Does the money invested in education guarantee high student performance and economic development? This is the question we will try to answer as we look at 10 Countries That Spend the Most on Education per Student. Before we present you the list, let’s first examine the nature of the relationship between economy and knowledge on one side and money and knowledge on the other side.
In 2000, the European Council adopted the Lisbon Strategy whose aim was to make EU “the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion” in the next ten years. Many agree today that the Lisbon Strategy failed to accomplish its goals, mainly because of poor implementation in EU states. At the same time almost no one has questioned the principles upon which it was built, including the idea that economic growth must be knowledge driven. But to what extent can knowledge boost a country’s economy?
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It is evident that there’s a direct correlation between a country’s wealth and its spending on education. However, we can ask whether states invest in education because they have money or whether they have money because they invest in education. It’s a classic chicken-or-egg question. Which comes first: money or knowledge? The Work Foundation presents data that indicate knowledge gives countries a competitive advantage. For instance, knowledge-based industries (high- to medium-tech manufacturing, finance, business services, telecommunications, education, health) account for a great share of the Organisation for Economic Co‑operation and Development (OECD) countries’ GDPs. At the same time, the Knowledge Economy (KE) Index, which measures a country’s potential to use knowledge for economic development, shows that a country’s wealth correlates with its KE Index. You can check our list 10 Countries That Spend the Most on Military to see whether states which invest billions of dollars in their militaries also rank high by KE Index.
The second question that relates to a country’s investment in education is whether money guarantees knowledge. According to OECD data, money alone can’t buy a good education system, and among high-income economies, the amount spent on education is less important than how those resources are used. If we measure the successfulness of an educational system by OECD’s PISA test results, we see that students from countries that spend more than $100,000 USD per student from ages 6 to 15 (Luxembourg, Norway, Switzerland and the United States) show similar PISA performance as their peers from countries that spend less than half that amount per student, such as Estonia, Hungary and Poland. Students who excel on PISA tests come from countries that invest most money in teachers specifically — by hiring the best students to work as teachers and offering them higher salaries and greater professional status.
We found the 10 Countries That Spend the Most on Education per Student using OECD’s Education at Glance report which was published last year and which presents data for 2011. On average, OECD countries spend $9,487 USD per student annually from primary through tertiary education, and expenditure per student averages 27 percent of the GDP per capita in OECD countries. The largest share of money is used for funding core services (teachers’ salaries, construction and maintenance of school buildings, teaching materials, books and administration of schools) – 94 percent is spent on core services in primary, secondary and post-secondary non-tertiary education, while in tertiary education 32 percent of funds is allocated to research and development. Besides showing how much money is spent on education, on this list we also present countries’ ranks from the Knowledge Economy Index and PISA results from 2012.
10. Germany
Germany invested $10,904 USD per student, or 27 percent of the GDP per capita. The country allocated a lot of its funds for research and development (R&D) and ancillary services — more than $6,000 per student was spent on these services alone. Moreover, Germany is known for its highly successful dual educational programs, so it is no surprise that it spent $4,020 USD more per vocational student than general upper secondary student, which is the largest gap between funds for vocational and secondary education. Germany ranked 16th in PISA results with an average score of 514. When it comes to the potential to use knowledge for economic growth, Germany is one of two countries from this list which improved its KEI from 8.84 in 2000 to 8.90 in 2011, which puts the state 8th place in KEI.
9. Finland
Like Germany, Finland invested a lot of money in R&D and ancillary services, as well as in vocational training. Overall, the country spent just a little more than Germany per student ($10,905 USD) which accounted for 28 percent of its GDP per capita. Finland has one of the lowest student-teacher ratios, which might be the secret for its high PISA results – with an average score of 519, it is 12th overall. And even more importantly, Finland ranks #2 in KEI with 9.33.
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8. Belgium
Belgium invested $11,585 USD per student and thus allocated 29 percent of its GDP per capita on education in 2011. On the PISA test it ranked 15th with an average of 515. When it comes to money, Belgium can brag about its students’ ability to smartly use money, since only students from Shanghai, China had better financial literacy scores than young Belgians on the PISA test. Finally, along with Germany, Belgium is the only other country on this list which improved its KEI from 8.86 in 2000 to 8.71 in 2011.
7. The Netherlands
The Netherlands allocated $11,701 USD per student annually, which represented 27 percent of its GDP per capita. The country invested 1.5 times more in secondary than primary education which was the greatest difference regarding allocation of funds between these two educational levels among OECD countries. On PISA tests Netherlands ranked 10th, and its KEI was 9.11, 4th place overall.
6. Denmark
Denmark spent $12,136 USD per student in 2011, which accounted for 29 percent of its GDP per capita. This is the only country on our list which decreased expenditure per primary, secondary and post-secondary non-tertiary education between 2005 and 2011, mainly due to rising enrollment. Denmark was 22nd on PISA ranking, and it’s third for KEI with 9.16.
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5. Sweden
Sweden is fifth on our list 10 Countries That Spend the Most on Education per Student. The country invested $12,426 USD per student in 2011, allocating 30 percent of its GDP per capita. Unlike other countries on our list, Sweden spent less than 80 percent of total expenditure per student on core educational services. And with an average PISA score of 478 — below the OECD country average of 494 — Sweden finished last compared to other countries on this list. However, Swedes shouldn’t be worried about PISA results — their homeland ranks first in KEI with 9.43.
4. Austria
Austria spent $13,116 USD per student in 2011, or 31 percent of its GDP per capita. This is the country whose expenditure per tertiary student decreased by more than 14 percent from 2005 to 2011 because of increased enrollment. Austria ranks 18th on the PISA list with 506 and is last place in KEI compared to other countries on this list at #17.
3. Norway
Norway spent $14,288 USD per student, or 31 percent of its GDP per capita. Although Norway is the third country by spending on primary and secondary education, it ranked 30th for the PISA test with a below-average score. However, Norway can be proud of the fact that it’s one of few countries in which the proportion of top-performing girls is about the same as the proportion of top-performing boys. Moreover, it can boast fifth place in KEI.
2. United States
The United States spent $15,345 per student in 2011, which was 31 percent of its GDP per capita. This is the country which spent more than 49 percent of GDP per capita on a tertiary student, or in other words, more than $20,000 USD. In regards to primary and secondary education the United States occupies fourth and fifth place respectively according to OECD data. However, it seems that investments in education haven’t paid off — the US ranked below average on the PISA test, and with a 481 average score the country occupies a lowly 36th place. At the same time, America is 13th for KEI with 8.77. The US’s KEI index actually significantly dropped since 2000.
1. Switzerland
With expenditure of $16,090 USD per student, which is 31 percent of GDP per capita, Switzerland is the winner on our list 10 Countries That Spend the Most on Education per Student. Unlike the US, Switzerland’s investments in education paid off in PISA scores, where Switzerland ranks 9th — highest among the countries on our list. Moreover, the country occupies tenth place in KEI with 9.28. And perhaps most importantly, this is the country in which the greatest percentage of students reported being happy at school compared to others from our list.
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