Education spending accounts for around 5% of GDP in OECD countries and has seen a flat to declining trend over the past two decades. With changing demographics and enrolment patterns, spending per student has increased in recent years. There has also been a decline in learning outcomes in some countries. This points to scope for enhancing the efficiency and effectiveness of education spending. This chapter reviews ongoing initiatives to achieve savings and build efficiencies in this area. Reported measures fall broadly into three categories: recalibrating the balance between public support and private contributions, e.g. by targeting student support or increasing user charges, primarily in higher education; adjusting education delivery to changing demand; and making sure education budgets are allocated where they are likely to achieve the largest impact, e.g. by improving efficiency in governance and administration.
Restoring Public Finances
Enabling Effective Government
Abstract
In a context of fiscal stringency, changing demographics and declining educational outcomes, the RPF Survey shows that central governments are pursuing a mix of targeted and incremental savings measures to build efficiencies in education, especially in higher education.
Around three fifths of the Survey respondents seek to enhance the efficiency of education spending, either by recalibrating the balance between public support and private contributions, adjusting education delivery to demand (e.g. to changing demographics and population shifts across geographical areas) or reallocating funds to maximise impact and address the challenges of declining learning outcomes. Overall, the measures are modest in scale, and several respondents plan to reinvest savings within the education sector. Deeper reforms, such as reforming governance or rationalising staff costs, are less frequently observed in the RPF Survey. The recent disconnect between increasing spending per student yet declining student learning outcomes points to a broader scope for efficiency‑enhancing reforms to improve resource use.
Reform initiatives and savings measures
1. Reducing spending on higher education support
Reducing or restructuring of student grants and loans, often to discourage prolonged study durations or the accumulation of academic credits, especially in countries with generous support.
Improving means‑testing to better target student support policies.
Restricting access to overlapping benefits, including housing support.
2. Structural responses to changing demographics and labour markets
Gradual move towards system rationalisation in primary and secondary education, including school mergers, class consolidation or closures to adjust capacity to falling student numbers.
Incentivising higher education institutions to streamline programmes and engage in managerial reform.
Improving labour market alignment, including through flexible or shorter education programmes.
3. Efficiency improvements in primary and secondary education
Reform activity in compulsory education is less prevalent in the Survey responses, and sizeable savings are rare. Nonetheless, reported measures include:
Reducing costs related to teaching staff by adjusting the workforce to falling enrolment or focusing teaching resources on core pedagogical tasks.
Reallocating resources to high-impact areas within the sector while scaling back lower‑value activities.
Introducing user charges for supplementary services (e.g. transport or after‑school care).
Governance changes, such as shifting responsibilities to municipalities or schools.
Efficiency gains or administrative savings.
Education is one of the largest categories of public spending in OECD countries. In 2023, OECD countries dedicated on average 11.4% of general government expenditure to education (Figure 7.1, Panel A), equivalent of 4.9% of GDP (Figure 7.1, Panel B). In most OECD Member and accession candidate countries, education as a share of general government expenditure has declined somewhat since 2019.
Note: Costa Rica data from 2021 rather than 2023. Data for Chile, Colombia and Costa Rica not included in the OECD average. Data not available for Canada, Mexico, New Zealand and Türkiye.
Source: Public finance by function - government at a glance indicators, yearly updates – based on OECD National Accounts Statistics (database) and Eurostat Government Finance Statistics (database) as of 09 January 2026. OECD Data Explorer.
This chapter discusses government expenditure related to the provision, administration, and support of education services across all levels. This includes spending on pre‑primary and primary education, secondary education, post‑secondary non‑tertiary education (e.g. vocational programmes), tertiary education (universities, colleges, and other higher education institutions, referred to as higher education in this chapter), as well as education not definable by level (general or cross-cutting educational services). It also includes subsidiary services to education, such as transport, meals and administrative support. General government expenditure refers to spending by public authorities, including in central (national/federal), regional, provincial, and local governments.
The spending data presented in Figure 7.1 and Figure 7.2 is based on the Systems of National Accounts (SNA), and COFOG, and are not fully comparable to UNESCO, OECD and Eurostat (UOE) data collection on education statistics as presented in the OECD’s Education at a Glance due to differences in underlying definitions. Notably non-formal learning is excluded from UOE data but included in COFOG data.
Source: Systems of National Accounts (2008); (OECD, 2025[1])
While the significant drop in education spending in 2020-2021 (Figure 7.2) can be explained by the effects of the COVID-19 pandemic and larger increases in other expenditures, historical data shows a flat to slightly declining trend in education spending relative to both GDP and general government expenditure in the OECD since the mid-2000s. Although education spending has grown more slowly than economic output, spending per student has generally increased over the same period. In addition to rising input costs, changing demographics (with smaller cohorts of school-aged learners) and enrolment patterns largely influence education spending. Between 2015 and 2022, the number of students across all levels of education increased by a moderate 2.5% on average across OECD countries. Growth was driven mainly by increases in higher education, reflecting expanded access to universities. At the same time, government expenditure on education increased by 13.1% on average across OECD countries (OECD, 2025[1]).
OECD average, 2007-2023
Note: Data for Chile, Colombia and Costa Rica and are not included in the OECD average.
Source: Public finance by function - government at a glance indicators, yearly updates – based on OECD National Accounts Statistics (database) and Eurostat Government Finance Statistics (database) as of 09 January 2026, OECD Data Explorer.
Public funding of education is complemented by private sources (students and families or private companies and institutions) to a varying extent across levels of education. In primary and secondary education, private sources constitute on average less than 10% of total funding per student. In higher education, however, private sources play a more important role, averaging 30% of total funding per student (OECD, 2025[1]).
In many OECD countries, education governance and funding is a shared responsibility across central, regional and local governments. Since the early 1980s, decentralisation trends have led to schools and local governments receiving greater autonomy, especially at lower levels of education (OECD, 2018[2]). There is, however, still significant variation across countries, ranging from fully centralised systems (e.g. France) to systems where education is mainly financed and managed by sub-national governments (e.g. United States). The RPF Survey results reflect spending decisions and reforms by national governments. The savings measures in the higher education sector may feature more prominently in the RPF Survey because central government more frequently has responsibility for funding this sector relative to sub-national governments.
Percentage change in the number of students, expenditure on primary to post-secondary non-tertiary educational institutions and expenditure per student, 2015 to 2022, based on full-time equivalent students, constant prices
Note: For further methodological information, see Education at a Glance 2025: Sources, Methodologies and Technical Notes.
1. Includes payments by households outside educational institutions.
2. Primary education includes also pre-primary.
Source: Education at a Glance 2025 (OECD, 2025[1]), see Tables and Notes section (page 284).
Data on educational attainment and spending across OECD countries suggests that the effectiveness of education expenditure can be improved. Figure 7.3 shows that from 2015 to 2022, total expenditure per student in primary to post-secondary non-tertiary education increased by 13.5% on average. Although part of the increase reflects evolving enrolment, increased spending in school resources has also been a deliberate policy choice in many countries. Nonetheless, during the same period, learning outcomes as measured by average scores in the OECD’s Programme for International Student Assessment (PISA) in reading, mathematics and sciences have declined markedly. In fact, performance in PISA 2022 was the lowest in all subjects in the history of the programme, and significantly below the mean performance observed in any earlier assessment (except PISA 2018, in science) (OECD, 2023[3]).
While the underlying reasons for the observed divergence remain uncertain, research finds that simple increases in school inputs do not necessarily translate into better educational outcomes. Although there is a positive association between education spending and student test scores at the general macro level, this relation holds true only in countries with levels of spending below the OECD median (Égert, de la Maisonneuve and Turner, 2023[4]). Beyond a certain threshold, the governance, distribution and effective use of school funding is found to be at least as important to promote student learning (OECD, 2022[5]). Policies found to be most likely to promote better educational outcomes include quality pre-primary education, quality teaching, and accountability and autonomy of teaching institutions (Smidova, 2019[6]).
The recent disconnect between spending per student and educational outcomes suggests that there should be scope for countries to further build efficiencies in this area, to preserve educational outcomes at a lower cost or attain better outcomes with current levels of funding through quality-enhancing reforms. While the latter may not involve cost savings in the short term, quality-enhancing reforms could improve productivity and growth over time, especially if combined with structural reform. A recent OECD study suggests that combining education policy reform with structural measures to enhance labour market reallocation and adaptability could boost long-run productivity by around 1.5% (Andrews, Égert and de la Maisonneuve, 2024[7]). Given the scope of the RPF Survey, this chapter focuses primarily on savings measures that can contribute to improving public finances in the shorter term, for example by increasing the cost-effectiveness of public spending. However, education is also recognised by a number of RPF Survey respondents as a priority area for increased funding in the longer term (see Chapter 1).
Figure 7.4 gives an overview of reform initiatives and saving measures in education in 2025-2026 from the RPF Survey. Although education is not a focus area for large fiscal savings, around 60% of respondents signal savings measures in this area, typically to enhance efficiency, improve incentives or better target support. While the RPF Survey focuses on savings and efficiencies, other OECD work presents a broader analysis of education reforms designed to enhance quality or access to education (OECD, 2017[8]; OECD, 2022[5]; OECD, 2025[9]).
Measures approved or submitted to parliament for the fiscal years of 2025 and 2026, all levels of education
Note: Results based on 39 RPF Survey responses. The category “Administrative savings or efficiency reforms” has been created following reclassification of some of the “other” measures based on the qualitative information provided by respondents. The remaining “Other” measures include general savings for one or more levels of education (e.g. for universities or for secondary schools) that have not been further detailed, or savings that have not been specified because the funds are being reinvested in the education sector.
Source: 2026 OECD Survey on Restoring Public Finances, Question 6: Education.
Measures in the RPF Survey cluster around changes to student support, reforms to consolidate or merge schools or programmes, and administrative savings. Measures are most common in higher education. Deeper, structural reforms such as reducing staff cost and increasing decentralisation are comparatively less frequent. While respondents may have different motivations for seeking efficiencies, three recurrent themes emerge:
Recalibrating the balance between public support and private contributions, e.g. by targeting student support or increasing user charges.
Adjusting education delivery to the demand for services, e.g. achieving savings as the number of school-aged learners goes down.
Making sure education budgets are allocated where they are likely to achieve the largest impact, e.g. minimising expenditures that do not support quality of education.
Several respondents with ongoing saving measures in primary or secondary education specify that they intend to reinvest the savings within the sector. In addition to the saving measures summarised in Figure 7.4, around one quarter of the RPF Survey respondents report planned spending increases on education (see Figure 1.12 in Chapter 1). Many of these indicate that new expenditures in education, for example through university reform or investments in vocational training and apprenticeships, are prioritised because they are expected to support long-term growth.
7.2.1. Reduce or restructure student support
Reducing or restructuring support for students pursuing higher education is an area of focus among Survey respondents. As shown in Figure 7.5, both the level of tuition fees and public financial support available for students in higher education vary greatly across countries. As enrolment in higher education continues to grow in many OECD countries, governments seek a combination of tuition fees, student support and private contributions that balances fiscal capacity, equity goals and other national priorities (OECD, 2025[1]). The RPF Survey shows that several countries with generous student support policies, including many of the Nordic countries and New Zealand, are reducing spending by targeting or restructuring grants and loans. These saving measures are often designed to simultaneously improve incentives for study completion and promote rapid employment.
Annual average tuition fees charged by public institutions to national students enrolled in bachelor’s programmes and share of national students benefiting from direct financial support, 2022-2023
1. Reference year differs from 2022-2023.
2. Government-dependent private institutions instead of public institutions.
3. Master's and doctoral programmes are combined with bachelor's programmes. Data includes foreign students in Germany.
4. Short-cycle tertiary programmes are combined with bachelor's programmes.
Source: OECD Education at a Glance (OECD, 2025[1]), see Tables and Notes section (page 341 of Education at a Glance, 2025 edition).
Denmark, New Zealand and Norway have all adopted measures to change the design of public support to disincentivise students from accumulating academic credits without completing their degree or qualification. By linking benefits to successful outcomes, the countries are seeking to reduce dropout rates and promote earlier labour market entrance.
Denmark recently introduced new criteria for student grants, limiting access to grants to a standardised study duration and reducing the maximum grant allowance. The measures are estimated to reduce costs by approximately DKK 400 million (around EUR 53 million) from 2030.
New Zealand is incentivising completion by replacing covered tuition fees for eligible learners in their first year of study or training (“First‑Year Fees Free”) with covered tuition for learners’ final year of study (“Final‑Year Fees Free”). The benefit is paid out upon qualification completion.
In Norway, the conversion rate of student loans to grants based on earned course credits was reduced from 25% to 15%, while the conversion following a completed degree was increased from 15% to 25%.
Other OECD countries are tightening eligibility or reducing overlapping support policies for students. Such reforms aim to rationalise spending by reserving public support for groups deemed to be the most in need.
In Belgium, the government is tightening financial and eligibility criteria for study grants in the Flemish Region by introducing stricter study-load rules (reserving support for full-time students), imposing an upper age limit for support (30 years), and narrowing income thresholds. It also abolishes a supplement support for low‑income families once students enter higher education.
Canada is limiting access to the Canada Student Grant for Full-time Students to students attending public educational institutions and not-for-profit private institutions, starting in 2026-2027, pending regulatory approval. The government points to rapid growth in longer duration programmes at private career colleges as one of the reasons for the policy change. This has led to an increase in Canada Student Grant for Full-time disbursements to students in private institutions of 320% over five years, whereas disbursements to students in public institutions has increased by 37% in the same period. The reform seeks to prioritise support for students in need and on programmes with demonstrated better career prospects.
Sweden has discontinued their ‘Study Start Support’ programme, due to misalignment with the intended target group. The study start support programme was a targeted study grant designed to help unemployed adults (ages 25-60) with low prior education start or resume studies at the basic or upper-secondary level. Its purpose was to increase participation in education among people with substantial educational needs, thereby improving their chances of entering the labour market. In practice, a large share of recipients did not match the high‑needs population it was designed for, and the government has therefore decided to phase out the policy.
A few countries are rationalising support measures by reducing housing support for students. In Finland, students will no longer be entitled to the general housing allowance but will, instead, receive a housing supplement as a part of their study grant. The change leads to net savings for the government. In Türkiye, dormitory accommodation fees for higher education students have been increased to partially compensate for previous fee adjustments remaining below CPI increases. This has led the Ministry of Youth and Sports to gradually raise the dormitory fees by approximately 40% over time.
7.2.2. Consolidate, streamline or eliminate programmes and schools
This category contains a diverse set of reforms at both lower levels of education and higher levels of education, many of which are being pursued to adjust educational systems to demographic changes or changing labour market needs. It also includes cases of countries discontinuing niche programmes found to be low value.
Adjustments to falling enrolment in school education
Faced with changing enrolment due to demographics and new settlement patterns, governments may seek to consolidate, rationalise or streamline schools or school networks to help contain costs and improve the quality of school education. In many countries and economies, systems face excess school capacity, especially in rural or remote regions where the number of children in school-age is declining. Operating school networks with a large number of small schools or facilities with significant overcapacities can place a significant financial burden on education systems and negatively influence the quality of education (OECD, 2018[10]). Containing costs can involve discretionary decision to withhold expenditure increases or promote structural changes, such as school closures and mergers.
In Costa Rica public education faces a tension between a constitutional mandate targeting to allocate at least 8% of GDP to the sector while simultaneously ensuring fiscal sustainability in a situation with low birth rates having a profound impact on the education system. Since 2022, student enrolments have decreased by 115 000 students, resulting in empty classrooms, especially in rural areas and those far from urban centres. As a consequence, the Ministry of Public Education considered merging classes, redistributing teaching staff, and closing schools. Fewer students mean less justification for maintaining the same number of schools and staff, which raises questions about resource allocation and sustainability. The challenge of the government is to reduce costs without sacrificing educational quality or access.
In response to demographic shifts and declining birth rates, the government of Thailand has accelerated its consolidation of schools with fewer than 120 students. Schools located within a 6-kilometer radius of a “Magnet School” are being merged to optimise resource allocation, improve teacher-to-student ratios, and reduce fixed administrative costs.
In Chinese Taipei, the introduction of a transformation and exit strategy for upper secondary schools and above helps guide institutions facing demographic or financial pressures through orderly restructuring. By providing targeted consultation, strengthening oversight through an exit review committee, and ensuring that vacated school sites are effectively revitalised and reused, the reform seeks to avoid stranded or under‑utilised assets.
Adjustments to falling enrolment or changing labour market needs in higher education
The cost of providing higher education has increased considerably in OECD countries whereas productivity gains have been harder to achieve (OECD, 2020[11]). From a public spending perspective, a central goal is to ensure that higher education systems are organised to promote excellence and address labour market needs, while keeping expenses in check. This requires institutions that are responsive to changes in demand. As higher education systems often are characterised by a high degree of institutional autonomy and independence, some RPF Survey respondents are taking measures to encourage institutions to adapt to demographic and labour market changes. For example, in Japan, certain universities with low enrolment or poor financial conditions will be required to formulate a management improvement plan as a condition for receiving public support. This is a part of a strategy to promote the downsizing and integration of private universities.
In addition to eliminating duplicated or low-enrolment programmes and downsizing faculty, strategies to improve cost-effectiveness can include expanding online learning options, student mobility between institutions or the use of shared facilities and services. For example, in Korea, the sector is achieving savings by consolidating support services into regional centres that will oversee budget execution, project selection, evaluation, and other key tasks for a number of universities.
Although not pursued primarily as fiscal savings measures, a few countries mention in the RPF Survey that they seek to strengthen links between higher education institutions and the labour market. Denmark recently adopted a comprehensive reform to make higher education programmes more flexible, expanding shorter and hybrid programmes that are possible to combine with work. Hungary has also implemented measures to encourage universities’ responsiveness to labour market and economic needs. These are examples of many reforms undertaken in the area of education intended to shift the use of resources to improve long-term outcomes.
Discontinuing or reducing niche programmes
Some countries have discontinued programmes found to be of low-value or no longer justified. For example, Belgium has discontinued several specific funding schemes in higher education and reduced differentiated support measures in primary and secondary education. In addition, the French-speaking part of Belgium is ending an extra, optional year of vocational schooling (7th vocational qualification year) for students who have already completed secondary education, instead redirecting these learners to adult training programmes to gain job-specific skills. Other examples include Chile having closed a special post-pandemic support plan after key indicators, such as school attendance rates, returned to pre-pandemic levels and France discontinuing a fund supporting innovative projects in schools from 2026.
7.2.3. Administrative savings or efficiency reforms
As in other expenditure categories, several respondents are implementing savings in central and regional administrations, typically with the aim of enhancing efficiency within the relevant authorities. For example, Korea is seeking administrative efficiencies through the establishment of regional centres which will reduce administrative costs, as mentioned above. Sweden has adopted measures to improve efficiency in national education agencies. The measures reported in this category reflect the significant emphasis from many countries to improve government operations, which is also observed in other areas of public expenditure throughout the RPF Survey.
In addition, although not delivering immediate savings, there are examples of respondents expecting the adoption of new technologies and digital infrastructure to enable longer-term efficiency gains. For example, Thailand is aiming to enhance efficiency on educational content delivery and administrative processes by implementing a digital-first approach, amongst others to reduce spending on printed textbooks and library space.
7.2.4. Increasing user charges
User charges or tuition fees can be a way for governments to share the financing burden of providing education with those reaping the future benefits and is used to varying extent across countries and education levels, particularly in the area of higher education. While most OECD countries provide compulsory schooling free of charge, the combination of high provision costs and substantial private returns, in terms of higher future earnings, has led to a greater degree of cost-sharing between the state and students in the area of higher education. However, public universities and public funding still play a major role in this area (OECD, 2025[9]). Further leveraging private sources of funding, especially in higher education, could be a strategy for governments to help alleviate pressures on public funding while strengthening incentives for students to complete their education in time and choose programmes that are aligned with labour market opportunities.
In the RPF Survey, reforms to introduce or expand user charges are modest in scope and cluster around three main approaches: Accelerating annual fee adjustments, differentiating fees for foreign students and introducing user charges for subsidiary services.
Against a backdrop of high inflation and increasing costs, a few respondents are raising tuition fees in higher education by accelerating annual adjustments. Belgium has ended its long‑standing freeze on tuition fees in the French-speaking Community and introduced a reform to progressively align tuition fees with inflation. The new system is structured into four income‑based tiers, ensuring that fee increases reflect students’ financial situations. The government anticipates continued savings through 2029. In New Zealand, the budgets of 2024 and 2025 facilitated increases of up to 6% in tuition fees charged by institutions, a doubling from the year before, in order to help institutions cope with inflation and funding pressures.
It is a common feature in higher education that foreign students are charged higher tuition fees than domestic students (OECD, 2017[12]). Around two-thirds of OECD countries with available data charge higher tuition fees to foreign students than to domestic ones for master's or equivalent programmes, making this an important source of institutional funding (OECD, 2025[1]). As shown in Figure 7.6, some of the countries with the largest gap in tuition fees between domestic and foreign students still remain attractive to international students, presumably due to high quality of education, English-speaking environments and favourable post-graduation labour market opportunities. Even traditionally tuition-free systems, such as Denmark and Sweden, have introduced higher fees for foreign students in recent years. From the 2026/27 academic year, France reports increasing tuition fees for non-EU students. Differentiated tuition fees will become mandatory for new non‑EU entrants in public higher education institutions, significantly raising average fees and limiting institutions’ discretion to grant exemptions. The reform is expected to strengthen institutions own‑resource funding.
In a reform mirroring its existing fee structure in higher education, Finland is introducing tuition fees for non-EU students also in upper secondary education, including general and vocational schools. By excluding these students from the central government’s funding transfer to local authorities, the reform shifts the financial responsibility for educating foreign secondary students away from the state. To avoid unintended exclusion of protected groups, the provision includes clearly defined exemptions, such as non‑EU students permanently residing in the European Economic Area (EEA), exchange students, individuals under temporary protection and apprentices with an employment-based residence permit. The reform also expands revenue-raising opportunities for schools, by allowing vocational education providers to offer degree-based commissioned education to citizens of EU and EEA countries.
Annual average tuition fees charged by institutions to national and foreign students for master’s or equivalent programmes, 2022-2023
Note: The percentage in parentheses refers to the share of mobile/foreign students enrolled in master’s or equivalent programmes in 2022. It is important to note that some foreign/mobile students are subject to the same tuition fees as national students. For instance, in the EU countries depicted in this chart, only students from outside the EU/EEA are typically required to pay higher fees, while EU/EEA students are generally treated the same as domestic students regarding tuition policies.
1. Reference year differs from 2022-2023.
2. Government-dependent private institutions instead of public institutions.
3. The percentage in parentheses refers to the share of mobile students and less than 10% of mobile students from outside the EU/EEA end up paying higher tuition fees than national students.
4. Tuition fees charged for foreign students are between USD 8 000 and USD 21 000
Source: OECD Education at a Glance (OECD, 2025[1]), see Tables and Notes section (page 341 of Education at a Glance, 2025 edition).
Whereas a few other respondents report increases in user charges in the Survey, also in school education, these relate primarily to supplementary services, such as transport fees or after school activities, rather than tuition for core education provision.
7.2.5. Reduce costs related to teaching staff
Costs related to teaching staff is the largest component of education spending in all OECD countries, with remuneration for teachers accounting for more than half of total expenditure in public primary and secondary educational institutions on average (OECD, 2025[1]). A few countries have reported reforms concerning teacher salaries in the RPF Survey, covered in Chapter 11 on Government Operations. The limited frequency of such reforms may reflect the current level of teacher salaries, which remains below salaries of other tertiary educated workers in most countries, combined with recurrent teacher shortages (OECD, 2025[1]). However, some countries are also reporting measures to reduce teacher-related costs by adjusting the composition of the workforce or focusing teachers’ time on core pedagogical tasks.
France aims to align teacher staffing with declining student numbers by not replacing retiring teachers, while simultaneously investing in teacher quality through strengthened recruitment standards and extended training (Box 7.2).
Ireland is reporting decreasing levels of additional mainstream teaching staff allocations compared to previous years due to demographic decline. Additional recruitment for special educational needs continues at steady levels.
Italy is prohibiting the appointment of external substitutes for absences of less than 10 days in secondary schools, favouring instead internal staff.
In Thailand, the ongoing consolidation of small-sized schools (described above), aims to reduce staff-related budget expenditures. In addition, Thailand will exempt teachers from "on-site security duties", in order to reserve teachers’ time for core pedagogical activities and streamline school safety budgets through integrated local government support and technology-based security.
In 2026, France will adjust its teaching workforce by not replacing 5 500 retiring teachers, reflecting a projected decline of 101 000 pupils in primary education and 30 000 in secondary education. The measure reflects the fall in fertility, with current projections indicating a cumulative loss of around 1.5 million primary‑level pupils by 2034, equivalent to roughly one quarter of today’s enrolments. At the same time, the Ministry of Education records a net creation of teacher positions in 2026, owing to the phased implementation (2026-2028) of a reform that raises recruitment standards and extends initial teacher education to two years. These investments aim to improve teacher quality while ensuring workforce adjustments remain aligned with long‑term demographic realities.
Additionally, France has reduced the number of “voluntary missions” teachers can sign up for to supplement their salary, narrowing them to priority tasks such as short‑term replacement needs, homework support, and targeted assistance for low‑performing students. This rationalisation is intended to improve the allocation of expenditures and focus resources where they are most needed.
Source: Ministry of Finance, France 2026
7.2.6. Reassign responsibilities to subnational governments and bodies
Many education systems in the OECD are characterised by increasing fiscal decentralisation and schools being given considerable managerial autonomy. Decentralisation of spending is often found to be associated with higher levels of efficiency in public education (OECD, 2017[8]). However, although fiscal decentralisation may allow more flexible adjustment to local needs, dispersing responsibilities for financing and spending across different levels of government may also result in a lack of incentives for a fair allocation of resources on the one hand and responsible use on the other (OECD, 2022[5]). It is therefore important that responsibilities and competencies are well aligned. A full discussion of transfers across levels of government is also offered in Chapter 12 of this report.
The RPF Survey finds several examples of countries seeking to enhance spending efficiency by reassigning responsibilities to local governments, aligning responsibilities for revenue raising and spending powers, and allowing schools greater autonomy in resource use:
Czechia is transferring the responsibility for non-teaching staff and teaching aids from central to local governments, while simultaneously increasing their share of tax revenues.
In higher education, Korea has transferred the authority to manage university budgets, previously held by the Ministry of Education, to local governments.
In Thailand, a reform under legislative deliberation seeks to expand fiscal decentralisation by allowing individual school boards more autonomy in managing their budgets.
7.2.7. Enhancing efficiencies in primary and secondary education
Although school education is not a main focal point for savings in the RPF Survey, there is scope for allocating and using public resources more efficiently in primary and secondary education. As discussed above, the OECD’s PISA results disclose large variations in the performance of educational systems (between countries) and schools (within a country). Some school systems have increased spending without measurable improvements, while others are achieving excellent results with modest resources. Estonia is an example of a country that is consistently among the top performers in the PISA assessments, despite spending less per student than the OECD average (Box 7.3).
It is therefore useful to expand the discussion on enhancing efficiencies in primary and secondary education beyond the specific examples offered by the RPF Survey, drawing on broader existing OECD work (OECD, 2017[8]; Smidova, 2019[6]; OECD, 2022[5]; Égert, de la Maisonneuve and Turner, 2023[4]). While the optimal configuration of efficiency-enhancing reforms must be tailored to the specific country context, the below drivers have been identified in earlier OECD work as beneficial:
Focusing public spending on early years of schooling. Research indicates that high-quality early childhood education and care (ECEC) increases student achievement and lowers the need for costly remedial interventions in later stages of the schooling process (OECD, 2022[5]). Despite the demonstrated importance of the early years of schooling, in several countries more public education resources are still allocated to higher levels of education. Reallocating resources towards the early years of education, and particularly towards disadvantaged students, can therefore reduce inefficiencies, improve progression through the system, and increase the overall returns to education spending.
Promoting teacher quality. Within school education, teaching quality is found to be the single most important factor affecting students’ learning (Smidova, 2019[6]; OECD, 2005[13]). Measures aimed at making the teaching profession more attractive and investing in teachers’ skills (e.g. training, better career prospects, evaluation, incentives) could thus help raise efficiency. Measures could also include allowing teachers to spend more time on core tasks, as reported by some respondents in the RPF Survey. In the OECD Teaching and Learning International Survey, around half of teachers report excessive administrative work as one of their main sources of work-related stress (OECD, 2025[14]). Cost-effective measures such as streamlined administrative processes and greater support for non-pedagogical tasks could thus have a positive impact on the quality of teachers’ work.
Greater school autonomy in resource use – when combined with school accountability and adequate local capacity. OECD analysis finds that school autonomy is beneficial for student outcomes when coupled with the right level of accountability and adequate capacity at the local level. Holding schools accountable for their students' achievements and performance provides incentives to improve teaching quality and standards. Decisions made at the local level also have greater potential to achieve efficiencies given their ability to better respond to specific local needs. (OECD, 2022[5]).
Adapting school networks to changing needs. Small school size tends to be associated with greater inefficiency. As the cost of maintaining small schools with sharply decreasing enrolment is high, keeping these schools open may represent an expensive inefficiency for the school system. However, responding to changing demand and student needs requires strategies that are sensitive to local contexts and take into account educational quality and student well-being. School network consolidation may be unavoidable to guarantee adequate learning environments for all students. Nevertheless, systems need to carefully weigh its costs and benefits and consider the potential efficiency gains afforded by sharing resources across providers, school clustering or the strategic redistribution of education services across sites (OECD, 2018[10]). This is particularly relevant for countries seeking strategies to respond to demographic changes and urbanisation.
Estonia is widely recognised for its efficient and high-performing education system. Despite spending less per student than the OECD average, the country consistently ranks among the top performers in PISA assessments. Its strong results reflect a coherent policy mix including a focus on foundational learning, teacher quality, and governance arrangements that empower local actors.
One of the main features of the Estonian education system is its decentralised governance model, which grants schools and local authorities’ substantial autonomy over resource allocation and organisational decisions. While the national government defines national standards and principles for education funding, supervision and quality, the curriculum leaves considerable freedom to schools and teachers to decide how to best achieve the goals. Compared to the OECD average, teachers in Estonia report greater instructional autonomy, and principals indicate stronger teacher involvement in school‑level decision making.
Estonia’s approach is guided by the Education Strategy 2021-2035, which places the role of teachers at the centre of system improvement. The strategy has three strategic goals, is implemented through rolling 3-year programmes and monitored using a transparent set of measurable indicators. The three goals are:
Diverse and accessible learning opportunities
Competent teachers and learner-centred education
Alignment with society and labour market needs
Overall, Estonia illustrates the combined relevance of strategic direction, professional autonomy, and governance to deliver high learning outcomes at a sustainable cost.
Source: Government of Estonia.
References
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