Public spending on education reflects society’s investment in children to equip them with fundamental social and economic skills needed to be self-sufficient in their lives. Investing in education reduces poverty and boosts economic growth through human capital development, and is most efficient, in terms of long-term costs and benefits to society, and effective, in terms of human capital development, when investment starts during the early years and continues throughout childhood.
Public spending on education is 4‑5% of GDP on average across the Asia/Pacific and the OECD (Figure 4.12). However, cross-national variation is considerable. In 2022 (or latest year), public investment in education amounted to 8% of GDP in Bhutan and Kyrgyzstan, but less than 2% of GDP in Papua New Guinea, Pakistan, Cambodia, Lao PDR and Sri Lanka.
Public spending on education as a percentage of GDP can be higher in richer countries than in poorer countries but this is not necessarily so (Figure 4.13, Panel A). For example, public spending on education as a percentage of GDP is similar in Australia and Uzbekistan, at very different levels of GDP per capita (Chapter 3). These differences can be explained by a range of factors, such as the role of private financing of education, the level of wages of educators, costs of education material, and population structures (Chapter 3). For example, in 2022, the proportion of children age 0‑14 in the population of Uzbekistan (30%) is much higher than in Australia (18%).
Indeed, the picture is different when considering education spending per student. Public spending on education per primary student tends to be higher in richer countries (Figure 4.13, Panel B). On average, public spending on education is more than twice as high in OECD countries than in the Asia/Pacific region. Public investment in education per student in Nepal is comparatively low, but still higher than in Cambodia and Kazakhstan where GDP is higher than in Nepal (Chapter 3).
