Education in States and Nations: 1991

(ESN) Indicators 30, 31, 32, and 33: Note on current public expenditure as a percentage of GDP/GSP, current public education expenditure as a percentage of all public expenditure, current public education expenditure per student, and current public education expenditure per student relative to GDP/GSP per capita

Notes on Figures and Tables

All countries

Gross domestic product is gross national product less net property income from abroad.

Purchasing power parity indices (PPPI) were used to convert other currencies to U.S. dollars for the expenditure per student indicator. Because the fiscal year has a different starting date in different countries, within-country Consumer Price Indexes (CPI) were used to adjust the PPPIs to account for inflation.

Australia

Expenditure for higher education includes expenditure for vocational secondary education, which is taught in institutions of higher education.

Includes contributions to the pension funds of teachers who are civil servants.

Breakdowns of expenditure by initial source of funds for primary and secondary education are estimates only.

Fiscal year runs from July 1990 to June 1991.

Canada

Canada did not report separate figures for expenditures on preprimary education; preprimary expenditures are included in the primary-secondary expenditure figures. If one were to apportion Canada's expenditures across the preprimary and primary-secondary levels of education based on their relative enrollments, 4.8 percent of Canada's primary-secondary expenditures would move to the preprimary level. This change would not be enough to change Canada's relative ranking vis-a-vis the other G-7 countries on Indicators 30 and 31.

Preprimary enrollments are included in the calculation of Canada's expenditure-per-student figures for Indicators 30 and 33, however.

Canada, Japan, United Kingdom

Calculated figures from OECD, National Accounts; 3/4 (1990) + 1/4 (1991).

Finland

The public/private expenditure ratio that is reported for "all levels" is applied to both the primary-secondary and higher education levels.

France

The proportion of current expenditure that is public (and not private) is estimated using a public/private ratio in expenditure data from 1992.

Germany (West)

Data for 1991 are provisional estimates based on 1990 figures.

The proportion of public expenditure that is current (and not capital) is estimated from the current/capital ratio for total expenditures.

Hungary

The proportion of public expenditure that is current (and not capital) is estimated from the current/capital ratio for total expenditures.

Italy

1989 data.

Netherlands

Data for 1991 are partly provisional estimates based on 1990 figures.

Spain

Public expenditure for education is underestimated because a large part of the pension costs are not included.

Expenditures from private sources refer only to expenditure by households.

Sweden, United States

Calculated figures from OECD, National Accounts; 1/2 (1990) + 1/2 (1991).

United Kingdom

Excludes expenditure on nursing and paramedical education.

The proportion of current expenditure that is public (and not private) is estimated using a public/private ratio in expenditure data from 1992.

United States

For Indicators 30 and 33 -- Due to the presence in the District of Columbia workforce of many who reside in the suburbs outside the District, the gross product of the District is abnormally large relative to its residential population. It is the size of its residential population however, that more directly determines its educational expenditure.

For Indicator 31 -- only expenditures of state and local governments are used in the calculation of the state-level figures. This has the effect of excluding a portion of actual public spending -- that emanating directly from the Federal government -- in the state-level figures, but not in the U.S. national figure. Calculating the measure this way allows for more valid comparisons of "fiscal education effort" across states. But one should not expect the U.S. national figure to be a weighted average of the state figures. U.S. national public expenditure includes large sums for national defense, social security, and health insurance for the aged that one will not find in states' direct expenditure figures.

Current public expenditures on preprimary through secondary education do not include public funds used for private schools. These, however, are quite small in the United States.

Enrollment figures used for the per-student expenditure calculations differ between the United States as a whole and the individual states. The U.S. figure, submitted to the OECD is calculated from the U.S. Census Bureau's Current Population Survey (CPS) of October 1991, a household survey employing a national sample of households. The state data come from the , Integrated Postsecondary Education Data System, an institutional survey including the universe of U.S. higher education institutions. The NCES full-time equivalent enrollments for the U.S. as a whole differ from the CPS-derived enrollments only slightly.

Technical Notes

Calculation of GDPs and GSPs

The OECD source document listed 1991 country GDPs in 1985 U.S. dollars. The BEA source document listed 1990 state GSPs in 1990 U.S. dollars. The 1991 country GDPs, then, were converted to 1990 U.S. price levels using implicit price deflators for gross domestic product in 1985 and 1990 in the Economic Report of the President, January, 1993. 1991 state GSPs were estimated from the 1990 GSPs per capita multiplied by the 1991 state populations.

Non-inclusion of proprietary schools

In the United States and some other countries exist a group of educational institutions that operate for profit, offering focussed educational programs that lead to specific vocational certificates, usually in periods of less than two years. These institutions are excluded from education data for the United States, and for some other countries as well.

Calculation of full-time equivalent enrollments

See technical notes for Indicator 8.

Methodology used for adjusting inflation rates

Although most countries report education expenditure for the calendar year (CY) 1991, eight countries have provided figures for financial years starting in April, June, or other months of 1990. Because of price inflation, the expenditure figures of the latter countries are not strictly comparable to those of countries that report for January-December 1991. For example, if a country with a 6 percent annual inflation rate submits expenditure figures for the financial year July 1990 to June 1991, that country's outlays will be about 3 percent less, simply because of inflation over a six-month period, than if the same country had provided data for CY 1991. For this reason, it is important to adjust the figures of the countries that do not report by calendar year to correct for inflation. Such adjustments affect finance indicators 30, 31, 32, and 33. Finance Indicators 34, 36, and 37 are not affected because they consist of ratios in which the numerators and denominators already pertain to the same period.

Adjustment for Indicator 32

Indicator 32's expenditure per student is expressed in equivalent U.S. dollars, converted at PPPI rates. In cases where countries have reported expenditures for CY 1991, the calculation is simply [EXP/ENR]*PPPI(91) where EXP/ENR is expenditure per student in units of national currency and PPPI(91) is the PPPI exchange rate between 1991 units of national currency and 1991 U.S. dollars. In cases where countries' fiscal years begin in 1990, however, this formula has to be adjusted to reflect inflation between 1990 and 1991. The adjusted formula, reflected in the tables for Indicator 32, is

 = (EXP/ENR)/PPPI(adj)

where the adjusted PPPI rate, PPPIadj, is calculated as a weighted average of the PPPIs applicable to 1990 and 1991 according to the equation,

 PPPI(adj) = W90*[PPPI(90)/(1 + r(US)] + W91*[PPPI(91)].

In this expression, PPPI(90) is the PPPI exchange rate between 1990 units of national currency and 1990 US dollars, rUS is the U.S. inflation rate between 1990 and 1991, and W90 and W91 are the weights applicable to 1990 and 1991, based on the starting and ending months of the country's school year. For example, W90 = 0.75 and W91 = 0.25 for a country with a financial year April 1990 to March 1991, but W90 = 0.50 and W91 = 0.50 for a country with a financial year July 1990 to June 1991).

Adjustments for Indicators 30, 31, and 33

Indicators 30, 31, and 33 compare educational expenditures with variables that normally are reported for CY 1991 -- namely, GDP in the cases of 30 and 33 and total public expenditure for all purposes in the case of 31. To make the numerators and denominators of these indicators compatible, it is necessary to adjust the expenditure figures of countries that have not reported educational spending for the 1991 calendar year. The required adjustment is:

 EXP(adj) = EXP*(1 + inf)

where EXP and EXPadj are unadjusted and adjusted expenditures, respectively, and "inf" is the inflation rate for the number of months between the country's financial year and CY 1991. For example, if the country's fiscal year begins in July 1990, "inf" would be the inflation rate during a six-month period, or one-half the annual inflation rate between 1990 and 1991.

An exception to this procedure applies to two countries, Australia and New Zealand, for which national accounts data, including GDP and total public expenditure, are not reported by calendar year. For these two countries only, the educational expenditure figures have been adjusted to correspond to the year for which GDP is reported rather than to CY 1991.

Limitations to adjustments

Two limitations of these adjustment procedures should be recognized. First, the adjustments are for changes in the general (GDP) price level but not in the price level for education. No suitable PPPI figures are available that pertain specifically to education. Second, no allowance has been made for real growth in educational expenditure (increases in excess of inflation) that might have taken place during the 6-month or 9-month periods covered by the adjustments. It would only be possible to take real growth into account retroactively, after data for the 1991-92 financial year become available. Nevertheless, the adjustment for inflation does eliminate one significant source of non-comparability of expenditure figures, thereby enhancing the validity of the international comparisons of educational spending.


New scientists and engineers Supplemental Notes Distribution of current public expenditure...