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Public and private education expenditure
Expenditure on education is an investment that can help to 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 in each country by governments, enterprises and individual students and their families.
Definition
This indicator covers expenditure on schools, universities and other public and private institutions involved in delivering or supporting educational services. Expenditure on institutions is not limited to expenditure on instructional services but also includes public and private expenditure on ancillary services for students and families, where these services are provided through educational institutions. At the tertiary level, spending on research and development can also be significant and is included in this indicator, to the extent that the research is performed by educational institutions.
In principle, public expenditure includes public subsidies to households attributable for educational institutions and direct expenditure on educational institutions from international sources. However, public subsidies for educational expenditure outside educational institutions (e.g. textbooks purchased by families, private tutoring sought for students, student living costs) are excluded. At the tertiary level, student living costs and forgone earnings can also account for a significant proportion of the costs of education.
Comparability
The broad definition of institutions outlined above ensures that expenditure on services, which are provided in some OECD countries by schools and universities and in others by agencies other than schools, are covered on a comparable basis. Additionally, to ensure comparability over time the data on expenditure for 1995 were obtained by a special survey updated in 2003; expenditure for 1995 was adjusted to the methods and definitions used in the 2003 data collection.
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Long-term trends In 2003, taking into account both public and private sources of funds, OECD countries as a whole spent 6.3% of their collective GDP on their educational institutions. The highest spending on educational institutions can be observed in Denmark, Iceland, Korea and the United States, with more than 7% of GDP. Seven out of 29 OECD countries for which data are available, however, spend less than 5% of GDP on educational institutions. In all the countries, public and private expenditure on education increased by 5% or more between 1995 and 2003 in real terms. However, the increase in spending on education between 1995 and 2003 tended to fall behind the growth in national income in eight of the 21 OECD countries. Most notable differences are observed in Austria, Canada, Ireland, Norway and Spain where the proportion of GDP spent on education decreased by 0.4 or more in percentage points between 1995 and 2003. It should be noted that growth in GDP masks the fact that there was a significant increase in real terms in spending on educational institutions in almost all of the OECD countries from 1995 to 2003. In addition, the size of the school age population shapes the demand for education and training, and national levels of teachers’ salaries also affect the share of expenditure on education. |
Source
- OECD (2006), Education at a Glance, OECD, Paris.
Further information
Analytical publications
- OECD (2006), Schooling for Tomorrow – Think Scenarios, Rethink Education, OECD, Paris.
- OECD (2006), Starting Strong II: Early Childhood Education and Care, OECD, Paris.
Methodological publications
- UIS, OECD and Eurostat (2002), UOE Data Collection – 2002 Data Collection on Education Systems: Definitions, Explanations and Instructions, OECD, Paris.
- OECD (2004), OECD Handbook for Internationally Comparative Education Statistics: Concepts, Standards, Definitions and Classifications, OECD, Paris.
Websites
- OECD, Education at a Glance, www.oecd.org/edu/eag2006.
| Texts | |
| • | Indicator web page |
| • | Indicator in PDF |
| Tables (xls) | |
| • | Expenditure on educational institutions for all levels of education |
| Graphics | |
| • | Total expenditure on educational institutions for all levels of education |
Total expenditure on educational institutions for all levels of education
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