Abstract
This is a study of financial disparities in primary and secondary education in OECD countries that have a relatively large population and a school finance system with decentralized features. These countries include the United States, Britain, Australia, Spain, Canada, and Japan. There are two major research questions: What are the trends in disparities in per-student education spending during the 1990s and early 2000s period? What government policies or factors may explain these trends? Common statistics such as the coefficient of variation, the restricted range, the federal range ratio, and Gini coefficient are used to measure disparity in per-student spending. Sub-national data for this study are obtained from published government sources. There are three major findings: (1) there was a general trend towards a reduction in inequity in per-student education spending in these countries; (2) this equalization trend was associated with a variety of financing policies implemented in these countries; and (3) a larger share of regional government funding relative to the share of local government funding, intergovernmental transfer, and the design of school funding formulas are crucial factors for enhancing equity in education funding. The policy towards centralization in education finance system also appears to be an important factor in financial equalization.
Highlights
In this study, several factors in the process of resource mobilization and resource allocation are examined to ascertain their impact on financial disparity (Tsang & Ding, 2007; Baker et al, 2007)
There are three major findings: (1) there was a general trend towards a reduction in inequity in per-student education spending in these countries; (2) this equalization trend was associated with a variety of financing policies implemented in these countries; and (3) a larger share of regional government funding relative to the share of local government funding, intergovernmental transfer, and the design of school funding formulas are crucial factors for enhancing equity in education funding
This study presents a cross-national analysis of financial disparities in basic education in populous OECD countries with an education finance system involving more than one level of government and the use of intergovernmental education grants
Summary
Common statistics such as coefficient of variation, the restricted range, the federal range ratio, and Gini coefficient are used to measure disparities in per-student spending. (1) Restricted Range: The difference between the districts in the 95th and 5th percentiles ( R95 R05) of the per student expenditure distribution It eliminates potential outliers on both sides of the distribution that could influence the calculation of the range. (2) Federal Range Ratio: The ratio of the 95th to the 5th percentile values of per student expenditure ( R95/ R05) In this way, instead of evaluating absolute differences between these two values (restricted range), it calculates the “relative difference” between them (how many times higher is the 95th percentile with respect to the 5th percentile). The strengths of these indicators are (i) Easy to calculate; (ii) Understandable; (iii) Elimination of potential outliers. (4) Gini coefficient: It can be deduced from Lorenz Curve, which is a curve that illustrates the spending distribution It has a range between zero (perfect equality) and one (perfect inequality). One cannot say that financial systems with smaller disparity indicators perform better than financial systems with larger disparity indicators, because some systems pay more attention to vertical equity, efficiency, and financial neutrality, which might conceal the horizontal equity level due to the diverse characteristics of student bodies in different regions across countries
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