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EDUCATION INDICATORS: An International Perspective


Indicator 41: Current Public Expenditure on Education as a Percentage of Total Public Expenditure

Private spending plays a role in education financing /*

Indicators 41, 42, and 43 provide measures of public investment in education. However, measures of public investment do not give a complete picture of a country's financial investment in education since many countries have a substantial private investment as well. Though the amount of private expenditure on public and private schools is negligible in some countries, it can account for 20 percent or more of total educational spending in such countries as Germany, Japan, Spain, and the United States. Expenditure from private sources is especially important at the higher education level, where it makes up more than 40 percent of the total educational expenditure in the United States, over 55 percent in Japan, and around 20 percent in Spain and Australia.

Private spending on education takes several different forms: student tuition or fees; direct or in-kind contributions; and direct private provision of education. The following paragraphs describe these methods of private spending on education.

The greatest amount of private spending occurs at the higher education level, and student tuition and fees account for most of the private spending on education at this level in such countries as the United States, Japan, and Spain. Generally, though, one finds some private spending on education in most countries even in public elementary and secondary schools. Families may pay for their children's school supplies and textbooks, for example. Moreover, public provision of transportation and meals at school is less common in other countries than it is in the United States.

Direct financial contributions to schools occur more frequently at private than at public schools and more frequently at the higher education level. Private universities in the United States receive over 10 percent of their revenue in the form of private gifts and contributions to their endowment funds. Private elementary and secondary schools in the United States also receive direct financial support from corporations, associations, and religious denominations. Private elementary and secondary schools in the United States and other countries may also receive "in-kind" contributions of building space, equipment, and supplies from the religious denominations or social and cultural organizations that sponsor them.

In some countries, moreover, private groups are direct providers of education. In the German and Austrian "dual systems," for example, high school students who choose the vocational track generally spend most of each school week inside businesses or factories where they receive instruction in a trade from employees of the company practicing that trade. This instruction typically takes place in a classroom at the worksite, with the workplace used for demonstration of work practices and for direct employment of the students after they have learned enough of the trade to be employable. Firms participating in these "youth apprenticeship" programs typically receive a tax deduction, but no direct public support. Youth apprenticeship Youth apprenticeship programs like these, where students spend part of each school week in school and the other part at a worksite, are gaining in popularity in the United States, but remain uncommon.

In some countries, private funding of education is even more important on the "fringes" of the traditional education system. Japanese jukus, for instance, have made "after-hours" supplemental instruction famous (but one can find the equivalent even in the United States in private firms' training courses for college-entry exams). Countries vary widely in their public support of early childhood education, too. Some, such as France and the Scandinavian countries, provide it largely through public programs, while others, such as the United States, Germany, Spain, and Canada, mostly leave its provision to the private sector. Countries also vary widely in their public support of non-degree-granting, occupationally specific trade and vocational schools those that we refer to in the United States as "proprietary" schools.

It is very likely that the private share of education is generally underestimated, however. Two factors account for this underestimation. First, education on the "fringes" (in private nursery, after-hours, or proprietary schools), generally transpires outside the jurisdiction of government education authorities and their data collectors. Therefore, much private education financing simply remains uncounted. Second, some countries do not collect education finance data even from regular private elementary and secondary schools. In the United States, for example, one measure of the independence private elementary and secondary schools enjoy is the relative freedom from state data collection requirements. participating in these "youth apprenticeship" programs typically receive a tax deduction, but no direct public support. Youth apprenticeship programs like these, where students spend part of each school week in school and the other part at a worksite, are gaining in popularity in the United States, but remain uncommon.

In some countries, private funding of education is even more important on the "fringes" of the traditional education system. Japanese jukus, for instance, have made "after-hours" supplemental instruction famous (but one can find the equivalent even in the United States in private firms' training courses for college-entry exams). Countries vary widely in their public support of early childhood education, too. Some, such as France and the Scandinavian countries, provide it largely through public programs, while others, such as the United States, Germany, Spain, and Canada, mostly leave its provision to the private sector. Countries also vary widely in their public support of non-degree-granting, occupationally specific trade and vocational schoolsthose that we refer to in the United States as "proprietary" schools.

It is very likely that the private share of education is generally underestimated, however. Two factors account for this underestimation. First, education on the "fringes" (in private nursery, after-hours, or proprietary schools), generally transpires outside the jurisdiction of government education authorities and their data collectors. Therefore, much private education financing simply remains uncounted. Second, some countries do not collect education finance data even from regular private elementary and secondary schools. In the United States, for example, one measure of the independence private elementary and secondary schools enjoy is the relative freedom from state data collection requirements.

Footnote

*/ The primary sources for this sidebar include: S.M. Barro, Preliminary findings from the expenditure comparability studyWashington, D.C.: SMB Economic Research, Inc., 1993); OECD, Education at a Glance (Paris: OECD, 1993); and J. Sherman, Report on international comparisons of school expenditures (Washington, D.C.: Pelavin Associates, Inc., 1992).



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