[EQ] Education and Health in G7 Countries: Achieving Better Outcomes with Less Spending

 

Education and Health in G7 Countries: Achieving Better Outcomes with Less Spending

 

Verhoeven Marijn ; Gunnarsson Victoria ; Carcillo Stéphane

International Monetary Fund - Working Paper No. 07/263: November 2007

 

Available online PDF [52p.] at: http://www.imf.org/external/pubs/ft/wp/2007/wp07263.pdf

 

“…..A key policy challenge in G7 countries is to improve the performance of education and health systems while containing their cost. Education and health outcomes are critically important for social welfare and economic growth and thus, spending in these areas constitutes a large share of public spending. But there is concern about the efficiency of such spending. In education, there are questions about the ability of school systems to maximize the potential of students and respond effectively to changes in the demand for education outcomes. In health, there is concern about the rapid rise of the cost of health care and the impact on competitiveness, as well as trade-offs between the efficiency and equity of health systems.

 

This paper attempts to assess the efficiency of education and health spending in G7 countries. It asks whether countries could achieve better education and health outcomes at current levels of spending or, conversely, whether countries could have the same outcomes at lower levels of spending. We seek to establish a link between observed differences in efficiency across G7 countries and discuss the role of policy and institutional factors in explaining efficiency differences.

 

The paper also discusses efficiency-enhancing reforms for the education and health sectors. The analysis involves addressing complicated issues of what

drives outcomes in education and health and should be regarded as exploratory. Follow-up work on data and other parts of the analysis are needed for more definitive answers.

 

The paper is organized as follows. Section II provides the background and relevant literature for the analysis. Section III describes trends in education and health spending and outcomes in G7 countries. It also explores the issue of how efficiency in the education and health sectors in the G7 can be measured, and how observed differences between countries may be related to policy choices and institutions. Section IV makes some suggestions for reforms in the education and health sectors in G7 countries. The technical aspects of the analysis are elaborated in Appendix I. ….”

 

Contents

I. Introduction and Main Conclusions

II. Education and Health Spending, Outcomes, and Economic Growth: Background and Literature Review

III. Spending and Outcomes in Education and Health: Empirical Analysis

A. Trends in Education and Health Spending and Outcomes

B. The Relative Efficiency of Education and Health Spending

C. Achieving Better Outcomes with Lower Spending

IV. Concluding Remarks

Tables

1. Trends in Health and Education Spending, 1995–2003

2. Trends in Health and Education Outcomes

3. Efficiency of Education and Health Spending in G7 Countries Relative to the OECD

4. Spending and System Efficiency in Education and Health

Figures

1. Total Education Spending per Student by Level of Education, 2003

2. Total Health Spending per Capita by Source, 1998–2001

3. Efficiency and the Best-Practice Frontier

4. Secondary Education Spending and Average PISA Mathematics Scores

5. Secondary Education Spending and the Distribution of PISA Mathematics Scores

6. Secondary Education Spending and Upper Secondary Graduation

7. Tertiary Education Spending and Tertiary Graduation Rates

8. Public Health Spending and HALE

9. Public Health Spending and Standardized Death Rates

10. Public Health Spending and Infant Mortality

11. Public Health Spending and Child Mortality

12. Public Health Spending and Maternal Mortality

13. Teacher Salary in Secondary Education and GDP

Appendixes

I. Data, Data Envelopment Analysis, and Second-Stage Analysis

 

 

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