The reduction of early school leaving (ESL) to less than 10% in all EU member states is one of the headline targets of the Europe 2020 agenda linking ‘smart’ with ‘inclusive’ growth. Following the priorities of the European Commission’s Action Plan against ESL, we will first examine how systemic reforms can help prevent ESL; next, in the sphere of remediation, the system-level determinants of participation in non-formal education as a ‘second chance’ are analysed. To do so, this article explores whether and how differences in ESL correlate with characteristics of the educational system and the general environment in the individual EU countries. Both strategies may contribute to preparing young people better for the knowledge economy. However, as we will demonstrate, the quantitative impact of this approach on social inclusion remains rather marginal in the short and medium term. Therefore, we advocate a large-scale campaign of compensatory adult education, which potentially has a much stronger impact on poverty reduction.