The Mechanics of Progress in Education: Evidence from Cross-Country Data

Argues that, so long as educational coverage is not yet universal, a more efficient strategy for educational development is to emphasize continued expansion of coverage rather than a rapid reduction in the pupil-teacher ratio. In the long run, lower levels of educational attainment among tomorrow's adults is likely to diminish learning achievement among tomorrow's children.

As countries grow rich, education improves in many ways. The sector enjoys more resources for education per school-aged child, not primarily because of bigger budget allocations or an easing of the demographic burden on the system, but because teacher salaries decline substantially relative to the per capita GNP. The extra resources enable countries to expand coverage and reduce the pupil-teacher ratio, with the latter receiving increasing emphasis during the past 20 years. The implicit tradeoff against coverage is inefficient (and inequitable), particularly in countries where large portions of the population still have no access to basic education. Mingat and Tan explore differences in education in rich and poor countries by first systematically documenting the relationship between per capita GNP and various indicators of educational development. They then exploit a simple accounting identity relating the availability of resources to their expenditure, to clarify the sources of rich countries' advantage in education. Data for a sample of 125 countries in 1993 confirm the expected favorable relationship between per capita GNP and each of the following dimensions of educational development:

• The sector context (as reflected by the demographic burden on the education system, the government's fiscal capacity, and so on).
• The production of education services, including such factors as public spending on education and the composition of spending.
• Education outcomes, in terms of coverage and student learning.
• Efficiency of sector operations.
• Equity in access and distribution of public spending on education.

One appealing explanation for why richer countries achieve better results is that they have more resources for their education systems. But bigger budget allocations to education contribute relatively little to differences in resources. Lighter demographic burdens in richer countries is also a relatively modest factor. By far the most important factor is the decline of teacher salaries relative to per capita GNP, which accounts for at least half of any educational advantage at all stages of economic development. The extra resources for education associated with income growth allows a country to expand enrollments and improve classroom conditions by reducing the pupil-teacher ratio. Early in income growth, countries allocate more of the extra resources to expand coverage; later they shift toward reducing the pupil-teacher ratio.[author]