The Cost of Providing Universal Secondary Education in Developing Countries

1
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

2
Enrollment data

• Gross Enrollment Rate (GER) provided by 90 of
  countries in sample
• Net Enrollment Rate (NER) provided by 2/3 of
  countries in sample

3
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

4
Secondary NER in 2000 2005
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.
5
Cost of Enrollment Expansion

• UNIT COST METHOD
• Determine number of new students to be enrolled
• Determine cost per student (the unit cost)
• Multiply Unit Cost times the number of new
  students

6
Unit Cost Estimates

• Supply Side
• schools
• teachers
• books
• labs
• Demand Side
• opportunity costs

7
Supply side costs

• Total secondary schooling spending divided by
  number of students
• Total public secondary school spending

8
Supply side costs, continued

• Number of students

9
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
  lower-secondary costs by 10.
• Costs will be under-estimated if most of the
  expansion needs to occur at the upper level.

10
Caveats, continued

• The Unit Cost calculation of public spending
  included private school students in the
  denominator, but public spending only in the
  numerator.
• Costs may be under-estimated by around 7.5 based
  on 70 countries that provide separate enrollment
  figures for private school students.

11
Costs in Constant 2002 US Dollars
All subsequent costs in constant 2002 US dollars.
12
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.

13
How Many Children?

• Children to be enrolled
• School age students

14
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

15
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

16
All at once estimates

• Unit costs for all new spaces198
• 198 X 312,832 million 61.9 billion
• Unit costs for existing spaces172
• 172 X 254,213 43.7 billion

17
Average annual costs over 25 years for achieving
achieving 90 NER
18
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.

19
Annual burden over 25 years High cost scenario
Spending expressed in billions of US dollars.
20
Annual burden over 25 years Low cost scenario
Spending expressed in billions of US dollars.