Indicator C1. How much is spent per student on educational institutions?

Expenditure per student on educational institutions at different levels of education

Annual expenditure per student on educational institutions from primary to tertiary level provides an assessment of the investment made in each student. In 2017, the average annual spending per student from primary to tertiary education in OECD countries as a whole was USD 11 200. But this average masks a broad range of figures across OECD and partner countries. Annual spending per student at these levels ranged from around USD 3 300 in Mexico, to more than USD 16 000 in Austria, Norway and the United States, and to more than USD 23 000 in Luxembourg (Table C1.1 and Figure C1.1). The drivers of expenditure per student vary across countries and by level of education: the countries with the highest expenditure per student enrolled in primary through tertiary education (e.g. Austria, Luxembourg and the United States) are also among those that tend to pay their teachers at secondary level the most (see Indicator D3), whereas Mexico has one of the highest ratios of students to teaching staff (see Indicator D2).

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 organisation, curricula, teaching style 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 9 100 per student at the primary level, and USD 10 500 per student at secondary level. At 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 ones. The size of the work-based component of VET programmes also influences their cost through expenditure on training and wages (Box C1.1).

Box C1.1. The cost of vocational education and training

Vocational education and training (VET) programmes form an important part of the curriculum in OECD countries. Their structure varies across countries (see Indicator B7), but in general, they are two or three year programmes (Kuczera, 2017[1]) that develop skills targeted at specific trades and occupations, and which can take place from lower secondary to tertiary level.

In most OECD countries, expenditure per student at upper secondary level varies according to programme orientation. In the 28 countries for which data are available, VET programmes are often more expensive than general educational programmes across OECD countries: expenditure per student in upper secondary vocational programmes in 2017 was, on average, USD 1 500 higher than in general programmes (Figure C1.2).

Various factors such as the size or structure of VET systems, the programmes offered, and also recent investments to upgrade the programmes, can influence the cost of vocational programmes:

• The share of students enrolled: countries with a smaller share of students enrolled in vocational programmes (see Figure B7.2a in Indicator B7) tend to spend more per student in VET programmes than on general programmes. In contrast, in Finland and Slovenia, where more than 70% of students are in VET programmes, these programmes are less expensive than general ones (Figure C1.2).

• The structure of the programmes: VET programmes with work-based components require additional expenditure related to training in the workplace. This could be direct expenditure by private companies or the private sector could be subsidised by the government. Countries where all or most VET students are enrolled in school-based programmes, such as Lithuania, tend to show small differences in expenditure per student between VET and general programmes. But in Iceland and Germany, where more than half of upper secondary VET students are enrolled in combined school- and work-based programmes, the differences are larger (Figure C1.2 and Figure B7.6 in Indicator B7).

• The field of study: some VET programmes require expensive equipment or sophisticated infrastructure to train students (Hoeckel, 2008[2]). This is particularly the case for programmes in science or technology. Countries where a large share of VET students graduate with a specialisation in engineering, manufacturing and construction, such as Chile, Estonia, Iceland and Sweden (above 40%, see Box B7.1 in Indicator B7) tend to spend more per student in vocational programmes than in general ones. The differences are also significant in countries where the field of health and welfare is the most popular, such as Greece, the Netherlands and Spain. In contrast, differences are smaller in countries such as Luxembourg where business, administration and law is the most popular field in upper secondary vocational programmes (Figure C1.2 and Box B7.1).

• Recent investment in VET programmes and curricula: while digitalisation might impact the future of VET, the evidence is that demand for VET graduates remains significant and that salaries of VET graduates are rising (Meer, 2007[3]). Therefore, the cost and the resources invested in VET programmes might be affected by the increasing demand, and the need to adapt VET programmes to the evolving skills needed in the labour market. For example, the Netherlands has engaged in initiatives to strengthen the link between the content of VET curricula and the job market. Consortia of vocational schools and business received additional funding from the business community, the education sector and the government in 2018 to invest in innovative VET training in regions (Eurydice, 2020[4]).

Figure C1.2. Total expenditure on educational institutions per full-time equivalent student, in vocational and general upper secondary education programmes (2017)

In equivalent USD converted using PPPs

Countries are ranked in descending order of the total expenditure per full-time equivalent student in vocational programmes.

Source: OECD/UIS/Eurostat (2020), Table C1.1. See Source section for more information and Annex 3 for notes (https://doi.org/10.1787/69096873-en).

 StatLink https://doi.org/10.1787/888934164389

The greater reliance on private funding in tertiary education has led to higher expenditure at this level than in lower ones (see Indicator C3, and Table C1.5, available on line). In 2017, while OECD countries spent on average around USD 10 000 per student at the primary, secondary and post-secondary non-tertiary levels, expenditure per student reached USD 16 300 at the tertiary level. However, the average expenditure at this level is driven up by high values in a few countries, most notably Canada, Luxembourg, Norway, Sweden, the United Kingdom and the United States (Annex Table C1.1). Significant differences are also observed at the subnational level (Box C1.2).

Expenditure per student on educational institutions rises with the level of education in almost all countries, but the range varies markedly across countries (Annex Table C1.1). OECD countries spend on average 16% more per secondary student than they do per primary student. This percentage is near 50% or more in the Czech Republic, France and the Netherlands. However, Chile, Denmark, Estonia, Iceland, Israel, Lithuania, Poland, the Slovak Republic and the United Kingdom all invest more per primary student than on each secondary student, despite the fact that teacher’s salaries, a strong driver of total expenditure, tend to increase with higher levels of education. Similarly, educational institutions in OECD countries spend an average of 24% more on each tertiary student (excluding R&D) than on each primary student. Hungary, Ireland, Turkey, the United Kingdom and the United States spend about twice as much on a tertiary student (excluding R&D) than on a primary student (Table C1.1).

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 89% of total expenditure per student from primary to tertiary educational institutions and it exceeds 90% in Chile, Latvia and Poland. In about one-third of OECD and partner countries with available data, annual expenditure on R&D and ancillary services per student accounts for around 11% or more of the total annual expenditure per student on primary to tertiary institutions. In the Slovak Republic and Sweden, this reaches 23% (Table C1.2).

However, this overall picture masks large variations across levels of education (Table C1.2 and Figure C1.3). 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 96% of their total per-student expenditure (about USD 9 500) on core educational services at these levels. However, in Finland, France, Hungary, the Slovak Republic, and Sweden ancillary services account for 10% or slightly more of the expenditure per student (Table C1.2).

The share 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 (Table C1.2). On average across OECD countries, 69% of total expenditure on educational institutions at tertiary level goes to core services. Excluding R&D activities, expenditure per student across OECD countries averages aboutr USD 11 200, ranging from about USD 2 000 in Colombia and Greece to USD 29 000 or more in Luxembourg and the United States (Table C1.2).

OECD countries in which R&D is mostly conducted in tertiary education 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 industry (Table C1.2). On average across OECD countries, expenditure on R&D and ancillary services at the tertiary level represents 31% of all tertiary expenditure on educational institutions per student. In eight of the OECD and partner 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 around 52% (Table C1.2).

The share of expenditure on ancillary services tends to be lower in tertiary education than at lower levels of education (Table C1.2). On average, only 5% of expenditure on tertiary institutions goes towards ancillary services, and the amount is negligible (below USD 100 per student) in the Czech Republic, Denmark, Finland, Israel, Sweden. Luxembourg, the Slovak Republic and the United States spend the most in ancillary services per student at tertiary level among OECD countries, over USD 2 000 per student (Table C1.2).

Expenditure per student on educational institutions relative to per capita GDP

Expenditure on educational institutions per student relative to GDP per capita is a measure of spending that takes into account the relative wealth of OECD countries. Since access to education in most OECD countries is universal (and usually compulsory) at lower levels of schooling, the amount spent per student as a share of per capita GDP can indicate whether the resources spent per student are proportionate to the country’s ability to pay. At higher levels of education, where student enrolment varies sharply among countries, the link is less clear. At tertiary level, for example, OECD countries may rank relatively high on this measure, even when a large proportion of their wealth is spent on educating a relatively small number of students.

Figure C1.3. Total expenditure on educational institutions per full-time equivalent student, by type of service (2017)

In equivalent USD converted using PPPs

1. Primary, secondary and post-secondary non-tertiary education includes pre-primary programmes.

2. Year of reference 2018.

Countries are ranked in descending order of total expenditure on educational institutions per full-time equivalent student.

Source: OECD/UIS/Eurostat (2020), Table C1.2. See Source section for more information and Annex 3 for notes (https://doi.org/10.1787/69096873-en).

 StatLink https://doi.org/10.1787/888934164408

In OECD countries, overall expenditure per student on educational institutions from primary to tertiary levels averages 26% of per capita GDP, which can be broken down into 23% at primary, secondary and post-secondary non-tertiary levels and 36% at the tertiary level (Table C1.4, available on line). Countries with low levels of expenditure per student may still be investing relatively large amounts as a share of per capita GDP. For example, Portugal’s expenditure per student for most educational levels and its per capita GDP are both below the OECD average and it spends an above-average share of its per capita GDP per student at most educational levels (Table C1.4, available on line).

The relationship between per capita GDP and expenditure per student on educational institutions is difficult to interpret. There is a clear positive relationship between the two at non-tertiary educational levels. In other words, less wealthy countries tend to spend less per student than richer countries. Although the relationship is generally positive at these levels, there are variations even between countries with similar levels of per capita GDP, especially among countries where per capita GDP exceeds USD 30 000. Austria and the Netherlands, for example, have similar levels of per capita GDP (around USD 40 000; see Table X2.1 in Annex 2) but they allocate very different shares of their wealth to primary, secondary and post-secondary non-tertiary education. Austria spends 28% of per capita GDP on non-tertiary institutions (above the OECD average of 23%) while the Netherlands spends 22% (Table C1.4, available on line).

At tertiary level, there is more variation in spending and in the relationship between countries’ relative wealth and their level of tertiary expenditure. Canada, the United Kingdom and the United States spend more than 50% of per capita GDP on each student in tertiary institutions (Table C1.4, available on line). The high share for the United Kingdom is mostly the result of its high expenditure on R&D, which accounts for about one-fifth of total expenditure per student at this level (Table C1.2).

Change in expenditure per student on educational institutions between 2012 and 2017

Changes in expenditure on educational institutions largely reflect changes in the size of the school-age population and the expenditure allocated to teachers’ compensation, which is a function of the number of teachers and teachers’ salaries. Teachers’ salaries, the main component of educational costs, have increased in the majority of countries over the past decade (see Indicator D3). 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 2017, expenditure per student on primary to tertiary educational institutions grew by an average rate of 1.3% per year in OECD countries while the number of students remained stable (Table C1.3 and Figure C1.4). Over this period, the average annual growth in spending per student was positive in all countries with data, with the exception of Canada, Finland, Mexico and Slovenia. The decrease in expenditure per student observed in these countries (between 0.2% and 2.0%) is either the combined effect of a reduction on spending on educational institutions and a slight increase in the number of students or, as in the case in Canada, the result of lower expenditure than student growth over this period. In some countries within the European Union, such as Estonia, Hungary, Latvia, Poland and the Slovak Republic, the strong annual growth rates in expenditure per student (around or above 2%) are explained by significant increases in expenditure accompanied by significant decreases in the growth of the number of students over the period under analysis. Outside the European Union, Chile, Iceland, Norway and Turkey have also reported increases in spending per student of around 2% per year in real terms since 2012 (Table C1.3).

At non-tertiary levels, the number of students remained fairly stable on average across OECD countries between 2012 and 2017. During the same period, expenditure on non-tertiary educational institutions increased by an annual average growth rate of 1.6% (Table C1.3). As a result, expenditure per student at these levels increased by 1.4% per year on average between 2012 and 2017. Most OECD countries spent more per student in 2017 than they did in 2012, with the exception of Denmark, Finland, Luxembourg, Mexico and Slovenia. Expenditure per student increased by more than 4% per year in Colombia, Hungary, Iceland and the Slovak Republic. This resulted from stable or slight annual reductions in student enrolments combined with significant annual increases (above 3%) in total spending on non-tertiary institutions between 2012 and 2017. In contrast, the increase in number of students enrolled was accompanied by a reduction in spending on educational institutions per student in Finland, Mexico and Slovenia (Annex Table C1.3).

Expenditure at tertiary level increased at a slightly smaller rate than at lower levels of education, rising on average by 0.9% annually between 2012 and 2017. It also increased faster than the number of students enrolled over this period (annual average growth rate of 0.5%). As a result, OECD countries recorded an average increase in expenditure per student of 0.4% per year over this period. However, there are stark differences across countries. Among OECD and partner countries with available data, Canada, Colombia, the Czech Republic, Finland, France, Germany, Greece, Israel, Lithuania, Mexico, the Netherlands, Spain and Turkey recorded a decrease in expenditure on tertiary education per student. 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 Estonia, Hungary, Iceland and the Slovak Republic due to an increase in total expenditure and a reduction in the number of students (Annex Table C1.3).

Figure C1.4. Average annual growth in total expenditure on primary to tertiary educational institutions per full-time equivalent student (2012 to 2017)

Countries are ranked in descending order of annual growth in total expenditure on primary to tertiary educational institutions per full-time equivalent student.

Source: OECD/UIS/Eurostat (2020), Table C1.3. See Source section for more information and Annex 3 for notes (https://doi.org/10.1787/69096873-en).

 StatLink https://doi.org/10.1787/888934164427

Public expenditure on educational institutions per student, by type of institution

The resources devoted to private educational institutions are higher than the ones devoted to public institutions. On average across OECD countries, total expenditure on primary to tertiary public institutions amounts to just over USD 11 000 per student, compared to USD 11 200 in private ones (Table C1.6, available on line). The differences are significant in countries such as Israel, the Netherlands, Turkey and the United States where expenditure per student in private institutions is at least USD 5 000 higher than in public ones. In contrast, in countries such as Austria, Canada, Luxembourg, and Iceland, more resources are invested per student in public institutions than in private ones (above USD 4 000) (Table C1.6, available on line).

Focusing on public sources of expenditure goes some way to show how much governments value education (see Indicator C4). Naturally, public funds go to public institutions; but in some cases a significant part of the public budget may be spent on private educational institutions. On average among OECD countries, public expenditure per student on primary to tertiary public educational instructions (USD 10 100) is nearly twice the public expenditure per student on private institutions (USD 5 500). However, the difference varies at different levels of education (Table C1.6, available on line). At non-tertiary level, average public expenditure per student on public institutions is USD 9 500, about 50% more than the expenditure on private institutions (USD 6 100), whereas at tertiary level it averages USD 13 300 on public institutions, more than three times the expenditure on private institutions (USD 4 400) (Table C1.6, available on line).