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Highlights from Education at a Glance 2008
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branch Paying for education
  branch How efficiently are resources used in education?
  • Even where countries have similar spending levels, their policy option in education may differ greatly. This goes some way towards explaining why there is no simple relationship between spending and student performance.
  • In countries with the lowest salary cost per student at upper secondary level, low salary levels as a proportion of GDP is usually the main driver.

Significance

This indicator examines the relationship between resources invested and outcomes achieved in upper secondary education across OECD countries. With increasing pressure on public budgets, there is -growing interest in ensuring that funding, particularly public funding, for education is used as efficiently and effectively as possible.

Findings

There is a positive relationship between the cumulative amounts spent on students between the age of 6 and 15 and their results in PISA testing. However, this relationship is not a strong one, and explains merely 15% of the variation in mean performance between countries.

To illustrate the point, cumulative spending per -student up to the age of 15 years in the Czech Republic is roughly a third of, and in Korea roughly a half of, spending levels in the United States, but while both the Czech Republic and Korea are among the top 10 performers on the PISA science scale, the United States performs below the OECD average. Similarly, Spain and the United States perform almost equally well on PISA science scores, but the United States spends about USD 95 600 per student up until the age of 15, while Spain spends about USD 61 860.

In summary, the results suggest that while spending on education is a necessary prerequisite for high-quality education, it is not enough on its own. -Effective use of resources is also essential.

To better understand how effectively resources are used, it is useful to examine the factors that -contribute to differences between countries in the -salary cost per student. As explained previously, teacher compensation accounts for the lion's share of education spending. Compensation of teachers is a function of four factors: instruction time of students; teaching time; teachers' salaries; and class size. -Differences among countries in these four factors may explain differences in the level of expenditure per -student.

Compensation cost per student varies from USD 570 in the Slovak Republic to about USD 9 850 in Luxembourg. However, as salary levels depend in part on a country's relative wealth, compensation costs must also be looked at as a percentage of GDP per -capita. Viewed in this light, teacher compensation cost per student varies from 3.9% of GDP per capita in the Slovak Republic (less than half the OECD average rate of 10.9%) to over five times that rate in Portugal (20.9%, nearly twice the OECD average).

Definitions

Student performance scores are based on the 2006 PISA round. Cumulative spending per student (expressed in USD using purchasing power parities) is approximated by multiplying public and private expenditure on educational institutions per student in 2005 at each level of education by the theoretical duration of education at these levels between the ages of 6 and 15 years.

Going further

For additional material, notes and a full explanation of sourcing and methodologies, see Education at a Glance 2008 (Indicator B7).

Areas covered include:

  • Contribution of various factors to salary cost per student.
  • Relationship between PISA performance and expenditure per student.
 
Indicator in PDF Acrobat PDF page

Figures
3.14. Relationship between PISA performance and spending (2005, 2006)
Relationship between PISA performance and spending (2005, 2006)
3.15. Salary cost per student as a percentage of GDP per capita, 2005
Salary cost per student as a percentage of GDP per capita, 2005