Summary of Indicator C. Financial resources invested in Education

Education at a Glance 2021 | Chapter C: Financial resources invested in education 

Introduction

Adequate educational payment improves productivity in the labour market as workers acquire or further develop their skills. This, in turn, influences social and economic growth. Decisions about expenditure in education are a multi-party and multi-sectoral exercise involving the government, private companies, students, and their parents. A comparative approach to analysing financial spending on education in different countries not only indicates its potential future socioeconomic impact and facilitates the determination of best practices in education-related policymaking.

 

Framework for international educational finance indicators

On a national level, educational institutions are most referred to units in analysing financial expenditure because of the traditional interest in knowing how much enrolment costs. However, this approach is not very practical as it does not factor in variations in the provision of resources, either within countries or between companies in comparison with each other, and does not account for the different funding sources these institutions may have.

 

There are three dimensions to the framework for educational institutions:

• The location of service providers, whether they are inside or outside of education institutions. Spending outside of institutions includes books, private tutoring, living costs and transport costs;
• The types of goods and services provided or purchased. This covers expenditure directly related to instruction and education and expenditure covers costs related to student living and services provided by educational institutions to the public.
• The sources (private, public, or international) of the funds used to purchase these goods and services. Depending on when transactions are made, the sources of the funds can be analysed from the perspective of the initial payer (before a transfer is made) or from that of the final payer (after a transfer is made). Public transfers to private entities can either be subsidies to households, e.g., scholarships and grants, or other private entities. e.g., as part of apprenticeship programmes in companies.

 

Accounting for expenditure

For education, expenditure is recorded in the year in which it is spent, with the exception of expenditure for retirement costs, in which case countries are asked to attribute costs to arrive at the internationally comparable expense of employing personnel.

 

Summary by Farai Chikwanha from Education at a Glance 2021: OECD. Chapter C. Financial resources invested in Education

Edited by Olga Ruiz Pilato

 

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