2005 edition of Education at a Glance Under embargo until 13 September 2005, 11:00 Paris time

In the dark… …all schools and education systems look the same… But with a little light….

But with a little light…. …important differences become apparent….

Main headings r Strong educational investment Consistently rising investment in education High investment in pre-primary education, rapidly growing participation Strong and improving performance in primary education Above-average instructional hours and teacher salaries at school r Public/private cost-sharing in line with individual and social benefits Strong public investment in pre-primary education Growing private share in tertiary spending r Strong internal efficiency of higher education and high and growing labour-market returns r Large class sizes and high teaching load r Limited resources for capital investment in higher education r Comparative advantage in higher education output diminishing Below-average increase in enrolments and entry Declining market share in foreign enrolment r Above average participation in non-formal continuing education and training, but low intensity of courses large disparities in participation patterns r Below-average output for baseline qualifications With large labour-market penalties

The UK stands out in showing consistent rises in educational investment …in terms of a rising share of GDP devoted to education …in terms of a growing educational share in the public budget r Between 1995 and investment in primary and secondary education increased in the UK by 36% (OECD average increase 26%)… …while spending on tertiary education grew, at 18%, only half as fast as at the OECD average level (OECD average increase 36%) r Spending on education also grew faster than GDP From 4.3% of GDP in 1990 to 5.5% in 1995 to 5.9% in 2002 (a value that is now above the OECD average (5.8%) r A growing share of a public budget that shrunk relative to GDP is devoted to education Spending on institutions plus public subsidies to households rose from 11.4% in 1995 to 12.7% in 2002

Expenditure on educational institutions as a percentage of GDP (2002) Primary and secondary education B2.1

Expenditure on educational institutions as a percentage of GDP (2002) Tertiary education B2.1

Public expenditure on education as a percentage of total public expenditure (1995, 2001) B4.1

Annual expenditure per student on educational institutions, in equivalent US dollars converted using PPPs r Spending at the pre-primary level UK has highest spending level in the OECD An above-average share comes from public sources A significant increase since 1998… …while, at the same time, the rate of participation of 4-year-olds and under as a percentage of 3-4-year-olds increased from 51% in 1998 to 77% in 2002 r Spending in primary and secondary schools Roughly average spending… …together with long school days (Scotland ranks 1 st, England 8 th ) …and above-average teacher salaries, although these have risen less than half as fast as on average in OECD countries …result, at 26 students per class, in one of the largest class sizes (only Turkey, Japan and Korea have larger class sizes and all but nine countries have between 16 and 21 students per class) With only 75% of current expenditure devoted to compensation of staff, schools have much greater capacity to purchase other goods and services than do OECD countries on average (81%) In primary and secondary education, spending increased by 36% while enrolments rose by 21%, resulting in a 12% per-student increase between 1995 and 2002 (OECD average increase 26%) The spending choices may be effective –Student performance at 4th grade level improved significantly in both mathematics and science between 1995 and 2003 (TIMSS)

Cumulative expenditure on educational institutions per student over the average duration of tertiary studies Annual expenditure on educational institutions per student multiplied by average duration of studies, in equivalent US dollars converted using PPPs (2002) Each segment of the bar represents the annual expenditure per student. The number of segments represents the number of years a student remains on average in tertiary education. B1.3

Changes in spending per student in tertiary education relative to different factors (1995=100, 2002 constant prices ) B1.4

Share of private expenditure on schools (1995, 2002) Primary, secondary and post-secondary non-tertiary education % r An above-share of spending on schools comes from private sources… …and it has increased at the highest rate after Switzerland (in percentage points) Note that this covers all types of expenditure from private sources, irrespective of whether the institution concerned is public or private B3.1

Share of private expenditure on higher education institutions (1995, 2002) Tertiary education % r At the tertiary level, the private share rose from 20% to 28%, the fastest rise after Australia… …whereas public spending rose only at 6% (compared with an OECD average increase of 38%) r The reverse is true for pre-primary education, here the UK funding was at 96% public significantly larger than the OECD average of 83% B3.1

Public subsidies for education in tertiary education (2002) Public subsidies for education to households and other private entities as a percentage of total public expenditure on education, by type of subsidy % of total public expenditure on education Country mean B5.1

Growth in high-level qualifications The massive growth in participation… …has now levelled off

Growth in university-level qualifications Approximated by the percentage of persons with ISCED 5A/6 qualfication in the age groups 55-64, 45-55, und years (2003) A1.3a

Tertiary-type A graduation rates, by duration (2003) Percentage of graduates to the population at the typical age of graduation % r The UK has an above-average university-level completion rate… mostly from short courses r The UK ranks 4 th with regard to the number of science graduates as a percentage of 100,000 employed in the age group and 1 st among women …but rapid growth in university-level qualifications has now levelled off and the UK no longer tops graduation rates as was still the case in 2000 Tertiary enrolment grew at much lower rates than at the OECD average level (18% between 1995 and 2002, compared with an OECD average of 28%)

Entry rates into tertiary education (2003) Sum of net entry rates for single year of age in tertiary-type A and tertiary-type B education % …and entry rates to higher education are, at 48%, now well below the OECD average of 53% In 1998 the picture was still different, with a UK entry rate of 48% significantly above the OECD average of 40% r But the success rate is, at 83%, significantly better than at the OECD average level (70%) r And entry rates at at the non-university tertiary level remain well above the OECD level In fact, here the UK improved slightly from the 6th to the 5th place among 16 countries with comparable data C2.1

Tertiary education is rapidly becoming an international domain …and the UK remains one of the most attractive student destinations… …with growing foreign enrolment… …although its international market share has declined faster than that of any other country.

Distribution of foreign students by country of destination (2003) Percentage of foreign tertiary students reported to the OECD who are enrolled in each country of destination r In 2003, 2.1 million people studying in OECD countries were foreign students r An 11.5% overall increase r But UK saw the fastest decline in market share among OECD countries, from 16.2% in 1998 to 13.5% in 2003

Percentage of foreign students in tertiary education (1998, 2003) Percentage of foreign students to total enrolment in tertiary education % C3.1

Stagnation in baseline qualifications

Baseline qualifications Approximated by the percentage of persons with uppersecondary qualfications in the age groups 55-64, 45-55, und years (2003) r The UK has falls well behind the OECD average with adult attainment at the upper secondary level* * equivalent to 5 or more GCSEs at grades A to C or NVQ Level 2 or higher With serious consequences for those who have not completed this level –While UK employment rates among university and upper-secondary graduates are well above the OECD average, for those who failed to attain the upper secondary level they remain, at 62% for men and 47% for women, significantly below the OECD averages of 73% and 49% –Among those without upper secondary qualifications 37% earn half or less of the national median earnings, and only 1% are in the group of top earners, whose earnings exceeds twice the OECD median –These earnings penalties are much larger than at the OECD average –Likelihood of unemployment 1.4 times as high as for upper secondary graduate Note that the youngest individuals in this comparison (25-year-olds in 2003) passed the age of 16 in 1994 r Very modest progress with participation at age 17 Only Greece, Mexico, New Zealand, Portugal and Turkey had a lower proportion of their 17-year-old population enrolled …while at age 20, the UK’s participation rate is above OECD average level

Initial education alone can no longer satisfy the rising and changing demand for skills An above-average share participate in non-formal continued education and training… …even though the intensity of participation is low… …and participation rates are lowest among those who need it most

Participation of the labour force in non-formal job- related continuing education and training (2003) % r However, the intensity of participation in non- formal job-related education and training is comparatively low in the UK With the mean number of hours per participant in the labour force at 28 hours well below the OECD average of 62 hours C6.2

Participation of the labour force in non-formal job- related continuing education and training (2003) % C6.3

Participation of the labour force in non-formal job- related continuing education and training (2003) % C6.5

The individual and social returns to qualifications

The earnings advantage of education Relative earnings of year-olds with income from employment (upper secondary education=100) In the UK, females with a tertiary-Type A qualification earn, on average, twice as much than males who completed only upper secondary education (OECD average 162%). In the UK, males without upper secondary education earn 73% of those with it (OECD average 82%). r In the UK, higher education pays off even more so than at the OECD average level r Rising tertiary level qualifications seem generally not to have led to an “inflation” of the labour-market value of qualifications. In all but three of the 20 countries with available data, the earnings benefit increased between 1997 and 2003, in Germany, Italy and Hungary by between 20% and 40% (UK 9%). Growing benefits in many of the countries with the steepest attainment growth A9.1

Distribution of year-olds by level of earnings and educational attainment OECD average UK A9.4a

Private internal rates of return (RoR) for an individual obtaining a university-level degree (ISCED 5/6) from an upper secondary and post-secondary non-tertiary level of education (ISCED 3/4) (2002) MALES A9.5

Private internal rates of return (RoR) for an individual obtaining a university-level degree (ISCED 5/6) from an upper secondary and post-secondary non-tertiary level of education (ISCED 3/4) (2002) FEMALES A9.5

The driving forces of GDP per capita growth Average annual percentage change ( ) Ireland, Korea, Mexico and Turkey were the only countries where demography made a significant positive impact on GDP per capita growth… Increases in employment rates made a big contribution to growth in some countries But in almost all countries, the biggest contribution came from increased labour productivity …in others it is beginning to act as a slight drag on growth While declines in employment rates reduced growth in others But where does labour productivity growth come from… …and why does it vary so much across countries? A10

Enhancements in human capital contribute to labour productivity growth Average annual percentage change ( ) In the UK, improvements in educational attainment between 1990 and 2000 contributed to labour productivity much more than in the United States and in any of the other 14 countries except Portugal A10

Overview r Strong educational investment Consistently rising investment in education High investment in pre-primary education, rapidly growing participation Strong and improving performance in primary education Above-average instructional hours and teacher salaries at school r Public/private cost-sharing in line with individual and social benefits Strong public investment in pre-primary education Growing private share in tertiary spending r Strong internal efficiency of higher education and high and growing labour-market returns r Large class sizes and high teaching load r Limited resources for capital investment in higher education r Comparative advantage in higher education output diminishing Below-average increase in enrolments and entry Declining market share in foreign enrolment r Above average participation in non-formal continuing education and training, but low intensity of courses large disparities in participation patterns r Below-average output for baseline qualifications With high labour-market penalties

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