Education spending

Public spending on education reflects society’s investment in children to equip them with fundamental social and economic skills needed to be self-sufficient in life. Investing in education reduces poverty and boosts economic growth through human capital development, and is most efficient, in terms of long-term costs and benefits to society, and effective, in terms of human capital development, when investment starts during the early years and continues throughout childhood).

Public spending on education is around 4% of GDP on average across the Asia/Pacific and the OECD (Figure 4.12). However, cross-national variation is considerable: Public spending on education is over 7% of GDP in Bhutan and Kyrgyz Republic. By contrast, in Bangladesh and Cambodia public investment in education amounts to less than 2% of GDP.

On average across Asia/Pacific public investment in education in per cent of GDP increased since the mid-2000s. The increase in public spending on education as a per cent of GDP over this period was largest in Kyrgyz Republic and Brunei Darussalam (Figure 4.12, right scale). The largest decreases in the public education-to-GDP ratio (over 1 percentage point) were recorded for Fiji, Malaysia and Samoa.

Public spending on education as a percent of GDP can be higher in richer countries than in poorer countries but this is not necessarily so (Figure 4.13). For example, public spending on education as a per cent of GDP is similar in Australia, Korea, Mongolia, Samoa and Thailand, at very different levels of GDP per capita (Chapter 3). These differences can be explained by a range of factors, such as the role of private financing of education, which in Korea is among the highest in OECD countries, the level of wages of educators, costs of education material, and also population structures (Chapter 3). For example, the proportion of children (0‐19) in the populations of Mongolia and Samoa (36% and 48% respectively) is much higher than in Australia (25%) or Korea (20%).

When considering education spending per student the picture is different. Public spending on education per primary student is higher in richer countries (Figure 4.14) in the OECD on average it is more than twice as high as on average across the Asia/Pacific region. Public investment in education per student in Nepal is comparatively low, but still higher than in Cambodia (KHM) where GDP is higher than in Nepal (Chapter 3).

Data and measurement

Data on public education spending as a per cent of GDP were taken from OECD (2018) Education at a Glance for the OECD, and the UNESCO Institute for Statistics for Asia and the Pacific (http://stats.uis.unesco.org/unesco/Report Folders/ReportFolders.aspx). Public spending on education includes government spending on educational institutions including different levels of education as pre-primary, primary, secondary education and post-secondary education and tertiary education, spending on fee support for low-income parents and towards school meals is also included. Data on public spending per primary education student (in USD PPP) were taken from the UNESCO data centre (http://data. uis.unesco.org/Index.aspx?queryid=191).

Further reading

OECD (2018), Education at a Glance 2018: OECD Indicators, OECD Publishing, Paris, www.oecd.org/education/education-at-a-glance/.

United Nations (2017), “World Population Prospects – 2017 Revision”, http://esa.un.org/wpp/unpp/panel_population.htm.

Figure 4.12. Public investment in education increased across Asia Pacific countries
Public expenditure on education as % of GDP
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Data for change in the GDP share of spending on education, mid 2000s to latest year is not available for New Zealand.

UNESCO Institute for Statistics, Finance Indicators by ISCED level, http://stats.uis.unesco.org/unesco/TableViewer/tableView.aspx? ReportId=172, OECD 2018 Education at a glance: Educational finance indicators, World Bank, World Development Indicators, http://data.worldbank. org/indicator.

 StatLink http://dx.doi.org/10.1787/888933900211

Figure 4.13. Rich countries do not necessary spend more on education
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UNESCO Institute for Statistics, Finance Indicators by ISCED level, http://stats.uis.unesco.org/unesco/TableViewer/tableView. aspx?ReportId=172, OECD 2018 Education at a glance: Educational finance indicators, World Bank, World Development Indicators, http://data.worldbank.org/indicator.

 StatLink http://dx.doi.org/10.1787/888933900230

Figure 4.14. Education as percentage of GDP and public spending per primary student
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UNESCO Institute for Statistics, Finance Indicators by ISCED level, http://stats.uis.unesco.org/unesco/TableViewer/tableView. aspx?ReportId=172, OECD 2018 Education at a glance: Educational finance indicators, World Bank, World Development Indicators, http://data.worldbank.org/indicator.

 StatLink http://dx.doi.org/10.1787/888933900249

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