluation of performance indicators of the existing courses, will
lead to a determination of annual intake capacities.
Once the courses have been identified and approved, a 5-stage systems approach is adopted to design
and develop the programmes.
The Analysis phase determines the need and demand for training, the skills, knowledge and attitude
required of an occupation, and the skills standard to be attained. In this phase, skilled practitioners are
invited to participate in a focus group exercise to provide information to the curriculum development
specialist.
The Design phase determines the design and structure of the training programme. Entry requirements
and instructional objectives are specified. The assessment scheme and test design are laid down. The
requirements for training facilities and staff training are also identified.
In the Development phase, instructional materials (teaching and learning materials) used by the training
staff and students are developed. The materials include teaching notes, practical job sheets, audiovisual aids and computer-based training packages.
In the Implementation phase, training is implemented and monitored in a pilot course. Formative
evaluation is conducted to identify deficiencies and refine the curriculum, its materials, and the delivery
system.
Finally, in the evaluation phase, the training course is evaluated to determine whether it has achieved
its intended goals. The major considerations evaluated are whether the students have learned what
they are supposed to learn and able to perform their jobs in a way that meets the expectations of their
employers.
Source: The Institute of Technical Education Singapore.
43
In-service and Pre-service Teachers Recruitment, Selection and Training. In terms of teachers recruitment
and selection, the new TVET agency could specify minimum teachers qualifications (See Box 7 on
Denmarks Model). TVET teachers should have the technical skill of one level above what they would be
teaching, have at least three years of relevant work experience, and have attended pedagogy training.
It may not be necessary for all TVET teachers to have a bachelors degree since this type of degree
usually focuses more on knowledge and less on skills. The system of recruitment should allow flexibility
for the recruitment of highly skilled technicians who may not be educated up to bachelor degree level.
Moreover, the teachers in the existing system should attend in-service training on pedagogy and attend
industrial attachments with industry partners during school vacations so that they could acquire industry
knowledge. Newly recruited teachers should attend pre-service training for both pedagogy as well as
technical skills. TVET schools should also be encouraged to invite industry practitioners as part-time
teaching staff.
BOX 7: DENMARKS TVET TEACHERS QUALIFICATION AND TRAINING
In Denmark, teachers in vocational education and training programmes have normally completed
vocational education in the subjects in which they teach and have typically also pursued higher education.
A minimum of 5 years of professional experience is required, but only 2 years of professional experience
for teachers in the general subject areas. The teachers of general subjects normally have a Bachelors or
Masters degree.
Teachers who do not already have pedagogical training must take a pedagogical training course for
vocational college teachers. This training must be completed within the first 2 years of appointment to
a job at the college.
The individual teacher is obliged to keep his or her academic and pedagogical knowledge up to date.
The college is required to draw up a plan for the competence development of the teachers group at
the college.
Source: www.eng.uvm.dk.
Improving the Financing of TVET. A combination of a public and private financing model could be adopted
in Mongolia. Many countries such as Malaysia, Singapore, South Korea, and Tanzania imposed a levy
on employers as part of their contributions to develop a skilled workforce. Public-private partnerships or
private investment in TVET should be encouraged so that the private sector invests in infrastructure and
training facilities instead of the government.
Furthermore, the funding of stipends for students could be reviewed so that more funding could be
channeled to students attending courses that have strong demand from employers and fewer to courses
that show signs of saturation in the labor market.
The Establishment of a National Qualifications Framework (NQF).In the immediate future, a centralized
examination, assessment and qualification system must be established as a matter of priority. This
system will ensure consistency in the output of the TVET system. It is important that in designing a
44
centralized examination, assessment and qualification system, practitioners from industries are involved.
A well-designed curriculum development model that is demand-led and competency-based and an
examination, assessment and qualification system which involves industries participation will build a
solid foundation of quality assurance. It will also ensure consistent quality of the TVET outputs. In the
long run, a NQF framework similar to those adopted by countries such as Australia (Box8), New Zealand,
UK, and South Africa could be implemented.
Data Monitoring. A coherent and coordinated labor market information system must be established
to provide current information on labor market requirements and serve as a form of monitoring and
evaluation (M&E) on the output of the reformed TVET system. A good M&E system would ensure
that there is quality control on the output of the TVET system and provide checks and balances to
employers of TVET graduates. The labor market information system must enforce formal tracer studies
on an annual basis on all TVET schools. Data from tracer studies as well as information collected from
employers censuses and other labor market surveys will provide more complete information for the new
TVET agency to make informed policy formulations and strategic plans for the system.
In sum, with a strong demand for TVET, it makes sense to channel some students into this subsector.
However, this strategy will only be successful if there are sufficient investments into the supply of the
system. These investments require additional resources and are urgently needed to increase the capacity
for governing the subsector, improve the quality of TVET delivery, forge greater linkages with industry,
and provide placement assistance to graduates. While the challenges of the lack of infrastructure and
equipment, poor quality assurance mechanisms, and the lack of opportunity for faculty skill upgrading
are similar to those faced by the tertiary subsector, the challenges faced by the TVET subsector may
indeed be tougher. The Government needs to make vocational education an attractive alternative to
academic higher education and work to remove the stigma around TVET as a second-track option. After
all, creating new job openings in sectors with higher productivity and higher wages and earnings will
not have the desired impact on living standards unless more Mongolian women and men have the skills
that employers demand.
BOX 8: THE AUSTRALIAN QUALIFICATION FRAMEWORK (AQF)
The AQF is a unified system of national qualifications in senior secondary schools, vocational education
and training institutions and institutions of higher learning. It has 14 levels of qualifications as
follows:
- Senior Secondary Certificate of Education;
- Certificate 1;
- Certificate 2;
- Certificate 3;
- Certificate 4;
- Diploma, Advance Diploma;
- Associate Degree;
- Bachelor Degree;
- Vocational Graduate Certificate;
- Vocational Graduate Diploma;
- Graduate Certificate;
- Graduate Diploma;
- Masters Degree;
- Doctorate Degree.
45
The AQF was introduced on 1 Jan 1995 on a nation-wide basis and was phased in over a period of five
years, achieving full implementation by year 2000. It is governed by a council, led by an independent
Chair and Council members, represented by the three education sectors, governments and industry.
The objectives of the AQF are to:
- Provide nationally consistent recognition of outcomes achieved in post-compulsory education;
- Help with developing flexible pathways which assist people to move easily between education
and training sectors and between those sectors and the labour market by providing the basis for
recognition of prior learning (RPL), including credit transfer and work and life experience;
- Integrate and streamline the requirements of participating providers, employers and employees,
individuals and interested organizations;
- Offer flexibility to suit the diversity of purposes of education and training;
- Encourage individuals to progress through the levels of education and training by improving access
to qualifications, clearly defining avenues for achievement, and generally contributing to lifelong
learning;
- Encourage the provision of more and higher quality vocational education and training through
qualifications that normally meet workplace requirements and vocational needs, thus contributing
to national economic performance; and
-
Promote national and international recognition of qualifications offered in Australia.Source:

Australian
Qualification Website, www.aqf.edu.au.
46
6. CONCLUSIONS
Increasing investment in all subsectors of education from primary and secondary to post-basic is
imperative if Mongolia is to reduce its poverty, increase its employment, and make its labor force more
responsive to the needs of employers.
With regards to tertiary education, there is much to do. To summarize, as a result of rapid expansion,
an inequitable financing mechanism, and insufficient quality assurance, Mongolias tertiary education
suffers from low external efficiency, inequitable access, and poor quality. There is an urgent need to: (i)
improve the coherence, governance, and responsiveness of the countrys tertiary education system to
the changing demands of the market economy; (ii) improve efficiency and resource utilization; and (iii)
improve the quality of curricula, teaching, and learning in the subsector.
To improve these areas requires making strategic choices and investments in tertiary education. The
following steps should be considered:
Summary of Recommendations
Improve the quality of basic education to ensure the poor complete schooling so as to enhance
the probability of their enrollment in higher education;
Rationalize TEIs in order to concentrate resources on fewer institutions and programs to help them
reach international standards;
Use competitive block grants to allocate resources (such as equipment and staff training) to the
best programs (as measured by key performance indicators and labor market outcomes) on a triannual basis to allow for predictability of funding and to give time to demonstrate outcomes;
Invigorate the accreditation and quality assurance mechanisms, using international benchmarks,
to facilitate rationalization of public and private institutions and to allow for good quality offshore
programs to compete in Mongolia;
Develop a diversified but integrated tertiary education system so that each institution can play a
key role in regional development and transfers between institutions can be made;
Establish a Tertiary Education Commission comprising representatives from industry, key

professions, and academics from developed countries to set strategic direction, allocate block
grants, and to oversee the role of TEIs in facilitating regional development;
Tighten eligibility criteria and improve the targeting of the State Training Fund to aid low-income
students;
47
Set up a labor market information system to inform the public about the key performance indicators
of each institution and employment statistics by discipline to facilitate school and career choice;
Strengthen links between the supply of education and training and demand for skills in labor
markets, through greater participation by employers and unions in reviewing training courses,
setting occupational standards, offering on-the-job training and developing bridge programs
between school and work, such as through apprenticeships and internships; and
Create a national council on vocational training, skills standards and certification, which involves key
stakeholders who will work together to support the development of a legal framework, financing
mechanisms, methodological centers, vocational standards, pedagogical issues, certification
procedures, teacher training, school management, and training facilities.
It is clear that implementation of most of these recommendations will require additional resources for
the subsector, and planning reform for the subsector needs to begin. Investing in the subsector over the
medium-term will be essential to ensure tertiary educations continuing contribution to competitiveness
and growth.
48
REFERENCES
The Asian Development Bank. 2004. The Mongolian Education and Training Fund: Building a Sustainable
Future. Draft. .
Mikhail, Sam. 2008. Presentation at a Vocational Education Workshop at Peking University, June,
2008.
Ministry of Education, Culture, and Science of Mongolia, Various Data, 2006, 2007, 2008.
Organization for Economic Cooperation and Development, Education at a Glance, 2007.
Raza, Reehana. 2009. Examining Autonomy and Accountability in Public and Private Tertiary Institutions.
World Bank (Draft)
Ridao-Cano, Mongolia: Building Skills for the New Economy, Washington, DC: The World Bank,
2006.
Sakellariou, 2009, Industry and Skill Premia in Asia, Background Paper for the World Banks Regional
Study on Skills, Preliminary Draft.
Salmi, Jamil. 2009. The Challenge of Establishing World Class Universities, Washington, DC: The
World Bank.
World Bank, The. 2001. China: Higher Education, Washington DC: The World Bank
World Bank, The, 2008. Mongolia: Consolidating the Gains, Managing the Boom, and Moving to
Better Service Delivery.
UNDP Consultants Report on Higher Education in Mongolia. 2009 (Draft)
49
ANNEX 1: MONGOLIAS EDUCATIONAL FRAMEWORK
Grade
Years
21
27
20
26
19
25
18
24
17
23
16
22
15
21
14
20
13
19
12
18
11
17
10
16
15
14
13
12
11
10
Doctorate Degree (3 years)
Master Degree (2 years)
Bachelor Degree (2 years)

Bachelor Degree (4-5 years)
Intermediate Vocational Education (1.5 years-3 )
Senior Secondary School (2 years)
Preliminary Vocational Education (2.5

years)
Junior Secondary School (4 years)
Primary School (5 years)
6
5
4
3
2
1
50
Kindergarten
FIGURE 2: MONGOLIAN POPULATION PROJECTIONS, 2010 AND 2020

Mongolia Population Pyramid for 2010
Predicted age and sex distribution for the year 2010:
Mongolia: 2010
MALE
FEMALE
80+
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
200
150
100
50
0
0
50
Population (in thousands)
100
150
200
Source: U.S. Census Bureau, International Data Base.
Mongolia Population Pyramid for 2020

Predicted age and sex distribution for the year 2020:
Mongolia: 2009
MALE
FEMALE
80+
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
200
150
100
50
0
0
50
Population (in thousands)
100
150
200
Source: U.S. Census Bureau, International Data Base.
51
ANNEX 2: YEARS OF SCHOOLING OF THE YOUNGER AND OLDER ADULT POPULATION

Education
Years of schooling
25-34
Male
Female
35-55
Male
Female
1998
2002
2007
Change (%)
(1998-07)
11.52 (n=1,404)
11.13 (n=693)
11.91 (n=711)
11.18 (n=1,982)
11.19 (n=894)
11.18 (n=1,088)
11.17 (n=2,096)
10.56 (n=974)
11.71 (n=1,122)
11.19 (n=3,278)
10.87 (n=1,538)
11.48 (n=1740)
11.06 (n=7,003)
10.40 (n=3,350)
11.66 (n=3,653)
11.11 (n=11,674)
10.84 (n=5,504)
11.36 (n=6,170)
-4.0
-6.6
-2.1
-0.6
-3.1
1.6
ANNEX 3: TERTIARY PREMIA BY YEAR, AGE GROUP, GENDER AND SECTOR OF

EMPLOYMENT
Table A3.1: Wage Premia for different levels of education
Education Premiums
(vs. No Education):
Males
Change (%)
(1998-07)
1998
2002
2007
25-34
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
(dropped)
(dropped)
-0.229
-0.220
-0.152
0.068
-0.011
182
-0.587
-0.580
-0.703
-0.612
-0.459
-0.401
0.023
287
-0.618**
-0.420
0.057
0.111
0.365
0.653**
0.160
1,205
860.3
35-55
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
0.637
1.42**
1.90***
1.43**
1.72***
2.04***
0.100
327
0.006
0.213
0.224
0.325
0.446
0.697
0.098
638
0.264
0.704***
1.09***
1.25***
1.78***
1.80***
0.173
2,192
-50.4
-42.6
-12.6
3.5
-11.8
Based on a Mincerian regression with basic controls.

Note: Percentage changes were not calculated when premiums for both years were statistically insignificant.
52

Education Premiums
(vs. No Education):
Females
Change (%)
(1998-07)
1998
2002
2007
25-34
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
(dropped)
0.616
0.685
0.630
0.880
1.22
0.041
202
(dropped)
(dropped)
0.230
0.397**
0.628***
0.918***
0.124
376
0.565
0.813*
1.48***
1.87***
2.22***
2.31***
0.208
1,344
32.0
116.1
196.8
152.3
89.3
35-55
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
(dropped)
0.357
0.526**
0.628**
0.636***
0.970***
0.093
375
0.899
1.18*
1.38**
1.47**
1.66***
1.87***
0.141
743
-0.072
0.113
0.556*
0.741**
1.20***
1.29***
0.144
2,547
5.7
18.0
88.7
33.0


Education Premiums
(vs. No Education):
Public
25-34
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
1998
2002
2007
Change (%)
(1998-07)
(dropped)
(dropped)
0.044
-0.192
0.217
0.444*
0.019
267
(dropped)
-0.465
-0.472
-0.332
-0.175
0.115
0.111
401
-0.661
-0.417
-0.405
-0.177
-0.008
0.021
0.060
976
53
35-55
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
-0.132
0.438
0.869
0.778
0.785
1.08
0.108
500
0.951*
1.13**
1.30**
1.23**
1.50***
1.72***
0.163
964
0.358
0.465*
0.819***
0.970***
1.38***
1.33***
0.112
2,404
6.2
-5.7
24.7
75.8
23.2


Education Premiums
(vs. No Education):
Private
25-34
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
35-55
Primary
Lower Secondary
Tertiary Diploma
University
R-sq adjusted
N
Change (%)
(1998-07)
1998
2002
2007
(dropped)
0.596
0.208
0.471
0.256
0.939
0.053
117
(dropped)
0.041
0.007
0.099
0.418
0.537
0.080
237
-0.378
-0.239
0.377
0.507*
0.901***
1.21***
0.235
1,572
7.6
252.0
28.9
2.58***
2.61***
2.62***
2.38**
2.81***
3.21***
0.139
202
-0.141
0.217
0.187
0.477
0.567
0.862
0.096
369
0.000
0.361*
0.755***
0.888***
1.42***
1.63***
0.185
2,334
-86.2
-71.2
-62.7
-49.5
-49.2

54
ANNEX 4: AGGREGATE INSTITUTIONAL AND ENROLLMENT DATA

Figure A4.1: The Number of Private and Public TEIs in Mongolia
There Are Far More Private HEIs in Mongolia than Public

HEIs
160
140
120
100
Public
80
Private
60
40
20
0
2001
2002
2003
2004
2005
Figure A4.2.: Tertiary Enrolments in Public and Private TEIs
Most Tertiary Students Are Enrolled in Public HEIs
90,000
80,000
70,000
60,000
50,000
Public HEI students
40,000
Private HEI students
30,000
20,000
10,000
0
2001
2002
2003
2004
2005
55
Figure A4.3: Average Annual Percent Increases in Tertiary Enrolments, by Institution Type
...But Students Are Entering Private HEIs at an Increasing Rate

25.00%
20.00%
Annual Rate of
Change ofStudents
in Public HEIs
15.00%
10.00%
Annual Rate of
Change ofStudents
in Private HEIs
5.00%
0.00%
2001
2002
2003
2004
2005
Figure A4.4: The Proportion of Accredited Institutions in Mongolia
The Proportion of Accredited HEIs Is Rising

200
150
Total HEIs
100
No. of Accredited
HEIs
50
0
2001
2002
2003
2004
2005
2006
56
Figure A4.5: The Proportion of Students Studying at an Accredited TEI
% of Students Attending an Accredited HEI

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2001
2002
2003
2004
2005
2006
Figure A4.6: School Enrollment by Age and Gender, 1998 and 2007
Enrollment by Age and Gender, 1998 and 2007

120
100
80
2007, Male
2007, Female
60
1998, Male
40
1998, Female
20
0
6
9 10 11 12 13 14 15 16 17 18 19 20 21 22
57
Figure A4.7: School Enrollment by Age and Rural/Urban, 1998 and 2007
Enrollment by Age, Rural/Urban, 1998 and 2007

120
100
80
Urban, 1998
Rural, 1998
60
Urban, 2007
40
Rural, 2007
20
0
6
9 10 11 12 13 14 15 16 17 18 19 20 21 22
58
59
84,041
39,405
123,446
Total Private Students
Total Students
25
Private
Total Public Students
1,765
Public
511
Private
of which:
4,573
Public
of which:
1,790
5,626
5,084
No. of Enrolled Students

for Masters Degree

for Doctoral Degree
44,887
38,431
Private
137,539
45,784
91,755
23
1,957
1,980
653
4,973
80,275
72,377
Public
125,162
221
of which:
438
Private
4,550
110,808
5,326
Public
of which:
4,771
2005-2006

for Bachelors Degree
5,764
2004-2005

for Diploma
Total all University and

College
142,030
48,552
93,478
32
2,067
2,099
900
5,386
6,286
47,537
81,915
129,452
83
4,110
4,193
2006-2007
149,915
50,878
99,037
32
2,078
2,110
1,046
6,107
7,153
49,760
87,315
137,075
40
3,537
3,577
2007-2008
100.0%
31.9%
68.1%
0.0%
1.4%
1.5%
0.4%
3.7%
4.1%
31.1%
58.6%
89.8%
0.4%
4.3%
4.7%
2004-2005
100.0%
33.3%
66.7%
0.0%
1.4%
1.4%
0.5%
3.6%
4.1%
32.6%
58.4%
91.0%
0.2%
3.3%
3.5%
2005-2006
100.0%
34.2%
65.8%
0.0%
1.5%
1.5%
0.6%
3.8%
4.4%
33.5%
57.7%
91.1%
0.1%
2.9%
3.0%
2006-2007
(As % of Total Enrolled Students)
ANNEX 5: ENROLLMENT DATA, BY DEGREE LEVEL AND TYPE OF INSTITUTION
100.0%
33.9%
66.1%
0.0%
1.4%
1.4%
0.7%
4.1%
4.8%
33.2%
58.2%
91.4%
0.0%
2.4%
2.4%
2007-2008
60
12,126
12,126
15,926
3,235
12,691
47,290
10,212
1,766
28,117
7,195
8,262
1,005
2,578
1,511
3,168
20,117
9,902
Teacher, pedagogy
Humanities (total)
Art
Humanitarian science
Social Sciences (total)
Social and economics

science
Information and
journalism
Business and
management
Law and judiciary
Natural and Physical

Sciences (total)
Life sciences
Materialism
Math and statistics
Computer science
Engineering and
Technology (total)
Engineering technology
2004-2005
Education (total)
Total Enrollment (All

Levels)
10,984
22,478
3,693
1,569
2,582
1,176
9,020
7,985
32,438
1,868
12,110
54,401
13,066
3,204
16,270
12,803
12,803
2005-2006
11,124
22,589
4,385
1,031
3,161
916
9,493
7,833
34,538
1,888
12,303
56,562
10,899
2,832
13,731
15,094
15,094
2006-2007
11,611
24,416
4,946
921
3,177
974
10,018
7,856
34,892
1,893
13,164
57,805
9,950
2,919
12,869
18,249
18,249
2007-2008
8.0%
16.2%
2.6%
1.2%
2.1%
0.8%
6.7%
5.8%
22.7%
1.4%
8.2%
38.2%
10.2%
2.6%
12.9%
9.8%
9.8%
2004-2005
8.0%
16.3%
2.7%
1.1%
1.9%
0.9%
6.5%
5.8%
23.5%
1.4%
8.8%
39.4%
9.5%
2.3%
11.8%
9.3%
9.3%
2005-2006
7.8%
15.9%
3.1%
0.7%
2.2%
0.6%
6.7%
5.5%
24.3%
1.3%
8.6%
39.7%
7.7%
2.0%
9.6%
10.6%
10.6%
2006-2007
ANNEX 6: ENROLLMENT BY SUBJECT AND DEGREE LEVEL
7.7%
16.2%
3.3%
0.6%
2.1%
0.6%
6.7%
5.2%
23.2%
1.3%
8.8%
38.5%
6.6%
1.9%
8.6%
12.1%
12.1%
2007-2008
61
3,854
3,106
748
9,585
8,651
934
6,214
1,623
571
1,887
2,133
450
Agriculture (total)
Agriculture, forestry, and

fishing
Veterinary
Medical sciences (total)
Medical science
Social welfare and supply
Service sector (total)
Restaurant, hotel, sports

studies
Transportation studies
Environmental
preservation
Police and security
Others
123,824
3,649
Construction and
architecture
Total
6,566
Mechanical Engineering
138,019
1,329
2,195
2,007
651
2,071
6,924
1,324
9,411
10,735
970
3,089
4,059
4,489
7,005
142,411
1,186
2,240
2,051
624
3,071
7,986
1,286
10,307
11,593
860
3,317
4,177
3,544
7,921
150,326
1,294
2,401
2,057
571
3,383
8,412
1,413
11,735
13,148
925
3,190
4,115
4,105
8,700
0.4%
1.7%
1.5%
0.5%
1.3%
5.0%
0.8%
7.0%
7.7%
0.6%
2.5%
3.1%
2.9%
5.3%
1.0%
1.6%
1.5%
0.5%
1.5%
5.0%
1.0%
6.8%
7.8%
0.7%
2.2%
2.9%
3.3%
5.1%
0.8%
1.6%
1.4%
0.4%
2.2%
5.6%
0.9%
7.2%
8.1%
0.6%
2.3%
2.9%
2.5%
5.6%
0.9%
1.6%
1.4%
0.4%
2.3%
5.6%
0.9%
7.8%
8.7%
0.6%
2.1%
2.7%
2.7%
5.8%
62
2004-2005
11,167
11,167
14,517
2,850
11,667
43,323
9,222
1,708
25,635
6,758
7,589
860
2,308
1,430
2,991
18,505
9,276
6,103
Total Enrollment
(Bachelors Level)
Education (total)
Teacher, pedagogy
Humanities (total)
Art

science
Information and
journalism
Business and
management
Law and judiciary

Sciences (total)
Life sciences
Materialism
Math and statistics
Computer science
Engineering and
Technology (total)
6,560
10,054
20,415
3,561
1,516
2,234
968
8,279
7,460
30,361
1,775
11,518
51,114
12,089
2,971
15,060
11,902
11,902
2005-2006
7,497
10,288
21,052
4,284
969
2,763
739
8,755
7,171
32,083
1,813
11,791
52,858
10,148
2,681
12,829
14,227
14,227
2006-2007
8,254
10,983
23,259
4,870
853
2,745
773
9,241
7,277
32,091
1,809
12,492
53,669
9,184
2,733
11,917
17,314
17,314
2007-2008
5.5%
8.3%
16.6%
2.7%
1.3%
2.1%
0.8%
6.8%
6.1%
23.1%
1.5%
8.3%
39.0%
10.5%
2.6%
13.1%
10.0%
10.0%
2004-2005
5.2%
8.0%
16.2%
2.8%
1.2%
1.8%
0.8%
6.6%
5.9%
24.2%
1.4%
9.2%
40.7%
9.6%
2.4%
12.0%
9.5%
9.5%
2005-2006
5.8%
7.9%
16.2%
3.3%
0.7%
2.1%
0.6%
6.7%
5.5%
24.7%
1.4%
9.1%
40.7%
7.8%
2.1%
9.9%
11.0%
11.0%
2006-2007
(As % of Total Enrolled Bachelors Students)
6.0%
8.0%
16.9%
3.5%
0.6%
2.0%
0.6%
6.7%
5.3%
23.3%
1.3%
9.1%
39.0%
6.7%
2.0%
8.7%
12.6%
12.6%
2007-2008
63
3,126
3,392
2,781
611
7,193
6,334
859
5,078
1,623
216
1,840
1,399
422
111,186
Construction and
architecture
Agriculture (total)
Agriculture, forestry, and

fishing
Veterinary
Medical science
Social welfare and

supply
Restaurant, hotel,
sports studies
Environmental
preservation
Police and security
Others
Total
125,642
1,209
1,944
1,937
305
2,065
6,251
1,230
6,614
7,844
787
2,781
3,568
3,801
129,833
882
1,930
1,911
276
3,060
7,177
1,221
7,287
8,508
637
2,908
3,545
3,267
137,486
1,046
2,187
1,903
568
3,383
8,041
1,333
8,252
9,585
659
2,755
3,414
4,022
0.4%
1.3%
1.7%
0.2%
1.5%
4.6%
0.8%
5.7%
6.5%
0.5%
2.5%
3.1%
2.8%
1.0%
1.5%
1.5%
0.2%
1.6%
5.0%
1.0%
5.3%
6.2%
0.6%
2.2%
2.8%
3.0%
0.7%
1.5%
1.5%
0.2%
2.4%
5.5%
0.9%
5.6%
6.6%
0.5%
2.2%
2.7%
2.5%
0.8%
1.6%
1.4%
0.4%
2.5%
5.8%
1.0%
6.0%
7.0%
0.5%
2.0%
2.5%
2.9%
64
146
39
65
553
258
190
Materialism
Math and statistics
Computer science
Engineering and
Technology (total)
32
Information and
journalism
75
653

science
Life sciences
2,192
325
485

Sciences (total)
208
Art
360
693
Humanities (total)
Law and judiciary
578
Teacher, pedagogy
1,147
578
Education (total)
Business and
management
2004-2005
Total Enrollment
(Masters Level)
202
343
661
53
27
196
124
400
443
1,612
48
407
2,510
492
101
593
507
507
2005-2006
217
327
634
54
34
250
110
448
544
1,936
32
300
2,812
436
82
518
572
572
2006-2007
214
371
628
50
42
293
128
513
473
2,297
24
440
3,234
547
91
638
663
663
2007-2008
3.7%
5.1%
10.9%
1.3%
0.8%
2.9%
1.5%
6.4%
7.1%
22.6%
0.6%
12.8%
43.1%
9.5%
4.1%
13.6%
11.4%
11.4%
2004-2005
3.6%
6.1%
11.7%
0.9%
0.5%
3.5%
2.2%
7.1%
7.9%
28.7%
0.9%
7.2%
44.6%
8.7%
1.8%
10.5%
9.0%
9.0%
2005-2006
3.5%
5.2%
10.1%
0.9%
0.5%
4.0%
1.7%
7.1%
8.7%
30.8%
0.5%
4.8%
44.7%
6.9%
1.3%
8.2%
9.1%
9.1%
2006-2007
3.0%
5.2%
8.8%
0.7%
0.6%
4.1%
1.8%
7.2%
6.6%
32.1%
0.3%
6.2%
45.2%
7.6%
1.3%
8.9%
9.3%
9.3%
2007-2008
(As % of Total Enrolled Masters Students)
65
28
5,084
Others
Total
5,626
120
63
32
127
Police and security
74
49
57
40
Social welfare and

supply
379
42
302
Medical science
428
Environmental
preservation
342
64
53
Veterinary
216
246
Agriculture, forestry,
and fishing
280
299
Agriculture (total)
116
Restaurant, hotel,
sports studies
105
Construction and
architecture
6,286
288
67
106
174
54
416
470
85
285
370
90
7,153
248
68
129
200
68
556
624
108
297
405
43
0.6%
0.6%
0.8%
0.0%
0.0%
1.5%
0.8%
5.9%
6.7%
1.0%
4.8%
5.9%
2.1%
2.1%
1.1%
1.0%
0.0%
0.1%
2.3%
0.9%
6.7%
7.6%
1.1%
3.8%
5.0%
2.1%
4.6%
1.1%
1.7%
0.0%
0.0%
2.8%
0.9%
6.6%
7.5%
1.4%
4.5%
5.9%
1.4%
3.5%
1.0%
1.8%
0.0%
0.0%
2.8%
1.0%
7.8%
8.7%
1.5%
4.2%
5.7%
0.6%
66
70
124
42
40
327
105
165
Life sciences
Materialism
Math and statistics
Computer science
Engineering and
Technology (total)
127
225
437
21
26
139
84
270
82
276
185

Sciences (total)
230

science
485
77
460
240
Law and judiciary
226
47
202
91
Art
287
153
317
Humanities (total)
159
Business and
management
139
Teacher, pedagogy
159
16
139
Education (total)
2005-2006
Information and
journalism
2004-2005
Total Enrollment
(Doctoral Level)
148
256
455
16
28
148
67
259
118
218
16
212
564
230
44
274
150
150
2006-2007
186
213
439
11
26
139
73
249
106
288
15
228
637
219
50
269
138
138
2007-2008
9.2%
5.9%
18.3%
2.2%
2.3%
6.9%
3.9%
15.4%
4.3%
8.5%
0.0%
12.8%
25.7%
12.6%
5.1%
17.7%
7.8%
7.8%
2004-2005
6.4%
11.4%
22.1%
1.1%
1.3%
7.0%
4.2%
13.6%
4.1%
10.2%
0.8%
9.3%
24.5%
12.1%
2.4%
14.5%
8.0%
8.0%
2005-2006
7.1%
12.2%
21.7%
0.8%
1.3%
7.1%
3.2%
12.3%
5.6%
10.4%
0.8%
10.1%
26.9%
11.0%
2.1%
13.1%
7.1%
7.1%
2006-2007
8.8%
10.1%
20.8%
0.5%
1.2%
6.6%
3.5%
11.8%
5.0%
13.6%
0.7%
10.8%
30.2%
10.4%
2.4%
12.7%
6.5%
6.5%
2007-2008
(As % of Total Enrolled Doctoral Students)
67
21
1,790
Environmental
preservation
Police and security
Others
Total
1,980
32
11
183
Restaurant, hotel,
sports studies
148
Medical science
193
43
148
28
26
18
Veterinary
78
79
Agriculture, forestry,
and fishing
106
10
97
Agriculture (total)
85
Social welfare and

supply
57
Construction and
architecture
2,099
16
41
34
23
98
11
147
158
37
88
125
51
2,110
48
25
73
12
173
185
41
79
120
40
0.0%
1.2%
0.3%
0.0%
0.0%
1.5%
0.0%
8.3%
8.3%
1.0%
4.4%
5.4%
3.2%
0.0%
1.6%
0.6%
0.0%
0.0%
2.2%
0.5%
9.2%
9.7%
1.4%
3.9%
5.4%
4.3%
0.8%
2.0%
1.6%
1.1%
0.0%
4.7%
0.5%
7.0%
7.5%
1.8%
4.2%
6.0%
2.4%
0.0%
2.3%
1.2%
0.0%
0.0%
3.5%
0.6%
8.2%
8.8%
1.9%
3.7%
5.7%
1.9%
68
9,245
13,951
406
46,226
No. of Students Who Received

State Training Fund Loans

State Training Fund Grants

Other University Funding
No. of Students Who Paid Their

Own Expenses
5,576
2,808
3,226
591
27,000
No. of Students Who Benefit from

State Administration Law




Own Expenses
Private Institutions
12,215
2004-2005

Public Institutions
All Levels - Bachelors, Masters,

and Doctoral
32,157
725
3,786
2,760
6,084
46,226
437
14,213
8,643
12,129
2005-2006
32,015
719
3,754
3,186
6,088
57,982
538
13,662
7,835
12,377
2006-2007
34,210
719
3,481
3,244
5,688
49,541
241
10,855
6,866
11,418
2007-2008
21.8%
0.5%
2.6%
2.3%
4.5%
37.3%
0.3%
11.3%
7.5%
9.9%
2004-2005
23.3%
0.5%
2.7%
2.0%
4.4%
33.5%
0.3%
10.3%
6.3%
8.8%
2005-2006
22.5%
0.5%
2.6%
2.2%
4.3%
40.7%
0.4%
9.6%
5.5%
8.7%
2006-2007
ANNEX 7: STUDENTS SUPPORTED BY FINANCIAL ASSISTANCE,

BY DEGREE LEVEL AND INSTITUTIONAL TYPE
22.8%
0.5%
2.3%
2.2%
3.8%
33.0%
0.2%
7.2%
4.6%
7.6%
2007-2008
69
17,177
997
73,226
123,824



Own Expenses
Total Enrolled Students
136
0
2
1,581



Own Expenses
31


Public Institutions
2004-2005
12,053

Doctoral Level
17,791

Total (Public and Private

Institutions)
1,781
27
110
22
2005-2006
138,019
78,383
1,162
17,999
11,403
18,213
1,939
48
75
2006-2007
142,411
89,997
1,257
17,416
11,021
18,465
1,823
46
67
2007-2008
150,326
83,751
960
14,336
10,110
17,106
56.8%
0.8%
13.0%
8.3%
13.2%
63.2%
0.9%
12.2%
7.7%
13.0%
88.3%
0.1%
7.6%
1.7%
89.9%
1.4%
5.6%
1.1%
2005-2006
92.4%
2.3%
3.6%
0.0%
2006-2007
86.4%
2.2%
3.2%
0.0%
2007-2008
55.7%
0.6%
9.5%
6.7%
11.4%
(As % of Total Enrolled Doctoral Students)

2004-2005
59.1%
0.8%
13.9%
9.7%
14.4%
70
0
0
1
24




Own Expenses
31
136
0
3
1,605
1,790





Own Expenses
Total Enrolled Doctoral Students

Institutions)

1,980
1,804
28
110
22
23
2,099
1,968
49
75
29
2,110
1,854
47
67
31
89.7%
0.2%
0.0%
7.6%
1.7%
1.3%
0.1%
0.0%
0.0%
0.0%
91.1%
1.4%
0.0%
5.6%
1.1%
1.2%
0.1%
0.0%
0.0%
0.0%
93.8%
2.3%
0.0%
3.6%
0.0%
1.4%
0.0%
0.0%
0.0%
0.0%
87.9%
2.2%
0.0%
3.2%
0.0%
1.5%
0.0%
0.0%
0.0%
0.0%
71
0
54
4,204



Own Expenses
0
21
428


Own Expenses
13



196
2004-2005


Public Institutions
Masters Level
635
4,622
46
20
161
2005-2006
849
41
5,024
59
30
142
33
2006-2007
1,005
36
5,646
73
36
125
39
2007-2008
8.4%
0.4%
0.0%
0.3%
0.0%
82.7%
1.1%
0.0%
3.9%
0.0%
2004-2005
11.3%
0.1%
0.0%
0.0%
0.0%
82.2%
0.8%
0.4%
2.9%
0.0%
2005-2006
13.5%
0.7%
0.0%
0.0%
0.0%
79.9%
0.9%
0.5%
2.3%
0.5%
2006-2007
14.1%
0.5%
0.0%
0.0%
0.0%
78.9%
1.0%
0.5%
1.7%
0.5%
2007-2008
(As % of Total Enrolled Masters Students)
72
75
4,632
5,084


Own Expenses
Total Enrolled Masters Students
12,184
8,913
13,951
350
40,441





Own Expenses
Public Institutions
2004-2005

Bachelors Level
209



Institutions)
39,823
364
14,193
8,372
12,107
2005-2006
5,626
5,257
53
20
163
51,019
431
13,632
7,618
12,344
2006-2007
6,286
5,873
100
30
142
36
42,072
122
10,819
6,674
11,379
2007-2008
7,153
6,651
109
36
125
41
93.4%
0.9%
0.4%
2.9%
0.0%
93.4%
1.6%
0.5%
2.3%
0.6%
93.0%
1.5%
0.5%
1.7%
0.6%
36.5%
0.3%
12.6%
8.0%
11.0%
2004-2005
31.8%
0.3%
11.3%
6.7%
9.7%
2005-2006
39.4%
0.3%
10.5%
5.9%
9.5%
2006-2007
30.7%
0.1%
7.9%
4.9%
8.3%
2007-2008
(As % of Total Enrolled Bachelors Students)
91.1%
1.5%
0.0%
4.1%
0.0%
73
2,795
3,226
569
26,548




Own Expenses
66,989
110,808

Own Expenses
Total Enrolled Bachelors Students
17,177

919
11,708


17,760


Institutions)
5,576

125,162
71,322
1,081
17,979
11,130
18,191
31,499
717
3,786
2,758
6,084
129,452
82,156
1,108
17,386
10,804
18,429
31,137
677
3,754
3,186
6,085
137,075
75,246
804
14,300
9,918
17,065
33,174
682
3,481
3,244
5,686
60.5%
0.8%
15.5%
10.6%
16.0%
24.0%
0.5%
2.9%
2.5%
5.0%
57.0%
0.9%
14.4%
8.9%
14.5%
25.2%
0.6%
3.0%
2.2%
4.9%
63.5%
0.9%
13.4%
8.3%
14.2%
24.1%
0.5%
2.9%
2.5%
4.7%
54.9%
0.6%
10.4%
7.2%
12.4%
24.2%
0.5%
2.5%
2.4%
4.1%
74
476
8
No. of Faculty with Bachelors

Degree
No. of Faculty with Diploma
431
10

Degree
1259
4125
907
18
No. of Faculty with PhD Degree
No. of Faculty with Masters

Degree

Degree
2004-2005
1355

Degree
Total
326
2004-2005
2770

Degree
933
2004-2005
Public Institutions
18
907
4125
1259
2005-2006
10
431
1355
326
2005-2006
476
2770
933
2005-2006
16
996
4308
1458
2006-2007
11
458
1516
331
2006-2007
538
2792
1127
2006-2007
885
4548
1425
2007-2008
389
1602
344
2007-2008
496
2946
1081
2007-2008
0.3%
14.4%
65.4%
20.0%
2004-2005
0.2%
6.8%
21.5%
5.2%
2004-2005
0.1%
7.5%
43.9%
14.8%
2004-2005
0.3%
14.4%
65.4%
20.0%
2005-2006
0.2%
6.8%
21.5%
5.2%
2005-2006
0.1%
7.5%
43.9%
14.8%
2005-2006
0.2%
14.7%
63.6%
21.5%
2006-2007
0.2%
6.8%
22.4%
4.9%
2006-2007
0.1%
7.9%
41.2%
16.6%
2006-2007
(As % of Total Number of Teachers)
ANNEX 8: FACULTY QUALIFICATIONS
0.1%
12.9%
66.3%
20.8%
2007-2008
0.1%
5.7%
23.3%
5.0%
2007-2008
0.0%
7.2%
42.9%
15.8%
2007-2008
ANNEX 9: RECENT RESEARCH EXCELLENCE INITIATIVES WORLDWIDE
Country/
region
Name of
initiative
Africa
NEPAD / Blair
Commission
for Africa
(proposed)a
Number of target institutions

and eligibility criteria
Resources
allocated
Investment
horizon
Launched in 2006
1) Revitalize Africas institutions

of higher education
2) Develop centers of excellence
in science and technology,
including African institutes of
technology
1) US$500
million a year,
over 10 years
2) Up to US$3
billion over 10
years
Canada
Canada Networks
of Centers of
Excellenceb
23 currently funded Networks

of Centers of Excellence
16 previously funded Networks
C$77.4 million
per year since
1999
C$47.3 million a
year in 199799
C$437 million in
total in 198898
Operating since
1988;
permanent
program since
1997
Canada
Canada Global
Excellence
Research Chairsc
Four priorities in the Federal

Science and Technology
Strategy: the environment,
natural resources and energy,
health, and information and
communication technologies
C$21 million
200912
Chile
Chile Millennium
Science Initiatived
Groups of researchers
3 science
institutes: US$1
million a year for
10 years;
512 science
nuclei:
US$250,000 a
year;
US$25 million in
total in 200004
Every 5 years for

nuclei and every
10 years for
institutes
China
China 211
Projecte
107 higher-education
institutions
Y 36.82 billion
during 1995
2005
Launched in 1996:
19962000 (1st
round)
200106 (2nd
round)
200711 (3rd
round)
75
Country/
region
Name of
initiative

Resources
allocated
Investment
horizon
China
China 985
Projectf
39 research universities
Y 27.07 billion
(1st round)
Launched in 1999:
19992001
(1st round)
200407
(2nd round)
China
Chinese Academy
of Sciences (CAS)
Institutesg
Mathematics and physics 15

Chemistry and chemical
engineering 12
Biological sciences 20
Earth sciences 19
Technological sciences 21
Others 2
Y 4.80 billion (1st

round)
19982000 (1st
round)
200105 (2nd
round)
200610
(3rd round)
Denmark
Denmark
(Globalization
Fund)
Funds to be allocated to
research universities on a
competitive basis
US$1.9 billion
between 2007
and 2012
Launched in 2006
Europe
European
Commission,
Framework
Programme 7
(FP7)h
TBD determined by structure

of research proposals (RFPs)
Based on number
of RFPs with
a center of
excellence
structure
200713
Overall FP7
budget is 50.5
billion covering
200713i
France
Opration
Campusj
Develop 10 regional centers of

excellence in higher education
and research. Overall, the
centers will regroup 38
universities and research
organizations, representing
340,000 students and 13,000
researchers.
5 billion
Launched in 2008
Germany
Germany
Excellence
Initiative 2006k
40 graduate schools
30 clusters of excellence
(universities and private sector)
10 top-level research
universities
US$2.3 billion in
total
Five-year funding;
two rounds: 2006
and 2007
76
Country/
region
Name of initiative

Resources
allocated
Investment horizon
Japan
Japan Top-30
Program
(Centers Of
Excellence for
21st-Century
Plan)l
31 higher-education
institutions
US$150 million
/ year (program
total: 37.8 billion
yen)
Five-year funding;
launched in 2002;
3 rounds: 2002,
2003, and 2004
Japan
Japan Global
Centers of
Excellence
Programm
5075 centers funded per

year (5 new fields of study
each year)
50 million500
million yen per
center per year
(~US$400,000
US$4 million)
5 years;
launched in 2007
Republic of
Korea
Brain Korea 21
Programn
Science and technology:

11 universities
Humanities and social
sciences: 11 universities
Leading regional
universities: 38
universities
Professional graduate
schools in 11 universities
US$1.17 billion in
total
7 years;
two rounds in
1999
Republic of
Korea
Korea Science
and Engineering
Foundation
(KOSEF)o
1) Science research centers

(SRCs) / engineering research
centers (ERCs): up to 65
centers
2) Medical science and
engineering research centers
(MRCs): 18 centers
3) National core research
centers (NCRCs): 6 centers
funded in 2006
1) US$64.2 million
/ year
1) up to 9 years
2) up to 9 years
3) up to 7 years
2) US$7 million /
year
All 3 programs
launched in FY
2002 or FY 2003
3) US$10.8 million
/ year
Russian
Federation
Russian
Federations
Federal
Universitiesp
Establish a network of highstatus federal institutions

that are specialized research
universities and lifelong
vocational centers
n.a.
Under
consideration (two
pilot universities
were established in
2007)
Taiwan
(China)
Taiwan
Development
Plan for University
Research
Excellenceq
Selection and financial

support of internationally
leading fields
US$400 million
4 years
77
Country/
region
Name of initiative
Number of target
institutions and eligibility
criteria
Resources
allocated
United
Kingdom
U.K. Funding for

Excellent Unitsr
Universities with the highest

marks after the research
assessment exercise (RAE)
US$8.63 billion
disbursed after
2001 RAE
Investment
horizon
5 years for
research council
funded centerss
Two rounds: 1996
and 2001;
2008 RAE
scheduledt
United States,
Arizona
Science
Foundation
Arizonau
Public-private partnership
to strengthen scientific,
engineering, and medical
research
US$135 million +
US$135 million
(1:1 matching)
Annually since
2006
United States,
California
California
Institutes of
Science and
Innovationv
University-industry
partnerships to address state
problems
US$400 million +
US$800 million
(2:1 matching)
Annually since
2000
United States,
North Dakota
North Dakota
Centers of
Excellencew
Public-private centers
focusing on local needs
US$50 million +
US$100 million
(2:1 matching)
Annually since
2007
United States,
Washington
Washington State
Life Sciences
Discovery Fundx
Bioscience research that

provides economic and
health benefits
US$350 million
10 years since
2005
United States,
Georgia
Georgia Research
Alliancey
Public-private partnership to
recruit eminent scholars to
Georgia universities
US$30 million
Annually since
1990
United States,
Indiana
Indiana 21stCentury Research

and Technology
Fundz
Academic and commercial

sector partnerships
US$26 million
Annually since
1999
United States,
Kentucky
Kentuckys Buck
for Brainsaa
Endowed chairs for top

talent
US$350 million
Since 1997
78
Country/
region
Name of initiative

Resources
allocated
Investment
horizon
United States,
Ohio
Ohios Third
Frontierbb
Establishment of centers of
innovation as joint initiatives
of universities and private
research organizations
US$1.6 billion
10 years since
2003
United States,
Oklahoma
Oklahoma
Center for the
Advancement
of Science and
Technologycc
Nanotechnology research
US$29 million
Annually since
1987
Sources: Salmi, 2009.

Note: US$ = U.S. dollars, C$ = Canadian dollars, Y = Chinese yuan, = euros, n.a. = not available.
a. http://www.eurodad.org/articles/default.aspx?id=595.
b. http://www.nce.gc.ca/.
c. www.budget.gc.ca/2008/speech-discours/speech-discours-eng.asp.
d. http://www.msi-sig.org/msi/current.html.
e. Ministerial Office of 211 Project (2007), Report on 211 Project (19952005). Beijing: Higher Education Press.
f. N. C. Liu and L. Zhou (2007), Building Research University for Achieving the Goal of an Innovative Country. Beijing:
China Renmin University Press.
g.http://www.itps.se/Archive/Documents/Swedish/Publikationer/Rapporter/Arbetsrapporter%20(R)/R2007/R2007_
001%20FoU-finansiarer.pdf . Chinese Academy of Science, http://www.cas.ac.cn/html/books/o6122/e1/04/tongzhi/
tz004.htm; http://baike.baidu.com/view/229786.htm.
h. http://ec.europa.eu/research/era/pdf/centres.pdf.
i. http://cordis.europa.eu/fp7/what_en.html#funding.
j. http://www.france-science.org/Operation-Campus-6-projects-kept?var_recherche=operation%20campus; http://
www.universityworldnews.com/article.php?story=20080613092922742.
k. http://www.dfg.de/en/research_funding/coordinated_programmes/excellence_initiative/.
l. http://www.jsps.go.jp/english/e-21coe/index.html.
m. http://www.jsps.go.jp/english/e-globalcoe/index.html;
http://www.jsps.go.jp/english/e-globalcoe/data/application_guidelines.pdf;
http://www.jsps.go.jp/english/e-globalcoe/data/review_guidelines.pdf.
n. http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN015416.pdf;
http://www.bk21.or.kr/datas/english_ver.htm.
o. http://www.kosef.re.kr/english_new/programs/programs_01_04.html.
p. http://www.universityworldnews.com/article.php?story=20081024094454199.
q. http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN015416.pdf.
r. http://www.hefce.ac.uk/research/funding/.
s. http://www.rcuk.ac.uk/research/resfunding.htm.
79
t. http://www.rae.ac.uk/.
u. http://www.sfaz.org/.
v. http://www.ucop.edu/california-institutes/about/about.htm.
w. http://governor.state.nd.us/media/speeches/040325.html.
x. http://www.lsdfa.org/home.html.
y. http://www.gra.org/homepage.asp.
z. http://www.21fund.org/.
aa. http://www.wku.edu/IA/bucks/index.html.
bb. http://www.odod.ohio.gov/tech/program.htm.
cc. http://www.ocast.state.ok.us/
80

Tertiary Education in Mongolia

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Human Development Sector Unit

Document of the World Bank

REPORT NO. 52925 - MN

Tertiary Education in Mongolia:

Human Development Sector Unit

Document of the World Bank

WEIGHTS AND MEASURES

ACRONYMS AND ABBREVIATIONS

Early Childhood Development and Education

Mongolian State University of Agriculture

Challenges to Post-basic Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. The Demand for Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The Impact of Governance and Financing on Quality and

MONGOLIA HIGH EDUCATION POLICY NOTE

Growth of the Tertiary Education Sector, 1991-2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Tertiary Graduates per 10,000 Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Gross Enrollment Rates by Level, 1991, 1995, 2000 and 2007 . . . . . . . . . . . . . . . . . . . . 3

Wage Premia of Various Levels of Education, 1998 and 2007 . . . . . . . . . . . . . . . . . . . . 8

Wage Premia for Different Levels of Educational Attainment,

Distribution of Wage Employees by Sector, 1998, 2002, and 2007 . . . . . . . . . . . . . . . 10

Public Expenditure on Education, 1991, 2002 and 2007 . . . . . . . . . . . . . . . . . . . . . . . 18

Sources of Funding of Tertiary Education Institutions, 2007 . . . . . . . . . . . . . . . . . . . . . 19

International Comparison of Per Student Spending

State Training Fund Recipients by Program Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

A Cross Country Comparison of Tuition Fees as Percentage

State Training Fund Allocation of Resources, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Proportion of College Costs Covered by Tuition/Financial Aid. . . . . . . . . . . . . . . . . . . . 25

Tripartite System of Tertiary Education in Selected OECD Countries . . . . . . . . . . . . . . . 28

Ranking of the Worlds Top Universities, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Spatial and Income Disparities in Educational Completion Rates. . . . . . . . . . . . . . . . . . 38

Basic Outcomes of TVET in Mongolia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Enrollment Ratio by Age, 1998 and 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Characteristics of World Class Universities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

The Widening of STF Eligibility Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

MONGOLIA HIGH EDUCATION POLICY NOTE

Californias System of Universities and Community Colleges . . . . . . . . . . . . . . . . . . . . 29

Competitive Funding as an Innovative Financing Tool . . . . . . . . . . . . . . . . . . . . . . . . . 32

New Zealands Tertiary Education Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

How Singapore is proposing to deal with the proliferation

Labor Market Observatories in Italy and Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Singapores Institute of Technical Education (ITE) Curriculum Development Model . . . . 43

Denmarks TVET Teachers Qualification and Training . . . . . . . . . . . . . . . . . . . . . . . . . 44

The Australian Qualification Framework (AQF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Mongolias Educational Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Years of Schooling of the Younger and Older Adult Population . . . . . . . . . . . . . . . . . . 52

Tertiary Premia by Year, Age Group, Gender and Sector of Employment . . . . . . . . . . . 53

Aggregate Institutional and Enrollment Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Enrolment Data, by Degree Level and Type of Institution . . . . . . . . . . . . . . . . . . . . . . . 62

Enrolment by Subject and Degree Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Students Supported by Financial Assistance, by Degree Level and Institutional Type

Recent Research Excellence Initiatives Worldwide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

MONGOLIA HIGH EDUCATION POLICY NOTE

MONGOLIA HIGH EDUCATION POLICY NOTE

MONGOLIA HIGH EDUCATION POLICY NOTE

This indebtedness is partly a lack of publicly available information on the quality of

MONGOLIA HIGH EDUCATION POLICY NOTE

MONGOLIA HIGH EDUCATION POLICY NOTE

Summary of Issues and Options

Low Cost and Low

Establish a Tertiary Education Commission comprising