Some 264 million school-age children and young people worldwide were not in education in 2015, the United Nations says.
The agency also warned that moves in many countries to hold schools accountable for results can backfire if they are not carefully designed.
And it said that increasingly widespread policies to give parents more choice as to which school their children attend, including voucher programs, could worsen educational segregation.
After a decline in the early 2000s, out-of-school rates have started to stagnate, UNESCO said in its progress report on the UN's development goals for education.
Worldwide, there was a completion rate of 83 per cent for primary education, falling to 45 per cent for upper secondary schooling, the agency said, quoting household survey data from 128 countries for the 2010-2015 period.
There were 40 countries where less than one-in-four young people had completed secondary education, but only 14 where at least 90 per cent had done so.
UNESCO Director General Irina Bokova called for more government accountability.
The report noted that while 82 per cent of national constitutions mention a right to education, only 55 per cent of countries make that right enforceable in the courts.
"Governments are the primary duty bearers for the right to education, yet this right is not justiciable [capable of being the basis for a court case] in almost half of countries, and the primary course of action for those with a complaint is lost," Bokova wrote.
