Principal investigator: Viviane Pires Ribeiro
Article title: Estimating Private Spending on Education in Brazil
Article authors: Naercio Menezes Filho and Diana Fekete Nuñez
Location of the intervention: Brazil
Sample size: 10 Education Products
Sector: Education
Type of Intervention: Estimate of private spending on education
Primary variable of interest: Private spending on education
Evaluation method: Other – Analysis of Brazilian household spending
Evaluation Context
Investments in education can increase returns in several dimensions, whether in better job opportunities, higher individual income, better quality of life, and even improved national economic development and growth. Most countries have both public and private education systems, and it is up to families to decide which is most suitable for their children's education. In Brazil, for example, many families prefer private schools over public ones because they place little value on the public education system, which is considered insufficient to prepare individuals for the job market and for professional and personal success. Therefore, the private education market emerges to meet the needs of families to provide better quality education for their members, but this choice often requires a significant financial outlay.
Intervention Details
Several studies analyze public spending on education in Brazil, but few delve deeper into private spending. Menezes-Filho and Nuñez (2012) estimate, for the first time in the literature, total private spending on education in Brazil, using microdata on household spending from the Family Budget Survey (POF) for the years 2002/2003 and 2008/2009. The POF provides information on the composition of household budgets, analyzing consumption habits, spending allocation, and income distribution among families. This survey is conducted over a 12-month period to obtain information on annual, quarterly, monthly, or daily spending, depending on the type of expenditure.
Subsequently, the authors analyzed the relationship between these expenditures and Brazil's Gross Domestic Product (GDP) at two points in time, making comparisons with expenditures in other countries. Annual GDP figures were obtained from the Ipeadata website for the years 2003 and 2009. Data on the percentage of public spending on education as a percentage of Brazil's GDP were obtained from the website of the National Institute of Educational Studies and Research Anísio Teixeira (INEP), and data on private and public spending in various countries were obtained from the Organisation for Economic Co-operation and Development (OECD).
Methodology Details
To calculate total private spending on education in Brazil, the authors used the "Individual Expenditure" record from the POF (Household Budget Survey), corresponding to education expenditures. These expenditures were divided into ten categories: Textbooks; Language courses; Extracurricular courses; University entrance exams; Postgraduate studies (Master's, Doctorate, and Specialization); School supplies (teaching materials, transportation, uniforms, school meals, food); Regular courses (preschool, daycare, nursery, primary school, secondary school); Private tutoring; Other (school fees and documents, field trips, housing rental, graduation costs, congresses and seminars); and Regular courses (higher education).
The calculation of total private spending on education was carried out by summing the spending on all ten products mentioned above, and then multiplying it by the POF expansion factor. Thus, Menezes-Filho and Nuñez (2012) obtained the individual expenses of Brazilian families on each product and the sum of all private spending on education in Brazil. On the other hand, the relationship between private spending on education and Brazilian GDP was estimated by the ratio between total spending on education in the POF and annual GDP.
Results
The results of the analysis of data on private spending on education in Brazil show an increase in the total amount spent on private education (in nominal terms) between 2003 and 2009. This increase was approximately 25%, while accumulated inflation was 39%, meaning that the increase in spending did not keep pace with inflation during the period. In this scenario, most of the spending went towards paying for regular private courses, divided between basic and higher education spending. Spending on basic education represented 33% of total private spending in 2003 and declined to 30% in 2009. Spending on higher education, on the other hand, went from 36% to 35% of spending, remaining relatively stable. Between 2003 and 2009, there was a significant increase in private spending on postgraduate studies. These expenses increased from R$ 1,4 billion in 2003 (at 2009 prices) to R$ 2,4 billion in 2009, which practically represents a doubling of the total expenditure on this item.
Regarding private spending as a percentage of GDP, the data showed that in 2003, the national GDP was approximately R$ 1,7 trillion and spending on education totaled around R$ 32 billion, which corresponds to 1,9% of GDP. In 2009, there was a decrease in this percentage. As private spending on education was R$ 40 billion and GDP was R$ 3,1 trillion, the percentage of spending on GDP was 1,29%. A comparison with other countries shows that private and public spending is higher than the average of OECD countries. Spending on education is not related to the average school performance of countries, as measured by the latest results of the Programme for International Student Assessment (PISA).
Lessons in Public Policy
An analysis of Brazilian families' private spending on education showed that families invest heavily in education, not only in regular courses but also in extracurricular courses and postgraduate studies. Between 2003 and 2009, there was a nominal increase in private spending on education, but a reduction in real terms and as a proportion of GDP. Furthermore, there was an increase in public spending relative to GDP. Compared to the countries analyzed in the OECD study (2010), Brazil's rate of public investment relative to GDP is high, but private spending is average compared to the other countries analyzed. In total, spending is relatively high, but this does not translate into good academic performance by its students, as measured by their performance in the 2009 PISA mathematics exam.
Menezes-Filho and Nuñez (2012) emphasize that it is of great importance to study the private spending of Brazilian families on education, so that it is possible to compare the quality of public schools with private schools and the costs and benefits generated for families by the two types of system.
ReferencesMENEZES-FILHO, Naércio A.; NUÑEZ, Diana Fekete. Estimating private spending on education in Brazil. Policy Papers, v. 3, 2012.
