Indicator C1. How much is spent per student on educational institutions?
In 2019, OECD countries spent an average of USD 17 560 per student per year at the tertiary level. However, this average is driven up by high values in a few countries, reaching over USD 25 000 in Luxembourg, Norway, Sweden, the United Kingdom and the United States.
On average across OECD countries, 63% of total expenditure on tertiary educational institutions goes to core services (e.g. teachers’ salaries, school buildings, teaching materials and administration), 33% on research and development (R&D) activities, and 4% on ancillary services (e.g. meals and transport).
Between 2012 and 2019, expenditure on tertiary educational institutions grew by an average of 1.4% per year in real terms across OECD countries, while the number of students increased only by 0.3% per year. This resulted in an average increase in expenditure per student in tertiary education of 1.0% per year.
Context
The willingness of policy makers to expand access to educational opportunities and to provide high-quality education can translate into higher costs and must be balanced against other demands on public expenditure and the overall tax burden. As a result, the question of whether the resources devoted to education yield adequate returns features prominently in public debate. Although it is difficult to assess the optimal resources needed to prepare each student for life and work in modern societies, international comparisons of spending on educational institutions per student can provide useful reference points.
This indicator provides an assessment of the investment in each student. Expenditure per student on educational institutions is influenced by teachers’ salaries (see Indicator D3), pension systems, instructional and teaching hours (see Indicators D4), the cost of teaching materials and facilities (see Indicator C6), the programme provided (e.g. general or vocational), and the number of students enrolled in the education system (see Indicator B1). Policies to attract new teachers, reduce average class sizes or change staffing patterns have also affected per-student expenditure. In some countries expenditure for ancillary services and R&D can also have great influence on the expenditure per student.
In general, at primary and secondary levels, educational expenditure is dominated by spending on teaching. At the tertiary level, other services, particularly those related to ancillary services or R&D activities, can account for a significant proportion of educational spending.
Other findings
On average, the expenditure per student on short-cycle tertiary programmes each year is about two-thirds that of at bachelor’s, master’s and doctoral levels combined.
The total resources devoted to private educational institutions are similar to those devoted to public institutions on average across all education levels. Across OECD countries, the average total expenditure on primary to tertiary public institutions amounts to about USD 11 900 per student, compared to just under USD 12 100 in private institutions.
Expenditure on tertiary academic programmes is higher than on professional programmes for almost all of the eight countries with available data. In Chile, the Czech Republic, Germany and Greece, expenditure per student on academic programmes is at least twice as high as on professional programmes.
On average across the OECD, countries spend a cumulative total of USD 105 500 to educate a student from the age of 6 to the age of 15. Austria, Luxembourg, and Norway spend over USD 150 000 per student over these years, while the figure is less than USD 50 000 in Colombia and Türkiye.
Overall expenditure per student on educational institutions
Annual expenditure per student on primary to tertiary educational institutions provides an assessment of the investment made in each student. In 2019, the average annual spending per student from primary to tertiary education in OECD countries as a whole was around USD 12 000. But this average masks a broad range of spending across OECD countries. Annual spending per student at these levels ranged from around USD 3 600 in Mexico to around USD 17 500 in Austria and Norway, around USD 19 500 in the United States and over USD 25 400 in Luxembourg (Table C1.1). The drivers of expenditure per student vary across countries and by level of education: in Luxembourg, for example high teachers’ salaries at primary and secondary levels (see Indicator D3) are reflected in high levels of expenditure per student. In contrast, Colombia has one of the highest ratios of students to teaching staff (see Indicator D8 and Education at a Glance Database), which tends to drive costs down (OECD, 2021[1]).
Expenditure per student on educational institutions by level of education
The way resources are allocated across the different levels of education varies widely from level to level and largely reflects the mode of educational provision. Education still essentially takes place in settings with generally similar organisations, curricula, teaching styles and management. These shared features have tended to result in similar patterns of expenditure per student from primary to post-secondary non-tertiary levels. OECD countries as a whole spend on average around USD 9 900 per student at the primary level and USD 11 400 per student at secondary level (Figure C1.1). At the secondary level, and particularly at upper secondary, the level of expenditure is strongly influenced by the programme orientation. Vocational education and training (VET) programmes, which may require specific equipment and infrastructure, typically cost more per student than general programmes (Table C1.1).
In 2019, expenditure per student averaged USD 17 560 at the tertiary level across OECD countries. However, this figure is driven up by high values in a few countries, reaching over USD 25 000 in Luxembourg, Norway, Sweden, the United Kingdom and the United States (Figure C1.1 and Table C1.1). The available data also show annual expenditure per student varies widely depending on the tertiary education level. On average, expenditure on short-cycle tertiary programmes is about two-thirds of combined bachelor’s, master’s and doctoral or equivalent levels (or long-cycle tertiary), but again, this masks wide variation across countries. Expenditure on short-cycle tertiary programmes ranges from less than 25% of bachelor’s, master’s and doctoral or equivalent levels in Hungary, Luxembourg and Sweden to roughly equal levels of spending in Denmark and Iceland, and greater expenditure per student at short-cycle tertiary level in the Czech Republic where, in 2019 expenditure at this level was 52% higher (Figure C1.2).
Annual expenditure per student can also vary substantially within countries, particularly in those where a large share of education expenditure is provided by local governments (Box C1.1).
Decentralisation of government services in OECD countries often results in subnational governments being responsible for the delivery of key government services such as education (Dougherty and Phillips, 2019[2]). Evidence shows that educational performance (Kim and Dougherty, 2018[3]) and human capital levels (Blöchliger, Égert and Bonesmo Fredriksen, 2013[4]) might increase as a result of fiscal decentralisation and increased budget devoted to education. Annual expenditure per student can be quite heterogeneous across countries with large differences between regions, due to their economic circumstances and geographic challenges. Among the eight countries with available data at subnational level, Canada and the United States have the highest variation in annual expenditure per student on educational institutions at primary and secondary levels combined: in the United States, the region with the highest value (around USD 28 200) spends over three times as much per student as the region with the lowest value (around USD 9 100). Smaller regional differences are found in Colombia and Germany, while in Belgium and Lithuania, expenditure per student on primary and secondary educational institutions is almost identical across the regions (OECD, 2022[5]).
Expenditure per student on core education services, ancillary services and R&D
On average across OECD countries, expenditure on core education services (such as teaching costs and other expenditure related to education) represents 86% of total expenditure per student from primary to tertiary educational institutions, and this share reaches the highest values in Chile, Latvia, Luxembourg and Türkiye. In less than half of OECD countries with available data, annual expenditure on R&D and ancillary services per student accounts for around 15% or more at primary to tertiary level. In Denmark, Finland, and Sweden, this reaches 20% or more (Table C1.4).
However, this overall picture masks large variations across levels of education. At non-tertiary levels (primary, secondary and post-secondary non-tertiary education), expenditure is dominated by spending on core education services. On average, OECD countries spend about 95% of their total per-student expenditure (about USD 10 360) on core educational services at these levels. However, in Finland, France, the Slovak Republic, Sweden and the United Kingdom, ancillary services account for 10% or slightly more of the total (Table C1.4).
The breakdown of total expenditure on educational institutions per student devoted to core services differs more widely at tertiary level, as R&D expenditure can account for a significant proportion of educational spending. OECD countries in which R&D is mostly conducted in tertiary educational institutions tend to report higher levels of expenditure per student than those where a large proportion of R&D is performed in other public institutions or in research institutes. On average across OECD countries, 63% of total expenditure on educational institutions at tertiary level goes to core services while expenditure on R&D and ancillary services together average 37%, with ancillary services accounting for less than 5%. In six of the OECD countries for which data are available, expenditure on R&D and ancillary services in tertiary institutions is at least 40% of total expenditure on educational institutions per student, with Denmark and Sweden recording the highest shares, at 50% or more (Table C1.4).
Expenditure per student on core services across OECD countries averages about USD 12 000, ranging from less than USD 7 000 in Lithuania to over USD 26 000 in Luxembourg and the United States. Expenditure per student on R&D activities averages around USD 6 200 across the OECD and ranges from less than USD 1 000 in Chile to around USD 11 800 in Denmark, around USD 14 000 in Sweden and over USD 17 000 in Luxembourg and Switzerland (Figure C1.3). Expenditure on ancillary services is negligible (below USD 100 per student) in the Czech Republic, Denmark, Finland, Israel and Sweden. The United States spends the most in ancillary services per student at tertiary level among OECD countries, at over USD 4 400 per student (Table C1.4).
Expenditure per student varies less between different tertiary programme categories, but is generally higher for academic programmes than for professional programmes. This is probably due to a higher incidence of R&D funding in academic programmes. However, only a few countries collect the data needed to carry out this type of analysis (Box C1.2).
Tertiary education builds on secondary education, providing learning activities in specialised fields of education. It aims at learning at a high level of complexity and specialisation and includes programmes with very different design features and functions. Tertiary education has not just expanded over the last decades, it has also diversified. Programmes are now offered by a wider range of institutions and it is now common in many countries to have universities of applied sciences alongside more traditional universities (OECD, 2022[6]). Therefore, tertiary education is not just what is commonly understood as academic education but also includes advanced vocational or professional education (UNESCO-UIS, 2012[7]).
Tertiary professional programmes can range from free-standing professional examinations designed to upskill existing practitioners to full professional bachelor’s degrees. In general, they are designed to give learners the knowledge, skills and competencies specific to a particular occupation, trade, or class of occupations or trades. Programmes may have work-based components (e.g. apprenticeships, traineeship and dual-system education programmes) and their successful completion may lead to specific labour market-relevant qualifications. Academic programmes are designed to develop learners’ general knowledge, skills and competencies to prepare participants for more advanced education programmes. Academic education does not normally prepare for employment in a particular occupation, trade or class of occupations or trades, nor lead directly to a labour market-relevant qualification (UNESCO-UIS, 2012[7]). In some cases the scale of enrolment in professional tertiary education rivals that of regular universities, in other cases practically oriented programmes are taught in multi-purpose institutions alongside programmes like history or physics. For example, France applies a broad definition of “professional” and includes five-year business schools and long first degree programmes in law, medicine, pharmacy and odontology in this category (OECD, 2022[6]).
At tertiary education levels, the terms “academic” and “professional” are used in place of general and vocational respectively. ISCED 2011 does not define academic and professional more precisely for higher ISCED levels, but allows programme orientations to be distinguished based on national definitions and criteria. Among the countries that report data by orientation in this way, expenditure per student on academic tertiary programmes is higher than on professional ones for almost all the countries with available data. In Chile, the Czech Republic, Germany and Greece, expenditure per student for academic programmes is at least twice as high as for professional programmes. This could generally be explained by the greater focus on research and development in traditional universities where academic programmes are delivered. However, this explanation may not hold in all instances, in particular in Austria, Norway and the United Kingdom, where the difference is relatively low, and in Luxembourg, where expenditure per student is slightly higher for professional programmes (Figure C1.4).
Cumulative expenditure over the expected duration of studies
Policy makers are interested in the relationship between the resources devoted to education and the outcomes of education systems (OECD, 2017[8]). In order to compare the cost of education across countries, it is important to consider not only the annual expenditure per student, but also cumulative expenditure over the total period students are expected to spend at a given educational level. High expenditure per student, for example, might be offset by short programmes or fewer students accessing education at certain levels. On the other hand, a seemingly inexpensive education system per student might prove more costly overall if enrolment is high and students spend longer in school.
Primary and secondary education are usually compulsory across the OECD, and adding up the expenditure per student for the years between 6 and 15 at these levels gives the theoretical cumulative expenditure per student for compulsory education. On average across OECD countries, the cumulative spending on each student between the age of 6 and the age of 15 adds up to a total of around USD 105 500. This total varies considerably across countries: Austria, Luxembourg and Norway spend over USD 150 000 per student over these years, while the figure is less than USD 50 000 in Colombia and Türkiye (Table C1.7, available on line).
Total and public expenditure on educational institutions per student, by type of institution
The way resources are allocated to public and private institutions varies widely across educational levels, although both types of institutions have similar average levels of expenditure per student. On average across OECD countries, total expenditure on primary to tertiary public institutions amounts to about USD 11 900 per student, compared to just under USD 12 100 in private ones. However, the differences are more substantial in countries such as Israel, the Netherlands, and Türkiye, where expenditure per student on private institutions is at least 70% higher than expenditure on public ones. In contrast, in countries such as the Czech Republic, Luxembourg, and New Zealand, expenditure on private institutions is at least 40% lower than on public institutions (Table C1.2).
Government funding for education is generally spent on public institutions but some countries spend a large part of the public budget on private educational institutions. On average across OECD countries, public expenditure per student on primary to tertiary public educational instructions (about USD 11 000) is nearly twice the public expenditure per student on private institutions (about USD 5 900). However, the gap varies at different levels of education. At non-tertiary levels, average public expenditure per student on public institutions is about USD 10 300, about 50% more than public expenditure on private institutions (about USD 6 500), whereas at tertiary level it averages about USD 14 100 on public institutions, more than three times the expenditure on private institutions (USD 4 500) (Table C1.2).
Change in expenditure per student on educational institutions between 2012 and 2019
Changes in expenditure on educational institutions largely reflect changes in the size of the school-age population and the expenditure allocated to teachers’ compensation, one of the main drivers of education expenditure. The size of the school-age population influences both enrolment levels and the amount of resources and organisational effort a country must invest in its education system. The larger this population, the greater the potential demand for education services. Changes in expenditure per student over the years may also vary between levels of education within countries, as both enrolment and expenditure may follow different trends at different levels of education.
Between 2012 and 2019, expenditure on primary to tertiary educational institutions in OECD countries grew by an average of 1.6% per year in real terms, while the number of students remained relatively stable. This meant expenditure per student grew at an average annual rate of 1.7%. Spending per student grew in all countries with available data in the period 2012-19, with the exception of Finland, Greece and Mexico, where spending per student fell by 0.3-0.5% per year on average. Expenditure per student fell in Finland and Greece due to the combination of stagnating funding for educational institutions and a slight increase in the number of students, whereas in Mexico the fall was due to student numbers growing faster than educational expenditure. In some countries in the European Union, such as Estonia, Hungary, Latvia, Poland and the Slovak Republic, the strong annual growth rates in expenditure per student (over 3%) can be explained by a large increase in expenditure accompanied by a reduction in the number of students during the period under analysis. Outside the European Union, Colombia, Iceland and Türkiye also report increases in spending per student of around or above 2.5% per year in real terms since 2012 (Figure C1.5).
Prior to the COVID-19 pandemic, global education funding was growing steadily and low- and middle-income countries were experiencing the fastest growth rates. Since the beginning of the COVID-19 pandemic started, education budgets declined in the majority of these countries (UNESCO and World Bank, 2021[9]). In contrast, while education budgets were growing at much more moderate pace before the pandemic among high-income countries, including many OECD countries, education budgets did not decrease and their share of total government expenditure did not change very much post-COVID (see Indicator C4). As schools were closed for extended periods in 2020, it was important to ensure that adequate resources were made available for remote learning and to maintain and expand student support programs; once schools reopened, it was critical to allocate additional funding to educational institutions (Al-Samarrai, Gangwar and Gala, 2020[10]).
As the OECD reported in 2021, half of the OECD countries with available data increased funding for primary to post-secondary non-tertiary educational institutions between 2019 and 2020 (OECD, 2021[11]). In five of the eight countries with provisional data available at this level, expenditure per student grew by 1-7.6% between 2019 and 2020 despite the number of students remaining rather stable (±1.1%). In the remaining three countries, a decrease in expenditure translated into a decline in expenditure per student, regardless of the small changes in the number of students. At the tertiary level, according to provisional data on educational finance, only in New Zealand and Slovenia did expenditure per student increase in 2020, while it decreased in all other countries and reached -4.8% in the Netherlands and -8.9% in Norway. In Luxembourg, the Netherlands and Norway, the fall in expenditure per student was due also to an increase in the number of students by 4% or more (Figure C1.6).
The number of students in non-tertiary education remained fairly stable on average across OECD countries between 2012 and 2019. During this period, expenditure on non-tertiary educational institutions grew by an annual average of 1.6%. As a result, expenditure per student at these levels increased by 1.7% per year on average between 2012 and 2019. Most OECD countries spent more per student in 2019 than they did in 2012, with the exception of Greece, Mexico, and Slovenia. Expenditure per student on non-tertiary institutions increased by at least 4% per year in Colombia, the Czech Republic, Hungary, Iceland, Lithuania, the Slovak Republic and Türkiye. This growth was due to stable or slight annual reductions in student numbers, combined with large annual increases (above 4%) in total spending (Table C1.3).
Expenditure at tertiary level increased slightly more slowly than at lower levels of education, growing by 1.4% per year on average between 2012 and 2019 in OECD countries. However, it grew faster than the number of students enrolled over this period (0.3% per year on average). This resulted in a 1.0% increase per year on average. There are stark differences across countries: among OECD countries with available data, there were reductions in expenditure per student on tertiary education in Canada, Colombia, Finland, France, Germany, Greece, Israel, Italy, Mexico, the Netherlands and Türkiye. In most of these countries, the decline was mainly the result of a rapid increase in the number of tertiary students. In contrast, expenditure per tertiary student increased by more than 4% in the Czech Republic, Estonia, Latvia, Poland and the Slovak Republic due to an increase in total expenditure and a reduction in the number of students (Table C1.3).
Provisional data on education expenditure in 2020 are available for a small number of countries. These figures are useful to take a first comparative look at the overall trends in expenditure per student during the first year of the COVID-19 health crisis (Box C1.3).
Ancillary services are services provided by educational institutions that are peripheral to their main educational mission. The main component of ancillary services is student welfare. In primary, secondary and post-secondary non-tertiary education, student welfare services include meals, school health services, and transportation to and from school. At the tertiary level, they include residence halls (dormitories), dining halls and health care.
Core educational services include all expenditure that is directly related to instruction in educational institutions, including teachers’ salaries, construction and maintenance of school buildings, teaching materials, books, and school administration.
Research and development includes research performed at universities and other tertiary educational institutions, regardless of whether the research is financed from general institutional funds or through separate grants or contracts from public or private sponsors.
The annual average growth rate is calculated using the compound annual growth rate which shows the geometric progression ratio that provides a constant rate of return over the time period under analysis.
Expenditure per student on educational institutions at a particular level of education is calculated by dividing total expenditure on educational institutions at that level by the corresponding full-time equivalent enrolment. Only educational institutions and programmes for which both enrolment and expenditure data are available are taken into account. Expenditure in national currencies is converted into equivalent USD by dividing the national currency figure by the purchasing power parity (PPP) index for GDP. The PPP conversion factor is used because the market exchange rate is affected by many factors (interest rates, trade policies, expectations of economic growth, etc.) that have little to do with current relative domestic purchasing power in different OECD countries (see Annex 2 for further details).
Data on subnational regions on how much is spent per student are adjusted using national PPPs. Future work on the cost of living at subnational level would be required to fully adjust the expenditure per student used in this section.
Expenditure per student on educational institutions relative to GDP per capita is calculated by dividing expenditure per student on educational institutions by GDP per capita. In cases where the educational expenditure data and the GDP data pertain to different reference periods, the expenditure data are adjusted to the same reference period as the GDP data, using inflation rates for the OECD country in question (see Annex 2).
Full-time equivalent student: The ranking of OECD countries by annual expenditure on educational services per student is affected by differences in how countries define full-time, part-time and full-time equivalent enrolment. Some OECD countries count every participant at the tertiary level as a full-time student, while others determine students’ intensity of participation by the credits that they obtain for the successful completion of specific course units during a specified reference period. OECD countries that can accurately account for part-time enrolment have higher apparent expenditure per full-time equivalent student on educational institutions than OECD countries that cannot differentiate between the different types of student attendance.
Vocational education and training expenditure: Expenditure on workplace training provided by private companies is only included when it is part of combined school- and work-based programmes, provided that the school-based component represents at least 10% of the study over the whole programme duration. Other types of employer-provided workplace training (e.g. entirely work-based training or employee training that takes place 95% at work) are excluded. Expenditure on VET programmes include the expenditure on training (e.g. salaries and other compensation of instructors and other personnel, as well as the cost of instructional materials and equipment). However, it excludes apprentices’ wages and other compensations to students or apprentices.
For more information please see the OECD Handbook for Internationally Comparative Education Statistics 2019 (OECD, 2018[12]) and Annex 3 for country-specific notes (https://www.oecd.org/education/education-at-a-glance/EAG2022_X3-C.pdf).
Data refer to the financial year 2019 (unless otherwise specified) and are based on the UNESCO, OECD and Eurostat (UOE) data collection on education statistics administered by the OECD in 2021 (for details see Annex 3 at (https://www.oecd.org/education/education-at-a-glance/EAG2022_X3-C.pdf). Data from Argentina, China, India, Indonesia, Saudi Arabia and South Africa are from the UNESCO Institute of Statistics (UIS).
The data on expenditure for 2012 to 2019 were updated based on a survey in 2021-22, and expenditure figures for 2012 to 2019 were adjusted to the methods and definitions used in the current UOE data collection. Provisional data on educational expenditure in 2020 are based on an ad-hoc data collection administered by the OECD and Eurostat in 2022.
Data on subnational regions are currently available for six countries: Belgium, Canada, Colombia, Germany, Lithuania and the United States. Subnational estimates were provided by countries using national data sources. Subnational data are based on a special survey administrated by the OECD in 2021.
References
[10] Al-Samarrai, S., M. Gangwar and P. Gala (2020), The Impact of the COVID-19 Pandemic on Education Financing, https://doi.org/10.1596/33739.
[4] Blöchliger, H., B. Égert and K. Bonesmo Fredriksen (2013), “Fiscal federalism and its impact on economic activity, public investment and the performance of educational systems”, OECD Economics Department Working Papers, No. 1051, OECD Publishing, Paris, https://doi.org/10.1787/5k4695840w7b-en.
[2] Dougherty, S. and L. Phillips (2019), “The spending power of sub-national decision makers across five policy sectors”, OECD Working Papers on Fiscal Federalism, No. 25, OECD Publishing, Paris, https://doi.org/10.1787/8955021f-en.
[3] Kim, J. and S. Dougherty (eds.) (2018), Fiscal Decentralisation and Inclusive Growth, OECD Fiscal Federalism Studies, OECD Publishing, Paris/Korea Institute of Public Finance, Seoul, https://doi.org/10.1787/9789264302488-en.
[6] OECD (2022), Pathways to Professions: Understanding Higher Vocational and Professional Tertiary Education Systems, OECD Reviews of Vocational Education and Training, OECD Publishing, Paris, https://doi.org/10.1787/a81152f4-en.
[5] OECD (2022), Subnational data: Financial resources invested in education, https://stats.oecd.org/Index.aspx?DataSetCode=EDU_FIN_SUBNAT.
[1] OECD (2021), Education at a Glance 2021: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/b35a14e5-en.
[11] OECD (2021), The State of School Education: One Year into the COVID Pandemic, OECD Publishing, Paris, https://doi.org/10.1787/201dde84-en.
[12] OECD (2018), OECD Handbook for Internationally Comparative Education Statistics 2018, OECD Publishing, Paris, https://doi.org/10.1787/9789264304444-en.
[8] OECD (2017), Education at a Glance 2017: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/eag-2017-en.
[9] UNESCO and World Bank (2021), Education Finance Watch 2021, https://documents.worldbank.org/en/publication/documents-reports/documentdetail/226481614027788096/education-finance-watch-2021 (accessed on 20 June 2022).
[7] UNESCO-UIS (2012), International Standard Classification of Education ISCED 2011, http://www.uis.unesco.org.
Cut-off date for the data: 17 June 2022. Any updates on data can be found on line at: https://doi.org/10.1787/eag-data-en. More breakdowns can also be found at: http://stats.oecd.org, Education at a Glance Database.