Educational expenditure

Expenditure on education is an investment that can foster economic growth, enhance productivity, contribute to personal and social development and reduce social inequality. The proportion of total financial resources devoted to education is one of the key choices made by governments, enterprises, students and their families. The demand for high-quality education, which can translate into higher costs per student, must be balanced against other demands on public expenditure and the overall tax burden. Policy makers must also balance the importance of improving the quality of educational services with the desirability of expanding access to educational opportunities.

Definition

Expenditure on institutions is not limited to expenditure on instruction services but includes public and private expenditure on ancillary services for students and their families, where these services are provided through educational institutions.

In principle, public expenditure includes both direct expenditure on educational institutions and educational related public subsidies to households administered by educational institutions. Private expenditure is recorded net of these public subsidies attributable to educational institutions; it also excludes expenditure made outside educational institutions (such as textbooks purchased by families, private tutoring for students and student living costs).

Comparability

Expenditure data were obtained by a special survey conducted in 2012 which applied consistent methods and definitions. Expenditure data are based on the definitions and coverage for the UNESCO-OECD-Eurostat data collection programme on education; they have been adjusted to 2012 prices using the GDP price deflator. The use of a common survey and definitions ensures good comparability of results across countries.

The level of expenditure on educational institutions is affected by the size of a country’s school age population, enrolment rates, level of teachers’ salaries, and the organisation and delivery of instruction. At the primary and lower secondary levels of education (corresponding broadly to the 5-14 year-old population), enrolment rates are close to 100% in OECD countries, and changes in the number of students are closely related to demographic changes. This is not as much the case in upper secondary and tertiary education, because part of the concerned population has left the education system.

Overview

In 2012, primary, secondary and post-secondary non-tertiary education accounted for more than two thirds of expenditure on educational institutions, or 3.7% of the GDP, on average across OECD countries. New Zealand spent more than 5% of its GDP on these levels of education, while the Czech Republic, Hungary, Indonesia, Latvia, Russia and Turkey spent 3% or less.

In 2012, the OECD average level of annual expenditure per student for primary, secondary and post-secondary non-tertiary education was USD 8 982. Between 2000 and 2012, a period of relatively stable student enrolment at these levels, spending per student increased in every country, rising by 35% on average.

Sources

Further information

Analytical publications

Methodological publications

Online databases

Websites

Table. Expenditure on primary, secondary, post-secondary non tertiary institutions

 http://dx.doi.org/10.1787/888933336128

Total public expenditure on primary to tertiary education, change between 2008 and 2012
As a percentage of total public expenditure, 2008 = 100, 2012 constant prices
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 http://dx.doi.org/10.1787/888933334944