On a global level, findings of the assessment revealed that the highest performing school systems are those that allocate educational resources equitably among advantaged and disadvantaged schools and that grant more autonomy over curricula and assessments to individual schools.
Focus on mathematics
While the assessment covers three subjects, there is a particular focus area each time it is conducted, this year being mathematics.
"Now that computer technology is accessible to virtually all and is increasingly capable of carrying out routine processes, jobs that do not require mathematical skills are becoming scarcer," the report said.
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"It is now clear that students' mastery of mathematics must include the capacity to formulate problems mathematically and interpret results," it added.
PISA results showed wide differences between students' mathematics skills, with 245 score points separating the highest (China) and lowest (Peru) averages.
The report also revealed worrying gender differences in students' attitudes towards mathematics.
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"While the average girl underperforms in mathematics compared with the average boy, the gender gap in favor of boys is even wider among the highest-achieving students," the report said.
"Even when girls perform as well as boys in mathematics, they report less perseverance, less motivation to learn mathematics, less belief in their own mathematics skills, and higher levels of anxiety about mathematics," it added.
—By CNBC's Ansuya Harjani; Follow her on Twitter @Ansuya_H