Explaining the Development of Private Education: the Effect of Public Expenditure on Education

There is considerable cross-country variability in the distribution of pupils between public and private education. Whereas in some countries most children attend private schools, other countries have barely developed an educational offer that provides an alternative to public education. Drawing on available macroeconomic data, we test how public spending on education impacts the distribution of pupils enrolled in private institutions. Using disaggregated data on primary and secondary education in a large number of countries and over a long period, we analyse the differences in the public-private mix of educational systems. Cross-sectional and dynamic panel analyses show that the share of enrolments in private education at primary and secondary levels is strongly impacted by the level of public expenditure on education.