Government expenditure in educational institutions as % of GDP

Definition

Total general (local, regional and central) government expenditure in educational institutions (current and capital), expressed as a percentage of GDP. It excludes transfers to private entities such as subsidies to households and students, but includes expenditure funded by transfers from international sources to government.

Calculation method

Divide total expenditure in public institutions of a given level of education (ex. primary, secondary, or all levels combined) by the GDP, and multiply by 100.

Data source

Data on education expenditure is received by country governments responding to UIS's annual survey on formal education. The data used to fill the questionnaire on education expenditure may come from annual financial reports by the Ministry of Finance and/or the Ministry of Education, and/or national accounts reports by the National Statistical Office. GDP data comes from the World Bank and is updated three times a year.

Interpretation

A higher percentage of GDP spent on educational institutions shows a higher government priority for education, but also a higher capacity of the government to raise revenues for public spending, in relation to the size of the country's economy. When interpreting this indicator however, one should keep in mind that in some countries, the private sector and/or households may fund a higher proportion of total funding for education, thus making government expenditure appear lower than in other countries. One should also keep in mind that this indicator excludes transfers to private entities, such as financial aid to students.

Limitations

In some instances data on total public expenditure on education refers only to the Ministry of Education, excluding other ministries which may also spend a part of their budget on educational activities.

Purpose

To show the proportion of a country’s wealth generated during a given year that has been spent by government authorities on educational institutions. This indicator is useful to compare education expenditure between countries and/or over time in relation to the size of their economy.

Types of disaggregation

By level of education.