The Adequacy of Public Expenditure on Education and the Needs Post-COVID-19 : April 2023

Education needs to recover the space it lost in national budgets because of COVID-19. Many LICs and LMICs decreased the prioritization of education spending with the onset of COVID-19. Half of these countries reduced their annual spending on education in 2020, compared to 28 percent in 2019. Emerging evidence suggests that after falling in 2020, the share of education in national budgets of LICs and MICs recovered in 2021 but by 2022 it remained below its 2019 pre-pandemic level. Meanwhile, many HICs protected education shares over that period and some even increased resources specifically for learning recovery. Education financing needs to expand to ensure sufficient per-capita spending to meet national education goals. Given variation across countries, common international benchmarks on education spending should not be used deterministically to assess the adequacy of financing. Spending per school-age child, the most accurate indicator of financing adequacy, averages US53 dollars in LICs, US318 dollars in LMICs, US980 dollars in UMICs and US7,800 dollars in HICs. These stark differences surpass differences in countries' living standards and costs of delivering education services. Many LICs and LMICs that meet common international benchmarks on education spending (such as 4-6 percent of GDP or 15-20 percent of public budgets) still spend very little per school-age child due to their small state budgets and large young populations