A comparative international analysis of public spending on higher education : impact on tertiary enrolments

M.Com. (Economic Development and Policy Issues)This study aims to examine the relationship between public funding on tertiary education in developing countries and the level of student enrolments. The intuitive economic expectation is that an increase in public education funding should lead to an increase in student enrolments. This study finds this general expectation to be true for only the primary and secondary education sectors, but not for the tertiary education sector. By using a sample of 39 randomly selected developing countries from different parts of the world, this empirical study finds that public expenditure on tertiary education has an insignificant and in some cases a negative relationship with student enrolments at the tertiary education level. The study interestingly finds public expenditure on primary and secondary education sectors to have more significant and positive relationship with tertiary student enrolments. The study also confirms earlier research arguments that governments in developing countries spend proportionately more on tertiary education than on primary or secondary education as compared to developed nations. This study finds that public education expenditure is three times as much, or more, on tertiary education than on primary or secondary education. However, despite this relative public overspending on the tertiary education sector in comparison to primary and secondary education sectors, tertiary student enrolment appears not to have a significant relationship with public expenditure, whereas the relationship is significant and positive in the case of both secondary and primary education sectors where public expenditure is ironically much less. The study further finds that the negative relationship between public expenditure on tertiary education and student enrolments is possibly caused by the rigorous global emphasis on implementing austerity measures across economies. At the same time, developing countries are experiencing a high demand for tertiary enrolment due to a rapid increase in population, improved adult literacy, worsening unemployment and other factors