Education Financing: Key to Avoiding Worst Pospandemic Consequences

The issue of education financing must be discussed and included in the public agenda because inaction or inertia will not mean preservation of the status quo but greater exclusion and deterioration of the social and productive fabric

When the pandemic reached Latin America and the Caribbean, the region already had a severe drop in public education spending: in 2017, it was 17.6% and in 2019 it fell to 14.6%. COVID-19 worsened the education funding situation as countries had to reallocate public sector resources to address the health crisis and also had to increase social assistance due to the economic crisis. All this left the education sector with even fewer resources.

The decrease in educational funding is reflected in substantial deficits in school infrastructure, teacher quality, learning assessment and the use of technology to improve learning. 

Some examples that illustrate this are:

• 20% of schools in the region lack basic hygiene services
• schools in more vulnerable contexts have teachers with fewer skills for incorporating digital devices into their teaching (55%) compared to 68% of schools in more advantaged settings
• In the countries in the region that participated in PISA 2018, an average 69% and 52% of young people were unable to perform basic tasks in mathematics and literacy, respectively.
• only 22% of under-17s in public schools in vulnerable socioeconomic contexts have access to internet and 19% to a computer at home

The serious consequences of low investment in education may not be apparent now but will be seen in a few years, and the impact will be on the quality of our lives and those of future generations.

Today more than ever, it is essential we ask ourselves how we can avoid these consequences before it is too late. The answer lies mainly in education financing, one of the most powerful instruments we have at our disposal to change this situation.

 How can we invest more and better in the recovery of the education sector?

To know how to invest properly, we must first understand the gap between what is currently being invested and the needs that arise from a twofold demand:

a) the resources that were needed before the health crisis

b) those that will be required due to its effects on education systems

The first recommendation is to increase or maintain the share of public spending on education so that it is at least between 4% and 6% of GDP. An estimated $23,087 million is needed in the short term to re-equip schools and ensure a safe return to classes. On average in the region, this is equivalent to 0.21% of GDP and just over 5% of public spending on education.  

However, long-term needs are greater. Our countries will face the double challenge of recovering what has been lost since 2017 and of increasing resources to expand and improve their education systems.

Exercises carried out by the Education Division of the Inter-American Development Bank (IDB) show that the total investment required for Latin America and the Caribbean over the next ten years will be just over $221 billion (2.05% of GDP). This figure includes spending on infrastructure and equipment that will be required only once. If this is excluded, the resources needed to improve student retention and learning in our education systems amount to $127 billion or, in other words, 1.2% of regional GDP. This could take public spending on education in the region to 5% of GDP.

In total, an average of $1,200 per student needs to be added to bring the region closer to the level of the highest performing countries. But it is not only more investment that is needed. We also need to invest better. It is very important to bear in mind that the distribution of resources also matters for the equity and quality of education. Insofar as the investment does not reach those who most need it and, on the contrary, goes to more advantaged sectors, existing inequalities will increase.

At the same time, spending efficiency is crucial for the achievement of equity goals. When resources are scarce, needs are great and inequality is high, spending efficiency is imperative: wasted resources mean fewer opportunities for the most disadvantaged. For this reason, the issue of the financing of education must be included in the public agenda and discussed because inaction or inertia will not mean maintenance of the status quo but greater exclusion and deterioration of the social and productive fabric.

What can the region’s countries do to achieve the investment required to cover the needs of the education sector? Share your comments and learn more in our publication How to reboot education post-pandemic. Delivering on the promise of a better future for youth.