Education in States and Nations: 1991

(ESN) Indicator 36: Sources of funds for primary and secondary education

This indicator traces the path of education expenditures back to their origin among the levels of government and between public and private sources. Tracking funds for primary and secondary education to their initial source illuminates where responsibility is actually assumed in a nation or state for financing primary and secondary education. The initial source of money for education often differs from the ultimate spender. For example, though local school districts in the United States generally operate and fund the local public schools, much of the financing arrives in the form of transfers from State governments. Some of the state money, in turn, arrives in the form of transfers from the Federal government. The initial sources of those transferred funds, then, are State and Federal governments. Likewise, the initial source of funds spent on public schools can be either public or private. Student tuition and fees are one example of a private source of public expenditure. Funding by private firms of public school youth apprenticeship programs in Germany and Austria is another example. Moreover, the initial source of funds spent on private schools can be either public or private. Unlike the United States, most other OECD countries maintain large numbers of privately-operated schools that are mostly or entirely publicly funded.

• Among the 10 other countries reporting data by level of government, only Denmark raised a larger proportion of public funds for expenditure on primary and secondary education at the local level (56 percent) than did the United States (45 percent) in 1991. All of the 10 other countries raised a larger proportion of education expenditure at the national (i.e., central or federal) level than did the United States (7 percent). Of the three G 7 countries reporting data by level of government, the United States raised the smallest proportion at the national level and the largest proportion at the local level. Canada and Japan also raised a larger proportion of education expenditure at the regional or state level (67 and 75 percent, respectively) than did the United States (48 percent).

• Of the 10 other countries reporting public expenditure data by level of government, only Canada raised less money for education at the national level (11 percent) than did Mississippi (17 percent), the U.S. state that relied the most on the Federal government for education funds.

Note on interpretation:

Data are available by initial source of funds for both public and private schools across most OECD countries, as presented in Table 36a. For U.S. states, however, data are available by initial source of funds for public schools only. Whereas public funds can account for substantial proportions of private school expenditures in some OECD countries, private schools in the United States receive a very small proportion of their funding from public sources.

Table 35d

Figure 36