Education Spending Per Student: A Global Perspective

Education is increasingly viewed as both a right and a duty, with governments worldwide expected to ensure access to basic education for all citizens. This article explores the statistics behind education spending per student across different countries, examining trends, disparities, and the factors influencing these expenditures.

The Rising Cost of Education in the U.S.

In the United States, the average current expenditures per pupil enrolled in public elementary and secondary schools have seen a significant increase. After adjusting for inflation, these expenditures rose by 13 percent from $14,453 in 2010-11 to $16,280 in 2020-21. These current expenditures encompass a variety of services and commodities, including staff salaries, employee benefits, purchased services, tuition, supplies, and other related expenses.

Notably, the object of the majority of current expenditures for education was salaries. However, the percentage of current expenditures allocated to staff salaries decreased from 59 to 55 percent between 2010-11 and 2020-21. Conversely, the percentage spent on employee benefits increased from 21 to 24 percent during the same period. Collectively, salaries and benefits accounted for 79 to 80 percent of current expenditures throughout the decade.

Is Money the Only Factor?

While the U.S. invests heavily in education, concerns remain about whether this translates into better results for students. In 2014, the U.S. spent an average of $16,268 a year to educate a pupil from primary through tertiary education, according to the Organization for Economic Cooperation and Development’s (OECD) annual report of education indicators, well above the global average of $10,759. However, spending is on the decline - down 4% between 2010 to 2014 even as education spending, on average, rose 5% per student across the 35 countries in the OECD.

Comparatively, students in countries like Singapore consistently outperform their U.S. counterparts in subjects like math, reading, and science. The average student in Singapore is 3.5 years ahead of her US counterpart in maths, 1.5 years ahead in reading and 2.5 in science. This raises questions about the effectiveness of resource allocation and the presence of systemic issues within the U.S. education system.

Income inequality plays a significant role in the US’s education outcomes, with the country lagging behind others in its ability to support lower-income students. The OECD’s figures show that income inequality plays a huge part in dragging down the US’s scores and that America lags behind other countries in its ability to help lower-income students. Addressing poverty and providing adequate support for low-income families are crucial for improving mathematics scores.

Systemic Issues in the U.S. Education Model

Marc Tucker, the president of the National Center on Education and the Economy (NCEE), argues that the U.S. school system, developed on a “factory model,” is facing challenges. Teachers, who were originally mainly female graduates with few other options in the workplace. The US still treats its teachers as if that were the case while the world’s most successful school systems have become “professional” and treat the recruitment and development of highly qualified teachers as integral to their education system. The US “got lucky” in a world where college-educated women had few other options. Now those options are opening up and people who could have made great teachers are choosing other options.

In the US, teachers earn on average 68% of what other university-educated workers make. To improve the system, Tucker suggests attracting and retaining highly educated teachers by offering better compensation.

Lessons from Top-Performing Countries

Examining countries with strong education systems can provide valuable insights for the U.S.

Canada

Canada, particularly Ontario, consistently outperforms the U.S. in education. Ontario, which educates 40% of Canada’s students, nearly 30% of the province’s population are immigrants. According to the 2015 Pisa exam results, Ontario scored fifth in the world in reading. Children of immigrants perform compatibly with their peers with Canadian-born parents in educational achievement. Teacher training has been revamped to improve quality, and there is a national focus on personalized learning and high standards.

Singapore

Fifty years ago the majority of Singapore’s population was illiterate; today it is held up as one of the models for education around the world. The island nation, population just 5.6 million, consistently tops world rankings for education. Education is highly centralized, and becoming a teacher is extremely competitive, with candidates recruited from the top third of secondary school graduates. Teachers spend a significant amount of time on research, lesson planning, and collaboration.

Finland

Getting into a teacher training course in Finland is tough. Acceptance rates for the University of Helsinki’s teacher education program (6.8%) were lower than its law program (8.3%) and medical school (7.3%) in 2016. The Finns are committed to keeping their edge in education. Every four years, the government re-evaluates its education plan in order to adapt it to the changing needs of the country.

Germany

In 2000 Germany suffered “Pisa shock”. The OECD found German students were below average on core subjects and that the less well-off were suffering far higher rates of educational failure. The report sparked a national debate and government action. New academic standards were brought in, national tests were instituted and more funding went to early learning and immigrant families. The country has implemented new academic standards, national tests, and increased funding for early learning and immigrant families.

South Korea

When Japanese occupation of Korea ended in 1945, it took its teachers with it. Only Japanese nationals had been allowed to teach and attend its secondary schools and higher education institutions and some 80% of the population was illiterate. Today South Korea has one of the world’s best-educated populations: in 2015, 69% of 25- to 34-year-olds had completed post-secondary education, the highest rate among all the OECD countries. Teaching is a popular profession, and teachers are well-paid and highly qualified, with clear career paths.

Education Funding: A State-Level Analysis

Education Law Center’s Making the Grade is an annual overview of the condition of school finance in the states. The current report presents a picture of school funding in the 2021-2022 school year, the most recent data available. Funding levels vary greatly across the country with the five highest funded states spending over $5,000 per pupil more than the national average ($16,645), and the five lowest funded states spending over $4,000 per pupil less. More than half of states had at least a modestly progressive distribution of state and local funding, with 28 of the 48 evaluated states providing at least 5% additional funding to high-poverty districts. States are making vastly different levels of effort to fund education; effort is measured as state and local revenue for PK-12 education as a percentage of state GDP. In the highest effort state (Vermont), education revenue is 5.5% of GDP while in the lowest effort state (Arizona) it is just 2.05%. Schools in many of the highest effort states benefit from a double advantage - high effort on top of high fiscal capacity. Schools in many of the lowest effort states suffer from a double disadvantage - low effort on top of low capacity.

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The report highlights significant disparities in per-pupil funding across states, with gaps remaining relatively consistent over time. After widening somewhat in the post-2008 Recession period, the gap between the most and least funded states has remained between $13,000 and $14,000 per pupil since 2012. While nominal per-pupil funding increased in most states between 2021 and 2022, only a few saw real increases after adjusting for inflation.

Fair Funding and Equitable Distribution

Fair funding requires both sufficient funding levels for all students and increased funding for high-poverty districts. A fair, equitable, and adequate school funding formula is the basic building block of a well-resourced and academically successful school system for all students. A strong funding foundation is even more critical for low-income students, students of color, English learners, students with disabilities, and students facing homelessness, trauma, and other challenges. These students, and the schools that serve them, need additional staff, programs, and supports to put them on the same footing as their peers.

In 2022, 28 states had at least a modestly progressive funding distribution, providing high-poverty districts with at least 5% more funding than low-poverty districts. Nine states had a flat distribution, and 11 states were regressive where high-poverty districts received at least 5% less funding than low-poverty districts. There has been progress towards more equitably distributed funding, with several states shifting from flat to progressive distributions.

Historical Trends in Education Financing

Early Expansion of Education

The advancement of the idea to provide education for more and more children only began in the mid-19th century, when most of today’s industrialized countries started expanding primary education, mainly through public finances and government intervention. Data from this early period shows that government funds to finance the expansion of education came from a number of different sources, but taxes at the local level played a crucial role.

In the US, states and localities have historically been the main sources of funding for public primary education. Disaggregated data reveals that the largest part comes from property taxes. This decentralized system can create inequalities, as affluent urban areas can raise more funding from local revenues.

In France, the expansion of public education initially relied on local government resources, but the fiscal burden was later shifted to the national level. This transition was associated with a sharp jump towards universal access and a reduction in regional inequalities.

Global Expansion in the 20th Century

The second half of the 20th century marked the beginning of education expansion as a global phenomenon. By 1990 government spending on education as a share of national income in many developing countries was already close to the average observed in developed countries.

This global expansion resulted in a historical reduction in education inequality across the globe. Recent estimates suggest that further reductions in schooling inequality are still to be expected within developing countries.

Current Trends in Global Education Financing

Recent cross-country data from UNESCO indicates that the world is expanding government funding for education today, and these additional public funds for education are not necessarily at the expense of other government sectors. However, there is substantial cross-country heterogeneity. In high-income countries, households shoulder a larger share of education expenditures at higher education levels than at lower levels - but in low-income countries, this is not the case.

Development assistance for education has stopped growing since 2010, with notable aggregate reductions in flows going to primary education. These changes in the prioritization of development assistance for education across levels and regions can have potentially large distributional effects, particularly within low-income countries that depend substantially on this source of funding for basic education.

The Importance of Inputs and Policy

National expenditure on education does not fully explain cross-country differences in learning outcomes. The output achieved depends crucially on the mix of many inputs. Learning outcomes may be more sensitive to improvements in the quality of teachers than to improvements in class sizes. Interventions that increase the benefits of attending school and incentivize academic effort are likely to improve learning outcomes.

Historical perspective on financing educationWhen did the provision of education first become a public policy priority?Governments around the world are nowadays widely perceived to be responsible for ensuring the provision of accessible quality education. This is a recent social achievement.

Education Spending in D.C.

Department of Education appropriated $1.889 billion for K-12 and postsecondary education in D.C. K-12 education spending in D.C. New Hampshire spends the second-most per K-12 pupil on school administration ($794), which represents less than half (46.5%) of what D.C. Current spending at D.C. Per pupil, D.C. At the postsecondary level, D.C. 40.00% of D.C. Funding for D.C.

OECD Indicators

The OECD uses indicators to compare countries’ expenditures on education. These indicators include expenditures on public and private education institutions per full-time-equivalent (FTE) student and total government and private expenditures on education institutions as a percentage of gross domestic product (GDP).

Expenditures per FTE student at the elementary/secondary level varied across OECD countries in 2019, ranging from $3,000 in Mexico to $25,600 in Luxembourg. The United States spent $15,500 per FTE student at the elementary/secondary level, which was 38 percent higher than the average of OECD countries reporting data ($11,300).

GDP per capita is positively associated with education expenditures per FTE student at both the elementary/secondary and postsecondary levels. Among the 36 OECD countries reporting data in 2019, the average total expenditures on education institutions constituted 4.9 percent of GDP.

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