Education at a Glance 2018

 

The framework for educational finance indicators

International indicators on education finance are defined in terms of the educational goods and services purchased in relation to the educational programmes. In practice, educational institutions are most commonly used as defining units rather than educational goods and services, reflecting the traditional interest in how much schools, colleges and universities cost. But while an institutional dimension is important, spending, particularly from public sources, outside of educational institutions helps support the learning and access to education within institutions. Differentiating the spending devoted to educational and non-educational goods and services offered by institutions also provides for an analysis of the expenditure devoted to core educational purposes. Finally the source of funds dedicated to education spending assesses who the major contributors are and the impact this may have on the access and provision of education.

It is therefore important to consider a framework for educational expenditure that is built around three dimensions:

• the location of service providers (within or outside of institutions)

• the goods and services provided or purchased (core and peripheral goods)

• the source of funds that finance the provision or purchase of these goods and services (from public, private and international sources).

Classification of educational expenditure

Educational expenditure in this chapter is classified through three dimensions:

The first dimension – represented by the horizontal axis in the diagram below – relates to the location where spending occurs. Spending on educational institutions includes spending on teaching institutions such as schools and universities, and non-teaching institutions such as education ministries and other agencies directly involved in providing and supporting education. Spending on education outside these institutions covers expenditure on educational good and services purchased outside institutions, such as books, computers and fees for private tutoring. It also deals with student living costs and costs of student transport not provided by educational institutions.

The second dimension – represented by the vertical axis in the diagram below – classifies the goods and services that are purchased. Educational core goods and services include all expenditure directly related to instruction and education. It covers all expenditure on teachers, maintenance of school buildings, teaching materials, books, tuition outside schools and administration of schools. However, not all expenditure on educational institutions can be classified as direct educational or instructional expenditure. Educational institutions in many OECD countries offer various ancillary services – such as meals, transport, housing, etc. – in addition to teaching services to support students and their families. At the tertiary level, spending on research and development can be significant. Additionally, not all spending on educational goods and services occurs within educational institutions. For example, families may purchase textbooks and materials themselves or seek private tutoring for their children. In this sense, "non-instruction” expenditure covers all expenditure broadly related to student living costs or services provided by institutions for the general public.

The third dimension – represented by the colours in the diagram below – distinguishes among the sources from which funding originates. These include the public sector and international agencies (indicated by light blue), and households and other private entities (indicated by medium-blue). Where private expenditure on education is subsidised by public funds, this is indicated by cells in the grey colour. The uncoloured cells indicate the parts of the framework that are excluded from the coverage of the finance indicators in Education at a Glance.

 

Types of goods and services
		Location of service providers
		Spending on educational institutions (e.g. schools, universities, educational administration and student welfare services)	Spending on education outside educational institutions (e.g. private purchases of educational goods and services, including private tutoring)
Spending on core educational goods and services		Public and international funds e.g. public spending on instructional services in educational institutions	Publicly subsidised private funds e.g. subsidised private spending on books, materials or fees for private tutoring
		Publicly subsidised private funds e.g. subsidised private spending on instructional services in educational institutions	Private funds e.g. private spending on books and other school materials or private tutoring
		Private funds e.g. private spending on tuition fees
Educational peripheral goods and services	Spending on research and development	Public and international funds e.g. public spending on university research
		Private funds e.g. funds from private industry for research and development in educational institutions
	Spending on educational services other than instruction	Public and international funds e.g. public spending on ancillary services such as meals, transport to schools, or housing on the campus	Publicly subsidised private funds e.g. subsidised private spending on student living costs or reduced prices for transport
		Public subsidised private funds e.g. public subsidies for lodging, meals, health services, or other welfare services furnished to students by the educational institutions
		Private funds e.g. private spending on fees for ancillary services	Private funds e.g. private spending on student living costs or transport

Educational finance indicators

This chapter provides a comprehensive and comparative analysis on education expenditure across OECD countries, focusing on seven aspects of educational spending:

• Financial resources invested on educational institutions, relative to the number of students (Indicator C1), and relative to national wealth (Indicator C2).

• The source of funds devoted on educational institutions (Indicator C3).

• Total public resources invested on education, both inside and outside of educational institutions, relative to total government spending (Indicator C4).

• The students' cost and the financial support of tertiary studies (Indicator C5).

• The distribution of educational expenditure across resource categories (Indicator C6).

• The contribution of various factors to the salary cost of teachers per student in public institutions (Indicator C7).