Education Finance Watch 2022 has revealed alarming figures relating to the education investment gap between and within countries. According to the report, in low- and lower-middle-income countries spending on education has fallen dramatically, meaning that the loss of lifetime earnings of the current generation has doubled since 2020.
A joint report published by the World Bank and UNESCO warns that the pandemic has widened both the between-countries and within-country education investment gaps. In 2020, when COVID-19 hit societies across the world, low- and lower-middle-income countries decreased their spending on education by about 40%. Without more effort being made, learning inequalities will further deepen across countries, threatening the current generation’s earning potential. The latest predictions reveal that today’s generation of students will lose around US$21 trillion in lifetime earnings which significantly exceeds the original estimate of US$10 trillion set in 2020.
At the same time, however, the situation is different in higher-income countries where the share of education spending in the public budget remained stable from 2019 to 2021. In 2022 the percentage increased and became comparable to the pre-pandemic period. Assistant Director-General for Education at UNESCO, Stefania Giannini, commenting on the growing education inequalities, noted:
“We are walking head-first into an education crisis. Unless we radically transform our priorities, there will be no way back. If finance falters, families’ spending on education will suffer. The more of the education bill that falls to families, the larger the risk of increasing inequality. Stuttering education finance at this critical moment will have ramifications on families for years to come. ”
Significant inequalities exist between countries, as the level of public spending per capita remains very small in low-income economies compared to other income-group countries. In 2020, public spending per capita was about 150 times less in low-income countries than in higher-income countries. Overall, per capita, education spending in low-income countries was US$52 in 2020 compared to US$318 in lower-middle-income countries, US$1,079 in upper-middle-income countries, and US$7,787 in higher-income countries.
At a regional level, in sub-Saharan Africa and South Asia, the average government per capita spending on education was US$254 and US$358 respectively in 2019-2020. For comparison, in Europe and Central Asia, the average government per capita spending was around US$6,156 while in North America, it was equal to US$11,956.
Fig.1. Total public education spending per capita (constant 2020 US dollars) by income group, 2010-2020
Source: Education Finance Watch 2022
In contrast, the total expenditure on education, including international aid dedicated to education, government spending, and household expenditures, had grown significantly across all income-group countries before the pandemic outbreak. The report shows that total education spending reached US$4.9 trillion in 2018 compared to US$4 trillion in 2010. Remarkably back then, the absolute increase was higher in low- and middle-income countries.
Fig.2. Evolution of total real education spending (all sources), by country income group 2010 – 2020 (2010 = 100)
Source: Education Finance Watch 2022