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By Jackie Kraemer

In the most recent issue of the OECD’s Education at a Glance 2013, which compares data on education systems in member countries, there is much new data to suggest that there are real payoffs to investments in education.  Indeed, OECD reports that the average wage difference between earnings from employment of low skill and highly educated workers increased from 75 percent in 2008 to 90 percent in 2011.  Countries with more developed vocational education systems (VET) also seemed to weather the economic recession better, with less of a rise in youth unemployment than those with less developed systems.  The report cites Austria, the Czech Republic, Germany and Luxembourg as having less of a rise in youth unemployment over the last few years than many other OECD nations.

Data on the United States, though, raises some questions about the types of investments the U.S. has made.  The U.S. is again among the top spenders on education.  The data, from 2010, shows that for all levels of education combined and including core and ancillary services, the U.S. spends more per student than any of the other countries surveyed as shown in the chart below.

Annual Expenditure Chart

Looking more closely at what systems spend at each level of education, the U.S. is among the top spenders on primary and secondary education, but it is in higher education where the U.S. outspends its peers most significantly.

The three charts below compare educational spending at the primary, secondary and tertiary levels in the OECD member countries and their partners such as Brazil, China, India and Russia.  On tertiary or higher education, the U.S. spends nearly $2,000 more per student than any other nation.

Primary Spending Chart

Secondary Spending Chart

Tertiary Spending Chart

The high U.S. spending rate on higher education includes significant private funding, as seen in the chart below.  In fact, nearly 64% percent of U.S. expenditures on tertiary education come from private sources such as tuition, whereas less than 10% of spending on tertiary education comes from private sources for some of the other top spenders such as Denmark, Sweden and Norway.  Notably, top performers Japan and Korea have high percentages of private funding similar to those in the U.S. but they spend far less than the U.S. per student overall.

Public and Private spending

Despite its heavy spending on education, U.S. educational attainment remained average.  For 2011, the U.S. upper secondary graduation was 77.44 percent, slightly below the OECD average of 83 percent.  Canada, Finland, Korea, and Japan were all significantly above the OECD average; Japan the highest at 96 percent.  (Table A2.1a)

OECD has added a new measure for analyzing tertiary education attainment in this version of Education at a Glance 2013.  They now have included data for tertiary completion rates, which measure the percent of students who enter tertiary education who graduate with a degree.  The chart below shows only 52 percent of students in the U.S. who enter tertiary education complete their program and earn a degree.  This is far below rates in Japan, Australia and Denmark that are over 80 percent.  The completion rate is also broken down by type of tertiary education. Type A programs are theory-based and at least three years, the equivalent of four-year colleges in the U.S., and type B programs are shorter programs focused on technical or occupational skills, the equivalent of community colleges in the U.S.  According to the OECD, the completion rate for type B programs in the U.S. is 18 percent.  This is the lowest rate among the countries studied and means that community colleges in the U.S. are not graduating students at the rates that other countries are.

As part of this analysis, OECD also looked at entry rates (defined as percent of any age cohort that enters) for tertiary education and compared them with completion rates.  Japan, for example, has a very low entry rate into tertiary education but a very high proportion of those who enter graduate.  Entry into tertiary education is competitive in Japan and there is a very low dropout rate. Other countries like the U.S. and New Zealand, have very high entry rates and much lower completion rates.

Tertiary Graduation Rate Chart2

The new data in Education at a Glance 2013 raises questions for the U.S. about the efficiency of a post-secondary technical and higher education system with such a high per student cost, including tuition paid by students, that produces so few graduates in a timely manner.