We recently compiled a list of 25 Countries that Spend Most on Education per Capita, and in this article, we will discuss the top country that spends the most on education per capita.
The Link Between Education Spending and Academic Performance
The amount allocated to education spending is a key policy question for all governments, which is why there have been multiple studies on whether higher education spending produces beneficial outcomes. A 2023 study by Jung et al., titled ‘The Effect of Extra School Funding on Students’ Academic Achievements under a Centralized School Financing System’ evaluated the same in South Korea. The study discovered that additional funding for underperforming schools did result in academic improvement for some subjects. A 20% increase in financing decreased the number of below-average students in mathematics by 19.7%, science by 18.1%, English by 17%, and social studies by 16.1%. However, increased financing did not significantly affect students’ reading performance. The additional funding was utilized for various initiatives, including individual tutoring, after-school classes, and summer programs.
However, funding without proper planning and accountability achieves the opposite of the desired effect. Not every place results in improved academic performance when funding is increased. For example, Canada is one of the countries that spend the most on education, but a closer inspection reveals several discrepancies. When fiscal year 2012-13 is compared with fiscal year 2020-21, one of the highest percentage increases in public school spending occurred in Nova Scotia (42.7%). In contrast, the lowest occurred in Newfoundland & Labrador (7.9%).
However, students from the two performances didn’t perform much differently in the 2022 PISA examination, which is an international assessment of how good 15-year-old students are in reading, mathematics, and science. Both provinces came below the Canadian and the OECD average in mathematics, with Nova Scotia ranking seventh and Newfoundland & Labrador ranking tenth amongst all Canadian provinces. Both provinces ranked below the Canadian average in reading, with NS taking the sixth position and NL taking the ninth. Lastly, in science, NS and NL ranked eighth and ninth, respectively, with a difference of just one point among their average scores. The scores for reading and science were topped by the Alberta province, where spending increased only 15.1%.
Finally, the highest increase in spending from 2012-13 to 2020-21 occurred in Quebec (57.8%), but the province ranked below the national average in both reading and science. Furthermore, despite the increase in spending, the overall performance of the province decreased. From 2018 to 2022, Quebec’s average score in reading decreased by 18 points, whereas its score in science decreased by 25 points from 2015 to 2022. While PISA results are not the ultimate determiner of academic improvement, they give us one way of evaluating whether increased spending translates into improved performance, and the results for Canada are currently non-conclusive. So, while better spending can be leveraged for improved results, that does not always occur.
The Rising Cost of College
Even with governments increasing education spending, tertiary education continues to become more expensive than ever. In October 2023, the Guardian reported that in Australia, the tuition costs for certain humanities courses increased as much as 140% over the past five years. Despite rising costs, Australia is still one of the best countries for getting a college education. In 2021, a report from the Georgetown University Center on Education and the Workforce revealed that from 1980 to 2020, there had been a 169% increase in the average cost of tuition, accommodation, dining, and fees for an undergraduate degree.
However, over the same four decades, the average earnings for people aged 22 to 27 increased only 19%. This showcases a disproportionate rise in the cost of education compared to average income. It is also concerning, as both Australia and the United States have some of the best education systems in the world. Due to the rising costs, these education systems have become inaccessible to a large number of the population.
Offering Affordable Alternatives
As college becomes more unaffordable, people are turning to unconventional options for tertiary education that might allow them to acquire degrees at a lower cost. 2U, Inc. (NASDAQ:TWOU) is one such company that partners with colleges and universities to offer online degree programs. According to its 2022 Transparency and Outcomes Report, 2U, Inc. (NASDAQ:TWOU) provided over 4,000 digital programs in 2022, which included 163 degree programs, 264 executive education programs, and 3,371 open courses, among others. Of its 163 degree programs, 86% were either cheaper than their campus counterparts or at the same price. Throughout the entire year, 2U, Inc. (NASDAQ:TWOU) managed to build a learner network of 73 million people.
The company has also partnered with nine institutions to offer degrees priced under $26,000, allowing people to seek affordable options. For example, through this platform, Boston University offers an MBA and a Master’s in Public Health Degree, both of which cost $24,000. The MBA program had scaled to 1,700 students by 2022, which is when BU decided to launch the MPH program. 2U, Inc. (NASDAQ:TWOU) also engages in ‘Access Partnerships,’ which are agreements with non-profit universities and other organizations to offer free or extremely cheap tech skill programs. These are meant to provide job-relevant skills to people who belong to marginalized communities. An example is the Tulsa Community College, which partnered with the company to offer free cybersecurity and data science boot camps.
So far, in 2024, the company has taken several steps to grow its portfolio. On May 16, 2U, Inc. (NASDAQ:TWOU) announced an expansion of its partnership with Pepperdine University, offering six new programs in the fields of education and healthcare. On the same date, the company also announced that it had facilitated 100,000 job placements for students from its healthcare and education degree programs. On February 1, the company announced a new partnership with the University of Surrey to launch 15 online master’s degrees and 15 online professional certificate programs. All of these announcements show that not only is the company dedicated to growing its partner network but also to ensuring the career success of its students.
Companies like 2U, Inc. (NASDAQ:TWOU) do make it easier to get an education by significantly reducing the costs associated with educational programs. However, it doesn’t negate the importance of government spending in this domain. With this context, let’s take a look at the country that spends the most on education per capita.
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Our Methodology
In order to compile a list of 25 countries that spend the most on education per capita, we consulted the Insider Monkey Global Education Index. Our index sourced per capita expenditure data from the UNESCO Institute of Statistics. For countries whose data was missing, the values were calculated through correlation. You can look at the Insider Monkey Global Education Index for detailed insight into the methodology and subsequent calculations.
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The Country that Spends Most on Education Per Capita
Liechtenstein
Per Capita Education Spending (2023): $12,324
Liechtenstein ranks number one on our list of countries that spend the most on education per capita. The country spends 6.24% of its GDP on education. The country has a limited tertiary education sector, but there are several loan options for students, with the overall fee structure being relatively low compared to other countries. Students can expect to pay around 4,000 Euros yearly for a higher education degree. The country has a literacy rate of 100% and has been commended by many for its education infrastructure. At its preprimary and primary level, the country has a student-to-teacher ratio of 8, one of the world’s lowest. Smaller class sizes are considered better for optimal learning, especially in lower grades.
To learn about other countries with high education per capita spending, check our detailed report on 25 Countries that Spend Most on Education Per Capita.
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Disclosure: None. This article is originally published on Insider Monkey.
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