Educational expenditure indicators help to show what, how and where financial resources are directed to education. Every year, governments, private companies, students and their families make decisions about the financial resources invested in education. These investments are made with the well-established idea that expenditure on education enhances labour productivity by improving the skills of the workforce (Mallick, Das and Pradhan, 2016[1]) which might affect economic growth and social development. Therefore, analysing various aspects of educational finance helps clarify the efforts made by countries in education as well as its possible impact on future national economic and social perspectives. In addition, the search for effective financial policies in education requires evaluating educational expenditure of a country’s education system in light of other countries.

Annual expenditure per student on primary to tertiary educational institutions provides an assessment of the investment made in each student. In 2019, the average annual spending per student from primary to tertiary education in OECD countries as a whole was around USD 12 000. But this average masks a broad range of spending across OECD countries. Annual spending per student at these levels ranged from around USD 3 600 in Mexico to around USD 17 500 in Austria and Norway, around USD 19 500 in the United States and over USD 25 400 in Luxembourg (). The drivers of expenditure per student vary across countries and by level of education: in Luxembourg, for example high teachers’ salaries at primary and secondary levels (see Indicator D3) are reflected in high levels of expenditure per student. In contrast, Colombia has one of the highest ratios of students to teaching staff (see Indicator D8 and Education at a Glance Database), which tends to drive costs down (OECD, 2021[1]).

All OECD countries devote a substantial share of national output to educational institutions. In 2019, OECD countries spent on average of 4.9% of their GDP on educational institutions from primary to tertiary levels ().

The largest share of funding on primary to tertiary educational institutions in OECD countries comes from public sources, although private funding at the tertiary level is substantial. Within this overall OECD average, however, the share of public, private and international funding varies widely across countries. In 2019, on average across OECD countries, 83% of the funding for primary to tertiary educational institutions came directly from public sources and 16% from private sources (). However, in Finland, Iceland, Luxembourg, Norway and Sweden, private sources contribute to less than 5% of expenditure on educational institutions. In contrast, they make up around one-third of educational expenditure in Australia, Chile, Colombia, the United Kingdom and the United States. International sources provide a very small share of total expenditure on educational institutions. On average across OECD countries, they account for 1% of total expenditure, reaching 5% in Estonia ().

In 2019, total public expenditure on primary to tertiary education as a percentage of total government expenditure for all services averaged 10.6% in OECD countries. However, this share varies across OECD and partner countries, ranging from around 7% in Greece, Hungary and Italy to over 17% in Chile ( and ).

Entering tertiary education often means costs for students and their families, in terms of tuition fees, foregone earnings and living expenses, although they may also receive financial support to help them afford it. Most national students entering tertiary programmes enrol at bachelor’s or equivalent level in OECD countries (see Indicators B1 and B4). Public institutions do not charge tuition fees to national students at this level in one-quarter of countries with data, including Denmark, Estonia (only for programmes taught in Estonian), Finland, Norway, Sweden and Türkiye (). In a similar number of countries, tuition fees are low or moderate, with an average cost for students of under USD 3 000. In the remaining countries, tuition fees are high or very high and range from about USD 4 000 to over USD 8 000 per year. They exceed USD 12 000 in England (United Kingdom), where there are no public institutions at tertiary level and all students enrol in government-dependent private institutions ().

Expenditure on education is composed of current and capital expenditure. Current expenditure includes staff compensation and spending on the goods and services needed each year to operate schools and universities, while capital expenditure refers to spending on the acquisition or maintenance of assets which last longer than one year (see Definitions section). Differences in current and capital expenditure allocation across countries reflect the degree to which countries have invested in the construction of new buildings – for example as a response to increases in enrolment – or in the restoration of existing school premises, due to obsolescence and ageing of existing structures, or the need to adapt to new educational, societal or safety needs. Unlike current expenditure, capital expenditure can show large fluctuations over time, with peaks in years when investment plans are implemented, followed by years of troughs.