The mechanics of progress in education : evidence from cross-country data

The authors explore differences in education in rich and poor countries by first systematically documenting the relationship between per capita GNP and various indicators of educational development. They then exploit a simple accounting identity relating the availability of resources to their expenditure, to clarify the sources of rich countries'advantage in education. Data for a sample for 125 countries in 1993 confirm the expected favorable relationship between per capita GNP and each of the following dimensions of educational development: a) The sector context (as reflected by the demographic burden on the education system, the government's fiscal capacity, and so on). b) The production of education services, including such factors as public spending on education and the composition of spending. c)Education outcomes, in terms of coverage and student learning. d) Efficiency of sector operations. e) Equity in access and distribution of public spending on education. One appealing explanation for why richer countries achieve better results is that they have more resources for their education systems. But bigger budget allocations to education contribute relatively little to differences in resources. Lighter demographic burdens in richer countries is also a relatively modest factor. By far the most important factor is the decline of teacher salaries relative to per capita GNP, which accounts for at least half of any educational advantage at all stages of economic development. The extra resources for education associated with income growth allows a country to expand enrollments and improve classroom conditions by reducing the pupil-teacher ratio. Early in income growth, countries allocate more of the extra resources to expand coverage; later they shift toward reducing the pupil-teacher ratio. But, contend the authors, so long as coverage is not yet universal a more efficient strategy for educational development is to emphasize continued expansion of coverage rather than a rapid reduction in the pupil-teacher ratio. In the long run, lower levels of educational attainment among tomorrow's adults is likely to diminish learning achievement among tomorrow's children.