Indicator 15. Annual Expenditures for Education

In 2007, the United States ranked the highest among the G-8 countries interms of expenditures per student at the combined primary and secondary education levels as well as at the higher education level.

In this indicator, two measures are used to compare countries’ investment in education: (1) annual public and private educa- tion expenditures per student (expressed in absolute terms); and (2) annual public and private education expenditures as a percentage of gross domestic product (GDP). The latter measure allows a comparison of countries’ expenditures relative to their overall economic output.

In 2007, the expenditures per student in the United States were about $10,800 at the combined primary and secondary education levels17 and about $27,000 at the higher education level (figure 15-1). Both figures were higher than the per student expenditures in all other G-8 countries, which ranged from about $4,900 in the Russian Federation to $8,600 in the United Kingdom at the combined primary and secondary levels and from about $5,400 in the Russian Federation to $20,300 in Canada at the higher education level.

In 2007, all G-8 countries spent more at the combined primary and secondary education levels than at the higher education level, where the student enrollment is lower (figure 15-2). The United Kingdom spent 4.2 percent of GDP on primary and secondary education, higher than the percentage of GDP spent at this level in all other G-8 countries. The United States spent the second highest percentage of GDP at this level (4.0 percent), followed by France (3.9 percent), while Japan spent the lowest percentage (2.8 percent). At the higher education level, the United States spent 3.1 percent of GDP. This was higher than the percentage of GDP spent at this level in all other G-8 countries, ranging from 0.9 percent in Italy to 2.6 percent in Canada.

Overall (i.e., primary, secondary, and higher education together), the United States spent a higher percentage of GDP on education (7.1 percent) than all other G-8 countries, followed by Canada (6.1 percent), while Italy spent the lowest percentage (4.0 percent), followed by Germany (4.1 percent).

Definitions and Methodology

Expenditures per student (see figure 15-1) are collected by type of institution, while expenditures as a percentage of gross domestic product (GDP) (see figure 15-2) are collected by source of funds. Since the two sources are not the same, the totals can differ in some countries. Per student expenditures are based on public and private full-time-equivalent (FTE) enrollment figures for the 2006–07 school year and current expenditures and capital outlays from both public and private sources, where data are available. Data for GDP per capita are for calendar year 2007. Dollar figures for education expenditures and GDP per capita were converted to U.S. equivalent dollars using purchasing power parities (PPPs), which equalize the purchasing power of different currencies. Using PPPs to convert all education expenditures data to U.S. equivalent dollars allows for cost-of-living differences across countries to be taken into account. Within-country consumer price indices are used to adjust the PPP indices to account for inflation because the fiscal year has a different starting date in different countries.

The national averages shown here do not represent the within-country variation that may exist in the annual education expenditures per student.

As shown in the figures, education levels are defined according to the 1997 International Standard Classification of Education (ISCED97). For more information on the ISCED97 levels, see appendix A.