Education in States and Nations: 1991

(ESN) Indicator 31: Current public expenditure on education as a percentage of total public expenditure

The percentage of total public expenditure that is devoted to education can be viewed as a rough indicator of the relative importance accorded to education among a nation's or state's public sector activities. It should be noted, however, that variations in the educational share of total public spending also reflect differences among nations and states in the division of responsibility for financing education or other activities between the public and private sectors. A high relative share on this measure may reflect generous public funding of education, restraint on the size of the public sector in areas other than education, or both. Conversely, a low relative share on this measure may reflect a large role for private financing in education, a large public sector in areas other than education, or some of both.

• In 1991, the share of total public expenditure devoted to current education spending was 12.2 percent in the United States. This share was close to Canada's share (12.6 percent) and just below Finland's share (13.2 percent), the largest share among the 14 nations represented here. The U.S. share exceeded that of the remaining G-7 countries which had comparable data (Japan, France, Italy, and West Germany).

• Seven of the 13 countries represented here spent less than 10 percent of their total public expenditure on education; only 7 of the U.S. states had shares that low. Conversely, only 3 countries (including the United States) spent more than 12 percent of total public expenditure on education, whereas 27 states spent this much.

• The United States and Finland spent the highest share of total public expenditure on primary through secondary education (9.1 percent). Whereas only 3 out of 13 other nations spent at least 8 percent of total public expenditure on primary through secondary education, 43 U.S. states had shares that high.

Notes on interpretation:

This measure of the share of public expenditure for education has the advantage that it does not require conversion of national currencies into U.S. dollars. However, fiscal effort measures, such as this one, convey little information about the absolute quantity of resources that a country devotes to each student's education. This measure can also be heavily influenced by the proportion of the population of school age and in school. Indicator 33 represents an attempt to control for this problem.

At the higher education level, countries or states that require students to pay school fees or to pay their own living expenses are likely to devote smaller percentages of public expenditure to higher education than countries that provide "free" higher education or subsidize student living expenses with public funds. In some countries, particularly the United States and Japan, a large portion of expenditure on higher education comes from private sources. See the supplemental note to Indicators 30-33 and the supplemental note to Indicator 34 for data on private higher education expenditure in certain countries.

To some degree, one might expect education expenditure to comprise a larger proportion of a U.S. state's public expenditure than of a country's public expenditure. This is because national governments assume some expenditure burdens, such as those of national defense, diplomacy, and macroeconomic control, that state governments ordinarily do not.

Direct Federal government spending is not included in state expenditures. Only "own source" revenues or Federal government funds that flow through state governments are included for the U.S. states.

Table 30b

Figure 31