Quality Education for All: Much More than a Financial Challenge


Remarks by Angel Gurría, OECD Secretary-General, during the presentation of Education at a Glance 2008


Paris, 9 September 2008
Good morning Ladies and Gentlemen,

It is a great pleasure to present the 2008 edition of OECD’s Education at a Glance within the framework of this International Conference. Every time I present a new version of this publication I am more convinced about the power of education as a key variable in the globalisation process. 

Education at a Glance helps us to better understand our education systems; it allows us to measure their strengths and fragilities and to look at them through the lenses of policies planned, implemented and achieved in other countries. At a time when our intellectual capital is defining the destiny of our countries, measuring the pulse of our education infrastructure becomes a must.

This year’s edition of Education at a Glance presents a collection of very interesting numbers and assessments, all of which I would like to share with you. But I will concentrate my presentation on three key messages from this report, which I believe will be crucial for policy-makers:

First, starting with the good news, most OECD countries are experiencing a rising tide in the demand for education. Graduation from upper secondary education is becoming the norm in most OECD countries. And a majority of students who graduate from upper secondary education now aim to pursue further tertiary education. This “hunger for knowledge” is testing the policy and budgetary capacity of governments.

Second, in spite of recent and considerable rises in spending levels, including an increased participation of private sector funding, expenditure in tertiary education in some OECD countries cannot cope with the increased demand. This can be a bottleneck for economic performance. Already, the proportion of skilled jobs in OECD economies is generally larger than the potential supply of individuals holding high-level education and training qualifications to fill those jobs.

Third, solving this challenge is not only a matter of increasing financial resources. It is much more a question of optimising policy choices, and also a matter of improving the management capacity of our institutions of higher education, of making their financial engineering more efficient, more strategic and globally oriented.

Let’s go to the facts.

The 2008 edition of Education at a Glance reveals that the decades-old expansion in educational participation and outputs continues to grow in volume terms. In fact, it is growing at a pace that outstrips many past projections, with the greatest recent expansion coming in the tertiary sector: While in 1995, 37% of an age cohort went into university-level programmes; that number is now 57%. This is a significant leap of great consequence.

Tertiary education systems in OECD countries are now providing for around 8 million more students than back in 1995. And in some countries, the pace of change is even faster: In Finland and Poland, for example, the entry rate to university education has doubled in that period. These are great challenges for any public administration.

The growth in international students is playing its part in this. There are now over 2.9 million tertiary students enrolled outside their country of citizenship, more than a 50% increase since 2000 and more than double the number in 1995.

The growing desire for higher qualifications is not surprising: In 15 out of 21 countries with available data, the earnings premium for those with tertiary education increased during the last decade, despite the significant rise in tertiary attainment.

Education at a Glance shows not just the individual earnings and employment benefits of better education, but also the growing labour market demand for highly qualified workers: on average, during each of the eight years between 1998 and 2006, 0.5% of the total workforce has shifted to skilled occupations.

Meeting this rapidly rising demand for more and better education is creating intense pressures to raise spending on education and improve its efficiency. Recent years have already seen considerable increases in spending levels, both in absolute terms and in terms of the education share of public budgets or national income: The total amount of public spending on educational institutions in OECD countries over the last decade rose by 19% (on average); and all but 7 OECD countries spend at least 5% of GDP on education.

Rising expenditure has translated into 30% more resources per primary and secondary student on average over the last decade alone (see Indicators B1 and B2). And this trend is likely to continue, as the size of the student population in compulsory schooling is set to decline in 23 out of the 30 OECD countries over the next ten years. So primary and secondary education resources per student can continue to grow even on a constant budget, releasing money to improve programme quality and student performance.

But the picture is quite different in tertiary education, where expenditure has failed to keep up with expanding student numbers. In some countries ─ like Belgium, Germany, Hungary, Ireland, the Netherlands and Sweden ─ expenditure per tertiary student actually declined over the last decade. As student numbers are expected to keep rising and student mobility into the OECD area is adding additional pressures, it looks that without additional investments the trend towards declining expenditure per student would even accelerate.

OECD countries have faced this challenge in three main ways:

1) The Nordic countries have achieved expansion by allocating massive public spending on higher education as an investment that pays high dividends to individuals and society. In these countries, the expansion of public spending is made possible through progressive income taxes which encourage individuals to pay for their education later on in life. 

2) Other countries ─ such as Australia, Canada, Japan, Korea, New Zealand, the United Kingdom and the United States ─ have expanded participation in tertiary education by shifting some of the financial burden to students. I am not denying the equity-related issues which this raises, but I encourage those who look at tuition rather sceptically to examine Indicator B5, which shows that greater private investment has often not been simply about charging higher tuition, but several countries have established innovative strategies to combine greater private investment with financial support to students from less advantaged backgrounds.

3) In third place, the most worrying group of countries in the OECD are those in continental Europe that have not increased public investments in universities to the extent needed, and yet do not allow them to mobilise private resources. As a result, their institutions’ budgetary difficulties are increasing and the quality of the programmes offered may be endangered. Average spending per tertiary student in most European countries is now well below half the level in the United States. This might contribute to the fact that in the list of the top-20 universities of the Times Higher Education World University Rankings 2007 there were no institutions from continental Europe.

In some European countries however, these patterns are changing: In Austria and Portugal, for example, the introduction of tuition fees has increased the share of private spending on tertiary education markedly between 2000 and 2005 and, together with stable public investments, also led to a considerable rise in spending per student.

This being said, money alone will not do the trick. Investments in education will need to become much more efficient too. Indicator B7, which draws on our PISA study, clearly shows that more money is not a guarantee for better outcomes.

Policies are a determinant factor. Countries make very different choices to improve the efficiency of education, in weighing their investments in salary levels, the number of hours students should learn, the amount of teaching time required and the size of their classes.

In Australia, New Zealand and the United Kingdom, for example, below-average class sizes are afforded through an above-average teaching load for teachers. Mexico applies high teacher salaries relative to GDP per capita, as well as Korea, but that means schools and teachers have to put up with large classes.

These differences illustrate the important choices that are available in terms of how an extra dollar of spending on schools might be deployed. Countries struggling with improving the efficiency of education should look to the countries that show the greatest value for money. Our next release of the PISA results for 2010 will project how such choices line up with trends in student performance.

At the tertiary level, it is also necessary to improve the efficiency of education. For example, improving guidance mechanisms for students to help them make more informed choices when moving from secondary to tertiary-level programmes could impact on graduation rates and ease pressures on spending. It might seem surprising, but some 31% of students in OECD countries (on average) do not complete the tertiary studies for which they enrol.

Universities will also have to evolve so that their leadership and management capacity allow them to be more entrepreneurial. In some cases, there is significant room to improve governance and financial management techniques to bring universities up to speed with the current dynamic and competitive context.

These are the three key messages that I wanted to bring to the spotlight. You will find lots of other interesting assessments, comparisons and recommendations within these more than 500 pages, but I wanted you to leave this presentation with these reflections in your mind; because I think they will be strategic in our quest to build better education systems.

The corollary is both simple and blunt: the demand for education in OECD countries has been growing at an accelerating pace, and this rising tide is creating budgetary pressures to increase the offer of education without compromising quality, but tertiary education is not managing to meet this growing demand in many countries and this is quite a risk in a highly competitive globalised economy. While designing policies to bridge this gap, policymakers should not only focus on finding more resources, but on improving the overall management of tertiary education, in helping universities to improve their governance and adopt the latest financial management techniques to deploy their resources more efficiently. Again, it is not only a matter of money; it is a question of policy choices.

OECD aims to improve all countries’ knowledge on that rich universe of education policy choices through well established assessments like Education at a Glance or PISA or its extension to adult population through the Programme for International Assessment of Adult Competencies (PIAAC), but also with new studies like our Teaching and Learning International Survey (TALIS) or our work on the Assessment of Higher Learning Outcomes (AHELO).

Only a better and more inclusive education can produce the sustainable, equitable development our societies are demanding and that we should strive to deliver. The OECD stands ready to help in such endeavor.

Thank you very much.