Montenegro’s government has announced a proposed minimum-wage reform under its Euro model that would leave a 150-euro monthly difference between jobs requiring secondary and higher education. The gap, equivalent to 1,800 euros a year, has raised questions about whether higher pay for immediate employment could affect young people’s decisions to study.
Prof. Dr Jasmina Ćetković, a full professor at the Faculty of Economics in Podgorica, said wage policy must not weaken incentives to acquire qualifications, develop new skills or advance professionally. She warned that the proposed structure could influence education and career choices over time, with consequences for human-capital development and economic productivity.
The proposal concerns minimum wages for jobs with different education requirements, not the full difference in earnings that workers with those qualifications may receive over their careers. Ćetković’s concern is whether young people will see a clear prospect of adequate long-term returns from additional years spent gaining knowledge.
The cost of continuing education
Raising employees’ living standards is a legitimate and desirable objective, in Ćetković’s assessment. Decent pay should not be reserved for people with higher education, and the contribution of workers with lower qualification levels should not be overlooked. At the same time, she said, the wage structure needs to preserve a reason for young people to pursue further education, new competencies and professional advancement.
For a young person deciding whether to enter work after secondary school, further study means forgoing wages that could be earned immediately. That foregone income is the opportunity cost of education; schooling also brings direct expenses. Education therefore involves an investment of both money and years that could otherwise be spent earning, with the expectation of better employment prospects, advancement and income later in working life.
A starting difference in minimum wages does not measure the entire economic return on higher education. That return also depends on whether graduates find employment, how their earnings rise, the opportunities they have to progress professionally and the length of their careers. A degree alone does not guarantee higher pay, although the expectation that knowledge will be rewarded is an important motivation to keep studying.
Ćetković said the 150-euro difference cannot establish that studying does not pay off. The question, she added, is whether the reform gives young people a clear prospect that the extra years they invest in knowledge will be adequately valued over the long term. That distinction separates the initial minimum-wage gap from the employment and earnings possibilities available after graduation.
Wage policy could shape those expectations before young people enter higher education. If immediate work becomes more financially attractive, the income given up while studying rises. Where the expected benefits of a degree appear insufficient, the incentive to continue education may weaken, according to Ćetković’s economic explanation.
Evidence on wages and enrolment
OECD data for this year cited by Ćetković show that employees with higher education earn an average of 54% more than employees with secondary education. The advantage is 38% among workers aged 25 to 34 and 65% among those aged 45 to 54. The figures describe earnings differences across workers, rather than the proposed gap between Montenegro’s minimum wages.
World Bank research she cited associates each additional year of schooling with approximately 9% higher earnings on average. That relationship does not mean every diploma leads to a higher wage. It does, however, form part of the earnings expectations that can matter when young people weigh the immediate income from work against additional time in education.
International studies suggest that higher minimum wages can influence education choices, but the effects are not uniform. Research in Canada found that a 10% increase in the minimum wage was associated with a 6.2% rise in enrolment in shorter, professionally oriented higher-education programmes. Enrolment in university programmes fell by 6.5% in the same research.
The Canadian findings point to different responses across types of higher education, rather than a single direction of change in enrolment. Shorter professional programmes attracted more entrants while university programmes enrolled fewer. The distinction matters to the proposed reform because a decision to continue studying can also involve a choice between programmes of different lengths and orientations.
A study published last year covering all 50 U.S. states over a ten-year period found lower overall college enrolment and lower enrolment at two-year colleges. It also found higher enrolment at state four-year colleges. Like the Canadian findings, those results show that enrolment trends differed across types of programmes.
The results from Canada and the United States cannot be applied directly to Montenegro, Ćetković cautioned, because their broader economic circumstances and minimum-wage systems differ. She cited them as reasons to examine how the Euro model might affect young people’s decisions, rather than assume a particular outcome for Montenegro. The proposed wage difference alone cannot show whether students would leave education earlier or change the kind of education they pursue.
Regional returns to qualifications
Regional earnings comparisons also show differences between qualification levels. In Croatia, average net wages in jobs requiring higher professional qualifications were 63.6% higher in 2024 than in jobs requiring secondary professional qualifications. In Serbia, workers at the sixth qualification level earned about 41% more than those at the fourth level in September 2025.
OECD figures cited by Ćetković put the average earnings advantage for employees with higher education in Slovenia at 57% over employees with secondary education. The data also show that unemployment among young people with higher education in Slovenia fell from 11% in 2015 to 4% in 2025. In Croatia, the corresponding unemployment rate declined from 15% to 5% over the same years.
Those employment figures add another element to the decision to study: earnings after graduation depend in part on finding a job. They do not, by themselves, measure the return that a young person in Montenegro can expect. Ćetković identified employment opportunities, subsequent wage growth and career progression as factors that the initial minimum-wage difference does not capture.
A World Bank report for the Western Balkans published last year associated each additional year of higher education with average earnings that were 5.3% higher in Serbia, 4.7% higher in Kosovo, 4.4% higher in Bosnia and Herzegovina and 2.3% higher in North Macedonia. The figures show that the measured earnings relationship varies across economies in the region.
The World Bank has also indicated that education pays more in productive activities that create greater economic value, according to Ćetković. On that basis, the long-term value of a qualification depends not only on a diploma or a minimum-wage rule. It also depends on whether employers offer jobs in which acquired knowledge can be applied productively and paid for accordingly.
For Montenegro, the unresolved issue is how the proposed Euro model would interact with those employment opportunities. Ćetković urged the country to preserve clear economic incentives to continue schooling and to create jobs that adequately value acquired knowledge. The potential effect of the proposed minimum-wage structure on young people’s education decisions remains to be analysed.
