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The Cost of Providing Universal Secondary Education in Developing Countries Council on Foreign Relations December 18, 2007 Melissa Binder Department of Economics University of New Mexico

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Enrollment data Gross Enrollment Rate (GER) provided by 90% of countries in sample Net Enrollment Rate (NER) provided by 2/3 of countries in sample

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Use with care NER determines how many children need to be enrolled. So the need to impute NER for 37 countries introduces a large degree of uncertainty into estimates. Includes China and India, which account for 41% of the total population of children years of age in developing countries At least some data needed to calculate costs were imputed for 75 countries These countries together account for 31% of the total population of children in developing countries

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Secondary NER in 2000 & figures are country averages that include imputed values figures are from World Development Indicators (accessed ). No data are available for South Asia in this series.

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Cost of Enrollment Expansion UNIT COST METHOD Determine number of new students to be enrolled Determine cost per student (the unit cost) Multiply Unit Cost times the number of new students

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Unit Cost Estimates Supply Side schools teachers books labs Demand Side opportunity costs

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Supply side costs Total secondary schooling spending divided by number of students Total public secondary school spending=

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Supply side costs, continued Number of students

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Caveats Unit costs combine capital and recurring costs Costs will be over-estimated high if country recently built many new schools Costs will be under-estimated if expansion requires new schools Expenditure data combine lower and upper secondary levels. Typically, upper-secondary costs exceed lower- secondary costs by 10%. Costs will be under-estimated if most of the expansion needs to occur at the upper level.

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Caveats, continued The Unit Cost calculation of public spending included private school students in the denominator, but public spending only in the numerator. Costs may be under-estimated by around 7.5% based on 70 countries that provide separate enrollment figures for private school students.

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Costs in Constant 2002 US Dollars All subsequent costs in constant 2002 US dollars.

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Are current costs the right costs? Unit costs were about the same in countries with high and low NERs, relative to income. Unit costs were about the same in countries that scored higher and lower than predicted by income, in a sub-sample of countries that participated in international testing.

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How Many Children? Children to be enrolled= School age students =

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How Many Children? continued Many current students are older than school-age due to high repetition rates Number of needed spaces would be much lower if repetition rates were reduced Needed spaces=

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How Many Children, continued To increase NER to 90% by creating new spaces 312,832 million children To increase NER to 90% using existing spaces (by reducing repetition to 7%) 254,213 million children

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All at once estimates Unit costs for all new spaces=$198 $198 X 312,832 million = $61.9 billion Unit costs for existing spaces=$172 $172 X 254,213 = $43.7 billion

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Average annual costs over 25 years for achieving achieving 90% NER Repetition unchanged Repetition reduced to 7% 90% NER in 15 years $44.6 b$29.4 b 90% NER in 25 years $28.2 b$24.3 b

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Basis for apportioning costs Countries pay median GDP share on education among those with NER higher than predicted by income. Foreign aid picks up the rest.

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Annual burden over 25 years: High cost scenario Spending expressed in billions of US dollars.

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Annual burden over 25 years: Low cost scenario Spending expressed in billions of US dollars.

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