Total societal spending on education relative to the size of the economy tends to rise as countries become wealthier or less poor, notes ‘Advancing Global Education: Patterns of potential human progress,’ volume 2 ( >www.oup.com ). Education being a ‘superior good’ in economic terms, and since societies spend greater portions of income on superior goods as they become more well-to-do, education spending as a portion of GDP rises with GDP per capita, explain the authors Janet R. Dickson, Barry B. Hughes, and Mohammod T. Irfan.
Interestingly, they find that education funding as a portion of government spending tends to decrease as societies become richer because total government spending, especially on transfer payments and health, rises even faster than that on education.
As regards allocations of education expenditure across levels, global averages mentioned in the book are as follows: Pre-primary 5 per cent; primary 30 per cent; secondary 40 per cent; and tertiary over 20 per cent (the high share of tertiary reflects the higher per-student cost of tertiary education and the high tertiary enrolment rates in high-income countries).
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While low income economies increased the proportion of GDP spent on education by one-third over the last about three decades, ‘the least growth in public expenditure as a proportion of GDP has occurred in the lower middle-income economies, which include China, India, and Indonesia.’
The authors bemoan the fact that in Central Asia, ‘public funding for education has fallen dramatically in the post-communist era, which does not bode well for the future development of human potential.’ They also remind one of the high improbability that expenditure shares of GDP in the 1-3 per cent range, which characterised about 30 countries between 2000 and 2005, are adequate to provide universal primary education with even modest attention to other levels of education.
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A metric of education quality can be the spending per student relative to GDP per capita, considering that salaries on average make up three-fourths of total education spending from pre-primary through upper secondary levels, other current spending (e.g. for instructional materials) is on average 15 per cent of the total, and capital spending constitutes the balance.
Data for 2005 show that high-income regions spent about a fifth of GDP per capita to educate each primary student; in South and West Asia, and Central Asia, the proportion is less than a tenth.
An insight of value is that countries struggling to expand education find costs per student tending to be higher at low rates of enrolment. Reasons for this phenomenon, as the authors outline, include the costs associated with building new physical and administrative infrastructure and the costs of employing teachers.
“Teachers may be especially expensive in the absence of a well-developed system for teacher preparation, as demand for their services frequently outstrips supply when an education system is in the early stages of expansion.” Thankfully, though, higher enrolment levels lead to economies of scale and experience in education delivery, which in turn can mitigate continued increases in per-student costs.
Educative study.