Decoding education expenditure of world’s top 10 populous countries

Education stands as the bedrock of societal progress, shaping the future of nations and individuals alike. The research below stretches on how the top 10 most populous countries are investing in education, considering their population size and economic strength. From India's ambitious strides to China's sustained commitment and the United States' prioritization, each nation's approach reveals unique insights into the intersection of education, demographics, and economics. Through this analysis, we aim to unravel the dynamics driving educational investment and underscore its critical role in fostering prosperity and competitiveness on a global scale.

Rising investment trends in Indian education

India's investment in education has seen a notable rise, with expenditure reaching 6.83 trillion INR in 2017, up from the previous year's 5.99 trillion INR. This reflects a concerted effort to bolster the nation's educational infrastructure and opportunities. In the recently announced budget for the fiscal year 2023-24, around INR 1.13 trillion has been allocated for education, signalling the government's focus on building a knowledge-driven economy. The budget also demonstrates a 13 percent increase in education spending compared to the previous year, with significant boosts directed towards both school and higher education. Despite setbacks caused by the Covid-19 pandemic, education funding has rebounded, exceeding pre-pandemic levels. However, it's important to recognize that the national education budget doesn't encompass all education spending, as states also contribute. Efforts are needed to align education expenditure with the ambitious goals set out in the National Education Policy 2020, aiming for a 6 percent allocation of GDP.

Analysing China’s governmental education spending patterns

China's government expenditure on education amounted to 517.400 billion RMB in December 2023, marking an increase from the previous month's figure of 384.400 billion RMB in November 2023. This data, updated monthly, has been tracked from January 2007 to December 2023, totalling 192 observations. Throughout this period, the average monthly expenditure on education by the government stood at 184.906 billion RMB. The highest recorded expenditure occurred in December 2020, reaching 568.400 billion RMB, while the lowest was observed in January 2007 at 35.740 billion RMB. The Ministry of Finance reports this data, which remains active in CEIC.

US’ education-investment dynamics

The United States Department of Education saw significant score of approximately 639.37 billion U.S. dollars in 2022, marking a notable increase from the previous year. However, projections indicate a decline in these outlays by 2028, with expectations set at 161.1 billion U.S. dollars. Over the course of the 20th century, the U.S. witnessed a noteworthy evolution in education expenditure, with the percentage of GDP allocated to education rising from a mere 1% at the century's outset to 6.1% in 2017. This figure surpasses the average of 4.9% observed across the 35 member countries of the Organization for Economic Cooperation and Development (OECD). Notably, the U.S. dedicates 3.6% of GDP to elementary and secondary education and 2.6% to postsecondary education, ranking 6th among OECD countries in terms of the highest percentage of GDP allocated to education. Projections for Fall 2028 anticipate total enrolment in public elementary and secondary schools to reach 51.419 million, with per-pupil current expenditure projected to amount to $13,800, reflecting a 12% increase in expenditure from 2015-16 to 2028-29. Furthermore, it is anticipated that there will be a 7% increase in American Indian/Alaskan Native students, an 8% increase in Hispanic students, a 20% increase in Asian/Pacific Islander students, and a 51% increase in multiracial students in public elementary and secondary schools by 2028, highlighting the growing impact of public education financing on minority communities.

Indonesia quests for ‘innovation’

Indonesia's recently unveiled National Budget for 2024 showcases a substantial uptick in allocated funds for education, with an almost 20 percent increase compared to the previous year. The budget earmarks IDR 660 trillion (GBP 33 billion) for education in 2024, a notable rise from the IDR 552 trillion (GBP 28 billion) allocated in 2023. This significant allocation represents close to 20 percent of the total National Indicative Budget (RAPBN) for 2024, amounting to IDR 3.304 trillion (GBP 169 billion). The funds are slated to be directed towards several key areas aimed at enhancing the educational landscape in Indonesia, including infrastructure development, improvement of school quality, expansion of scholarship programs, elevation of standards in higher education institutions, and bolstering research and innovation efforts across the nation.

Pakistan balances priorities amidst economic constraints

Pakistan's decision to allocate significant funds towards education, despite economic challenges, is a commendable move. With a population exceeding 245 million, investing in education is crucial for equipping citizens with the skills and knowledge necessary for personal growth and national development. The allocated budget, including Rs 65 billion for the Higher Education Commission and Rs 5 billion for scholarships, demonstrates a commitment to addressing the educational needs of the population. Moreover, setting aside Rs 10 billion for laptops and sports initiatives shows foresight in leveraging technology and extracurricular activities to enhance the learning experience. By prioritizing education spending, Pakistan is investing in its future generations, paving the way for a more prosperous and innovative society.

Nigeria’s education budget: UNESCO recommendations vs. reality

Nigeria's President Bola Tinubu has proposed an increased allocation for the education sector in the 2024 budget compared to the previous year. However, this increase falls short of the recommendations set by UNESCO, which suggests that between 15 to 20 percent of the annual budget should be allocated to education. Despite the proposed budget being less than seven percent for education, it is still lower than the sector's 8.8 percent spending in the current year. Tinubu's 'Budget of Renewed Hope' for 2024, totalling N27.5 trillion, includes N1.54 trillion allocated to the education sector, representing 6.39 percent of the total budget. This allocation, while failing to meet UNESCO's recommendation, still ranks education alongside defence and security (11.8 percent) and health (5.03 percent) as one of the sectors with higher allocations. However, as there were no specific details provided about the budget for the fiscal year 2025, it remains uncertain if adjustments will be made to meet UNESCO's suggested allocation percentage for education.

Brazil’s education investment: targets and outcomes

Brazil's allocation of its national income towards education stands out significantly compared to other Latin American (LATAM) and OECD countries, with public spending on education institutions comprising 5.1% of Brazil's Gross Domestic Product (GDP) in 2017, surpassing the regional and international averages of 4.3% and 4%, respectively. This commitment to education is further emphasized by Brazil's National Education Plan (Plano Nacional da Educação, PNE), which sets a target for government investment in public education to reach 10% of GDP by 2024. Moreover, the Federal Constitution mandates minimum levels of education expenditure by states and municipalities, with the federal government previously required to invest at least 18% of its revenues in education until 2017. While these financial goals and requirements have driven increased investment levels in education and other social sectors, Brazil's focus on expenditure targets, divorced from considerations of learning outcomes, may contribute to resource inefficiencies. Over the period from 2000 to 2015, the share of public expenditure on primary to tertiary education as a percentage of total government expenditure rose from 9.1% to 14.3%, reflecting a growing prioritization of education spending. However, amidst an economic crisis, a 2016 constitutional amendment was passed to limit non-interest spending across the public sector, establishing a floor for education and health expenditure equivalent to 2017 levels indexed to inflation, which is expected to stabilize expenditure in the education sector in the foreseeable future.

Bangladesh focuses on ‘long-term’ sustainability

In the fiscal years 2022-23 and 2023-24, Bangladesh saw some significant changes in how much money was allocated to education. Initially, in 2022-23, they set aside BDT 81,449 crore, which was about 12.0 percent of the total budget. But then, in a revised budget, they lowered it to BDT 70,507 crore, which was around 10.7 percent of the total budget. However, for the next fiscal year, 2023-24, they upped the ante, allocating BDT 88,162 crore, which accounted for 11.6 percent of the total budget. This marked an increase of 8.3 percent compared to the previous year's budget and a whopping 25.1 percent compared to the revised allocation. The lion's share of this went to the Secondary and Higher Education Division, with significant sums also allocated to the Ministry of Primary and Mass Education and the Technical and Madrasa Education Division. This demonstrates a clear focus on improving educational infrastructure and quality across different levels of education. Various activities have been outlined to achieve medium-term targets, including teacher recruitment, classroom construction, stipend programs, and the introduction of ICT-based education.

Russia's misguided priorities

Russia's budget priorities for 2024 are alarming and indicative of its aggressive militaristic agenda. By allocating a staggering 6 percent of GDP to military endeavours, surpassing social spending for the first time, the Kremlin is blatantly disregarding the urgent needs of its citizens. This disproportionate emphasis on warfare comes at the expense of neglected sectors like education and healthcare, exacerbating social inequality and hindering long-term economic development. Such skewed priorities not only betray the government's duty to its people but also perpetuate instability both domestically and internationally. It's imperative for Russia to reconsider its misguided allocation of resources and prioritize the well-being and prosperity of its citizens over militaristic pursuits.

Mexico’s educational budget: impact and concerns

The recently approved budget, signed into law by Governor Michelle Lujan Grisham, reflects an 8% increase in spending compared to the previous fiscal year, amounting to an additional $394 million allocated for various educational endeavours. These initiatives include funding for literacy programs, teacher training, retention programs, school meals, community school initiatives, and career technical education. However, despite these increases, educators and advocates express dissatisfaction with certain aspects of the budget. School staff members will receive average pay raises of 3%, falling short of initial proposals for 4% or 6% increases. Additionally, a plan to establish a Tribal Education Trust Fund failed to materialize during the legislative session, and funds were not allocated for bilingual and multicultural initiatives, much to the disappointment of State Representative Derrick Lente. Despite these setbacks, the budget includes several noteworthy allocations for the upcoming school year. These include $86 million for literacy initiatives aimed at expanding structured literacy training and summer programs for students, $41 million for universal free school meals, $59 million for community schools, and $15 million for pay differentials to recruit and retain special education positions. Furthermore, tens of millions of dollars are earmarked for educator fellowships, student teaching posts, and other teacher preparation programs. However, despite these significant investments, concerns remain about the relatively modest 3% pay raises for school personnel, especially given previous years' increases and the substantial funding available this year. The budget also reflects previous legislative actions, such as increasing base teacher pay in 2022 and implementing 6% average raises the following year. In light of the record-high funding available this year, advocates express disappointment over the relatively modest pay raises, emphasizing the importance of consulting with educators when making policy decisions.

Summarizing the key demographic and economic indicators and % of GDP (as per World Bank data) spent on education for the top 10 most populated nations:

India and China lead in population, hinting at their huge workforce and consumer base. However, while India's nominal GDP is substantial, its PPP GDP lags behind China's, suggesting some developmental hurdles. The United States stands out with its massive GDP figures despite a smaller population, showcasing its economic prowess. Other nations like Indonesia, Pakistan, Nigeria, Brazil, Bangladesh, and Mexico display varying levels of economic development, each with its own set of challenges and growth prospects. Russia's inclusion underscores the importance of geopolitics in economic performance. Overall, this comparison sheds light on the diverse dynamics of global economies, offering valuable insights for policymakers and researchers alike.

When scrutinizing the allocation of resources towards education in relation to population size and economic prowess among the top 10 most populous nations, discernible trends emerge. India, for instance, demonstrates a concerted effort to bolster educational infrastructure despite its substantial population and commendable nominal GDP figures. Nevertheless, the challenge lies in ensuring the efficacy of these investments, especially in light of India's PPP-adjusted GDP, which suggests potential developmental hurdles. Conversely, China exhibits a sturdy commitment to education, leveraging its formidable economy and expansive population to sustain consistent investments in this sector. Similarly, the United States, though boasting a smaller populace, prioritizes education significantly, underlining its dedication to nurturing a skilled workforce and maintaining economic competitiveness. Other nations such as Indonesia, Brazil, Bangladesh, and Mexico are also making strides in education relative to their economic capacities. Notably, Pakistan and Nigeria, despite facing economic constraints, allocate considerable portions of their budgets to education, acknowledging its pivotal role in fostering development. However, Russia's disproportionate focus on military expenditure at the expense of education raises concerns regarding its long-term socioeconomic sustainability.