Efficiency of Spending on Education in Portugal

Efficiency of spending on education in Portugal

Luiza Corrêa de Mello Ministry of Finance - Portugal Overview of the presentation

• Synopsis of the education and training system • Education in Portugal: an overview • Secondary education in Portugal: an overview • Cross-country studies on efficiency of education • Studies on efficiency of education in Portugal • Recent reforms in education Table 1. Synopsis of the education and training system

COMPULSORY EDUCATION

1234 56 7 89 101112 1 2 3 4 56 Years of study SECONDARY BASIC EDUCATION HIGHER EDUCATION(1) EDUCATION

From the From the From the From the From the UNIVERSITY EDUCATION age of 3 age of 6 age of 10 age of 12 age of 15 Master degreeMaster GENERAL Bacharelato PHD COURSES

PRE- 2nd TECHNOLOGICAL Licenciatura SCHOOL 1ST CYCLE 3rd CYCLE CYCLE COURSES EDUCATION POLYTECHNIC EDUCATION SPECIALISED ARTISTIC COURSES Bacharelato

Licenciatura From the age of 15 Vocational courses Vocational courses

Educational and vocational Educational and courses vocational courses From the age of 18 POST SECONDARY EDUCATION Recurrent education Recurrent education

Apprenticeship Apprenticeship Technological Guidance system system specialisation Up to the age of 25 courses From the age of 18 RVCC System(2) RVCC System(2)(3) Educational and vocational courses for adults EV Courses Adults(3)

1. Licenciatura corresponds to a bachelor degree; the Bacharelato which is part of the cycle is awarded after 3 years. Under the European harmonised system, introduced as from 2006-07, the first cycle (Licenciatura) will last 3 years, the Master degree (Mestrado) an additionnal 1 or 2 years, followed by a third cycle for Doctorate. 2. RVCC: Recognition, Validation and Certification of Competences. 3. At the secondary level, these modalities will be functioning as from the 2nd quarter of 2006. Source: Ministry of Education. Education in Portugal: some indicators

Education in Portugal: enrolment rates 1994/95 1999/00 2003/04 2004/05 Enrolment rates, excluding overaged students (%) pre-primary education 53,8 71,6 76,9 77,2 basic education first cycle 100,0 100,0 100,0 100,0 second cycle 86,2 88,2 87,3 86,8 third cycle 78,8 84,8 82,8 83,0 secondary education 52,4 59,6 58,8 60,2 Source: Ministry of Education

Education - Portugal and OECD average: some resource indicators pre-primary primary lower secon- upper secon- education education dary education dary education Expenditure per student a) in US dolars (PPP adjusted) Portugal 4489 4503 6158 6022 OECD average 4508 5450 6560 7580 b) as % of GDP per capita Portugal 25 26 35 34 OECD average 18 20 23 28 Ratio of students to teaching staff Portugal 16,5 11,1 10,0 7,3 OECD average 14,8 16,9 13,7 12,7 Source: OCDE (2006) Secondary education in Portugal: some enrolment and resource indicators

OECD average 1994/95 1999/00 2003/04 2003 Students enroled 457 194 417 705 382 212 - by school nature (%) public schools 87,5 84,9 82,4 79,5 private schools 12,5 15,1 17,6 20,5 by courses (%) general education 82,0 87,1 79,5 - recurrent education 18,0 12,9 20,5 - Total expenditure as % of GDP - 1,2 1,2 1,4 Expenditure per student in US dolars (PPP adjusted) - - 6094 6962 as % of GDP per capita - 32 34 28 weight of teachers compensation - - 78,3 58,4 Teachers per 100 students - 12,7 13,7 7,9 Teachers with higher university degree (%) 75,9 85,8 - - Tenured teachers (%) 69,7 75,7 82,3 - Sources: OECD and Ministry of Education. Cross-country studies on efficiency of education

Non- Method Output Author Investigation Input Indicators discretionary Ranking for Portugal used Indicators factors Efficiency of Afonso/ secondary Instruction time in public GDP/capita, DEA: 20 (in 25 DEA, tobit, St. education institutions, parents' edu- countries); boots-trap- PISA (2003) cational attain- Aubyn provision, teachers/student ratio "corrected efficiency ping ment, public-to (2006) (25(OECD) (2000 – 02) total expend. scores": 1st countries) Primary and teachers/student ratio, PISA (2003), Suther- secondary DEA, cumulative spending on Homogeneity of [broader DEA: PT one of the land, education (OECD boots-trap- primary and lower educational institutional most efficient country OECD countries) ping education, student attainment, settings] (output efficiency) (2006) Incl. equity characteristics school enrolment PT one of the least (1) Annual expenditures Education [and efficient country in all Afonso/ on educational Health] analysis, ranking better St. institutions per student expenditures FDH, DEA PISA (2000) in input efficiency in Aubyn (PPP), (2) hours/year in efficiency FDH/(2): (11th place in (2004) school, teachers/student (OECD countries) 18 countries) and ratio DEA/(2): (8th place) Ratio of Education (1): Spending per student secondary Clements spending in (PPP), graduates to PT one of the least eff. FDH (2002) Europe (2): spending per student population at in 12 UE countries (OECD countries) as % of GDP typical graduation age

Studies on efficiency of education in Portugal (single-country studies)

Method Output Non-discre- Author Investigation Input Indicators Result used Indicators tionary factors Student municipality Unemployment rate, performance unemployment access to health care Efficiency of Composite indicators (that (School rate, social services, adult education Oliveira e secondary FDH, comprise several items): ETL attendance development and living infra- Santos education in bootstrap- Education, teaching and learning; rates for the 3 index and structures are determi- (2005) Portugal, at ping EE educational environment; OM years of number of nants of school efficient; school level organization and management upper physicians per Differences between secondary 1000 people regions are also relevant educ.) OLS Family and home regression Efficiency of PISA 2000 characteristics a strong importance of Carneiro , decom- School characteristics (indices from education in students (indices from family background (2006) position PISA) for 15-years old students Portugal achievement PISA) for 15- variables of years-olds variance average n. of teachers per 100 National living standards students; average n. of teachers per examination Technical inefficiency: Efficiency of (average house- class; average age of teachers scores examination scores Pereira e secondary hold electricity (proxy for seniority), a measure of (average could be on average Moreira education in SFA consumption) school size, a dummy variable for school scores about 15 to 25 per cent (2007) Portugal, at and education public/private school, the share of in the 12th higher for the current school level level (the student population in recurrent grade nat. level of resources illiteracy rate) education examinat.)

Non-discretionary variables

Oliveira e Santos • municipality unemployment rate • social development index • number of physicians per 1000 people • GDP per capita (dismiss as statistically insignificant) • divorce rate (the same)

Pereira and Moreira Firstly, • health conditions - Health Status Index, • education level - average years of schooling and • living standard - Purchase Power Index

Then two alternative indicators: • education level - illiteracy rate and • living standard - average household electricity consumption Results

Carneiro • a strong importance of family background variables; school resources explain very little of students performance

Pereira and Moreira • technical inefficiency: examination scores could be on average about 15 to 25 per cent higher for the current level of resources, further analysis: apply the same techniques to a panel of schools from several countries • "quality" of teachers has more effect on output than "quantity" => enhancing the flexibility in the allocation of teachers could free resources without a noticeable effect on scores • evidence of scale economies in secondary education => potential gains in the concentration of resources. • sizeable influence of geographical location of schools on outcomes. (in line with Oliveira e Santos) • better performance of privately managed schools - efficiency analysis reveals average output gains of about 8 per cent => importance of transposing management practices of the private sector to general government schools (e.g. enhancing the accountability of teachers in public schools and introducing rewarding mechanisms)

Recent reforms in education

A . better use of existing resources • rationalisation of the school netw ork • m ore efficient use of the teaching staff already in the system a. effective num ber of hours teachers spend in school w as in creased b. num ber of teachers w ith reduced or no teaching tim e was reduced c. retraining of teachers – primary and lower secondary school, e.g. training program m es for first cycle basic education teachers of: m athem atics (in 2005/06 training of 6000 m ath. teachers and in 2006/07 m ore 7000); experim ental science and ICT (2006/07 about 17000 teachers receiving ICT basic training); Portuguese Recent reforms in education (cont.)

B. better quality of curricula and evaluation system s • upgrading the curricula o generalisation of English teaching in first cycle of basic education (coverage rate in 2005/06: 96% schools and 86% students of 3rd and 4th years of primary ed.; goal: 100% of 1st to 4th year students until 2009) o generalisation of experimental science and ICT teaching to basic and secondary education • evaluating basic and secondary schools (identify best practices and problems to be solved) C. expanding the supply of education • expansion of pre-school (goal: insure 100% attendance to 5 year-olds until 2009 and 90% to 3 to 5 years-olds until 2010) References

Afonso, A. and M. St.Aubyn (2004). Non-parametric approaches to education and health expenditure efficiency in OECD countries. Working paper, Technical University of Lisbon - CISEP. Carneiro, P. (2006). Equality of opportunity and educational achievement in Portugal. III Conference on Economic Development of Portugal. Lisboa, Portugal: Banco de Portugal. Clements, B. (2002). How efficient is education spending in Europe?. European Review of Economics and Finance, Vol.1 nº1. Clements, B. (1999). Efficiency of education expenditure in Portugal. Working Paper 179/99, International Monetary Fund. Ministério da Educação (2003). Estatísticas da Educação 2003/2004. Lisboa, Portugal: GIASE - ME. Ministério da Educação (2004). Sistema Educativo Português: Situação e Tendências 1990- 2000. Lisboa, Portugal: GIASE - ME. Ministério da Educação (2007). Séries Cronológicas, Alunos (1977-2006). Lisboa, Portugal: GIASE - ME. OECD (1998). Education at a glance. OECD Indicators 1998. Paris, France: OECD Publishing. OECD (2006). Education at a glance. OECD Indicators 2006. Paris, France: OECD Publishing. Oliveira, M. and C. Santos (2005). Assessing school efficiency in Portugal using FDH and bootstrapping. Applied Economics 37, 957.68. Pereira, M. and S. Moreira (2007). A Stochastic Frontier Analysis of Secondary Education Output in Portugal. Banco de Portugal (forthcoming)