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).
