Transcript Hispanic Students and the NM Lottery Scholarship

The Cost of Providing Universal
Secondary Education in Developing
Countries
Council on Foreign Relations
December 18, 2007
Melissa Binder
Department of Economics
University of New Mexico
Enrollment data
 Gross Enrollment Rate (GER) provided by 90% of
countries in sample
GER 
All Students
SchoolAgePopulation
 Net Enrollment Rate (NER) provided by 2/3 of
countries
in sample

NER 

SchoolAgeStudents
SchoolAgePopulation
Use with care
 NER determines how many children need to be
enrolled. So the need to impute NER for 37
countries introduces a large degree of uncertainty
into estimates.
 Includes China and India, which account for 41% of the
total population of children 12-17 years of age in
developing countries
 At least some data needed to calculate costs
were imputed for 75 countries
 These countries together account for 31% of the total
population of children 12-17 in developing countries
Secondary NER in 2000 & 2005
100
75
2000
2005
50
25
0
Sub-Saharan
Africa
South Asia
East Asia &
Pacific
Middle East &
North Africa
Latin America
& Caribbean
Europe &
Central Asia
2000 figures are country averages that include imputed values.
2005 figures are from World Development Indicators (accessed 12-14-07). No data are available for South Asia in this series.
Cost of Enrollment Expansion
 UNIT COST METHOD
 Determine number of new students to be
enrolled
 Determine cost per student (the unit cost)
TotalExpenditureonSecondarySchool
Numberof StudentsinSecondarySchool
 Multiply Unit Cost times the number of new
students

Unit Cost Estimates
 Supply Side




schools
teachers
books
labs
 Demand Side
 opportunity costs
Supply side costs
 Total secondary schooling spending
divided by number of students
 Total public secondary school spending=
PublicSpendingonEducation SpendingonSecondary
GDP

GDP
PublicSpendingonEducation
Supply side costs, continued
 Number of students
GER School AgePopulation
Caveats
 Unit costs combine capital and recurring costs
 Costs will be over-estimated high if country recently built
many new schools
 Costs will be under-estimated if expansion requires new
schools
 Expenditure data combine lower and upper
secondary levels.
 Typically, upper-secondary costs exceed lowersecondary costs by 10%.
 Costs will be under-estimated if most of the expansion
needs to occur at the upper level.
Caveats, continued
 The Unit Cost calculation of public
spending included private school students
in the denominator, but public spending
only in the numerator.
TotalExpenditureonSecondarySchool
Numberof StudentsinSecondarySchool
 Costs may be under-estimated by around 7.5%
based on 70 countries that provide separate
 enrollment figures for private school students.
Costs in Constant 2002 US Dollars
SubSaharan
Africa
South
Asia
East Asia
& Pacific
Middle
East &
North
Africa
Low
Income
$128
$86
$136
$249
$122
$125
$125
LowerMiddle
Income
417
82
382
369
325
307
227
UpperMiddle
Income
820
1417
2180
919
1157
912
All
202
336
917
561
524
240
85
All subsequent costs in constant 2002 US dollars.
Latin
Europe &
America & Central
All
Caribbean
Asia
(weighted)
Are current costs the right costs?
 Unit costs were about the same in
countries with high and low NERs, relative
to income.
 Unit costs were about the same in
countries that scored higher and lower than
predicted by income, in a sub-sample of
countries that participated in international
testing.
How Many Children?
 Children to be enrolled=
Population of school age children School age students
 School age students =

NERPopulation of school age children
How Many Children? continued
 Many current students are older than
school-age due to high repetition rates
 Number of needed spaces would be much
lower if repetition rates were reduced
 Needed spaces=
Populationof schoolagechildren
GERPopulationof schoolagechildren
How Many Children, continued
 To increase NER to 90% by creating new
spaces
 312,832 million children
 To increase NER to 90% using existing spaces
(by reducing repetition to 7%)
 254,213 million children
All at once estimates
 Unit costs for all new spaces=$198
 $198 X 312,832 million = $61.9 billion
 Unit costs for existing spaces=$172
 $172 X 254,213 = $43.7 billion
Average annual costs over 25 years for
achieving achieving 90% NER
90% NER in 15
years
90% NER in 25
years
Repetition
unchanged
Repetition
reduced to 7%
$44.6 b
$29.4 b
$28.2 b
$24.3 b
Basis for apportioning costs
 Countries pay median GDP share on
education among those with NER higher
than predicted by income.
 Foreign aid picks up the rest.
Annual burden over 25 years:
High cost scenario
SCENARIO: 15 Years to Universal Secondary
Enrollment, No Change in Retition Rates
LowIncome
LowerMiddle
Income
UpperMiddle
Income
TOTAL
As Factor
of
Foreign
Present
As Factor Aid After Spending
of
Min GDP
After
Present
Share
Foreign
Spending
Met
Aid
Present
Spending
Additional
Spending
Needed
$15.3
$20.3
3.2
$16.9
0.2
$35.9
$10.9
0.25
$5.3
<.01
$41.8
$13.4
0.05
$8.9
<.01
$93.0
$44.6
Spending expressed in billions of US dollars.
$31.1
Annual burden over 25 years:
Low cost scenario
SCENARIO: 25 Years to Universal Secondary
Enrollment, Reptition Reduced to 7 %
LowIncome
LowerMiddle
Income
UpperMiddle
Income
TOTAL
As Factor
of
Foreign
Present
As Factor Aid After Spending
of
Min GDP
After
Present
Share
Foreign
Spending
Met
Aid
Present
Spending
Additional
Spending
Needed
$15.3
$13.2
2.2
$10.5
0.14
$35.9
$5.4
0.07
$2.7
<.01
$41.8
$5.7
<.01
$3.8
<.01
$93.0
$24.3
Spending expressed in billions of US dollars.
$17.0