Suffer the children: academy eats up spending

Globalisation has driven governments to give higher education a greater share of education spending in a search for skilled labour - cutting primary education's share as a result.

That is the thesis set out in a paper by Thushyanthan Baskaran, an economist at the University of Heidelberg, and Zohal Hessami, a lecturer at the University of Konstanz's department of economics.

The paper, presented to a Royal Economic Society conference in draft form ahead of its publication, bases its argument on the theory that globalisation has widened the gap between the economic returns from low-skilled and high-skilled labour.

The authors looked at data on the make-up of education spending in 121 countries, including the UK and the US, between 1992 and 2006. To source the figures, they used the World Bank's EdStats database, the Swiss Institute for Business Cycle Research (KOF) Index of Globalisation and a trade-openness measure from the University of Pennsylvania's Penn World Tables.

In the paper, titled Globalisation, Redistribution and Public Education, they write: "Globalisation affects the composition of education expenditure in developing and industrialised countries in the same way: it reduces the share of spending for primary education and increases the share of spending for more advanced types of education.

"The negative effect of globalisation on the share of primary education expenditure can be explained ... by arguing that the returns (from) skilled labour have increased more (or decreased less) than those (from) low-skilled labour ... which induces governments to increase funding for higher education."

This has negative effects on a particular portion of society, Dr Baskaran and Dr Hessami argue.

"Our analysis suggests that globalisation may in the long run increase income inequality even more than already observed, as the educational opportunities for disadvantaged children, who predominantly benefit from lower education, are either scaled back or improved more reluctantly than those for more able students, who predominantly benefit from higher education," the paper states.

Supporters of student-tuition fees in the UK have argued that reducing inequality is better achieved by targeting state education spending on young children, rather than subsidising higher education.

Dr Baskaran told Times Higher Education: "We argue that expenditure for lower education has redistributive effects by improving educational outcomes for children from disadvantaged backgrounds, whereas expenditure for higher education increases the future earnings of students from more affluent socio-economic backgrounds.

"Therefore, by deciding how to divide available educational resources between lower and higher education programmes, governments implicitly decide to what extent they want to pursue efficiency and equity goals through public education."

The economists offer pointers for further study, suggesting it "might be interesting to explore whether total expenditure for different education programmes has been affected by globalisation".

They also suggest that the "interactions between globalisation and private education expenditure should be analysed".

john.morgan@tsleducation.com