Accounting for Public Expenditures on Education: An International
Panel Study
The paper "Accounting for Public Expenditures on Education: An International Panel Study" by
T. Paul Schultz is a study of the factors that influence public expenditure on education. The
study uses data from 47 countries over the period 1960-1985 to examine the relationship
between public expenditures on education and a variety of economic, political, and social
factors.
→ The study found that the level of economic development is a major determinant of public
expenditures on education.
→ Countries with higher levels of income tend to spend more on education. The study also
found that political factors, such as the level of democracy and the strength of the labor
unions, also play a role in determining public expenditures on education.
→ Countries with more democratic governments and stronger labor unions tend to spend
more on education.
→ Social factors, such as the level of inequality and the demand for education, also influence
public expenditures on education. Countries with higher levels of inequality tend to spend
less on education, while countries with higher demand for education tend to spend more.
→ The study's findings have important implications for the design of education policies. The
findings suggest that countries that want to increase public expenditures on education
should focus on economic development, political reform, and social change.
In addition to the factors mentioned above, the study also found that the following factors are
associated with higher public expenditures on education:
• The level of urbanization
• The proportion of the population that is literate
• The proportion of the population that is in the labor force
• The number of years of compulsory schooling
The study's findings are consistent with the findings of other studies on public expenditures on
education. The findings suggest that there is no single factor that can explain why some
countries spend more on education than others. Rather, a variety of factors, including
economic, political, and social factors, all play a role in determining public expenditures on
education.
The study's findings are also relevant to the current debate about the future of education. The
study suggests that countries that want to maintain or improve their educational systems will
need to focus on economic development, political reform, and social change. These are the
factors that will determine the level of public expenditure on education in the future.
Here are some of the key findings of the study:
❑ Economic development is a strong positive predictor of public spending on education.
❑ Political factors, such as the level of democracy and the presence of a military
dictatorship, have a significant impact on public spending on education.
❑ Social institutions, such as the strength of the labor unions and the level of religious
observance, also have a significant impact on public spending on education.
Here are some of the limitations of the study:
• The study uses a cross-sectional data set, which means that it cannot track changes in public
spending on education over time.
• The study does not control all the factors that could influence public spending on education,
such as the quality of education and the availability of private schools.
Despite these limitations, the study provides valuable insights into the factors that influence
public spending on education. The study's findings can be used by policy makers to develop
policies that promote increased public spending on education.
