Determinants of education expenditures and private vs. public divide in educational outcomes in Turkey

Determinants of education expenditures and private vs. public divide in educational outcomes in Turkey

Elif Öznur Acar, Cankaya University

Seyit Mümin Cilasun , Atilim University

Burak Günalp, Hacettepe University

July 26, 2015

ERF, Cairo

1.Introduction

Turkey has a demographic window of opportunity

• working age population will rise until 2040s.• absorbing the new entrants into the labor market• high-quality education became crucial

Turkey’s educational outlook is still bleak

• Average years of schooling is 7 years• Low enrollment rates, but climbed rapidly after 1997• Poor PISA performance• Equity issues in access to education

2

Chapter 1: IntroductionDeterminants of education expenditures in Turkey Introduction

Turkey’s topmost challenge improve quality & equity of education system, which requires more/better investment.

Public spending on education has been rising

• % of education expenditures rose from 6.5 % in 2002 to 9 % in 2012

• 16.5 million students enrolled in primary and secondary education

• extension the years of compulsory education after 1997

Private out of pocket spending on education has also grew

• education in hh’ expenditures rose from 2% in 2003 to 2.4% in 2012.

• students attending private schools doubled from 1.7% to 3.3%

• private schools rose from 2.7% to 6.5% over 2002-2011 period.

• private schooling could aggravate the already low levels of intergenerational mobility in education and income

3

Chapter 1: IntroductionDeterminants of education expenditures in Turkey Introduction

4

Motivation, method and contributions• Motivation

• To investigate the determinants of household expenditures• To see whether income elasticity of education expenditures changed

• Method

– 2003, 2007, 2012 Household Budget Survey data– Tobit regression of education expenditures by income groups using a # of

household characteristics

• Contribution• Focus on demand for education, determinants of educ. expenditures • Adds to the limited literature on Turkey• Use Tobit model which considers possible left-censoring in the data

Determinants of education expenditures in Turkey Motivation, methodolgy and contributions

5

2. Overview of Education Policies in Turkey

Determinants of education expenditures in Turkey Overview of Education Policies in Turkey

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• Turkish modernization: state-centric educational project– The Law for the Unification of Education, 1924

• Compulsory primary education from 5 to 8 years, 1997– to enhance education opportunities for all children

• Decentralization reform, 2004 – local authorities given increased roles and

responsibilities

• “Constructivist education reform”, 2005– extension of the secondary school from 3 to 4 years– implementation of a new curriculum for elementary

education– net schooling rate in primary education: 98.7% in 2011-

2012– net enrollment rate for secondary education increased

• “4+4+4 Law”, 2012 – compulsory education is extended to 12 years, 3 levels of 4

years – students can enter technical or vocational schools in 5th

grade– age of entry to primary school is lowered to 66 months

8

• Critical challenges await on quality and equity issues Determinants of education expenditures in Turkey Overview of Education Policies in Turkey

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Mean PISA scores in Turkey, by test

Mean PISA scores, by genderGap between Turkey and OECD average

Note: 40 points in PISA are equivalent one school year

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• Inequalities between social groups in academic achievement


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b. Distribution of students among math qualification levels according to socio-economic status in Turkey

a. Average student performance andsocio-economic status in Turkey

10

• Low intergenerational mobility in education


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11


• Education expenditures increased both in absolute terms and as a share of central government budget since 2003

• Most was spent on building schools and classrooms

• Still, education expenditure per student both in primary and secondary level are lower than the OECD average.

• The share of private sources in education expenditures is higher than most OECD countries.

• The high share of private sources in total education expenditures is due to the dual institutional structure– public schools vs. private schools and dershanes– # of students attending private schools in total has

increased from 231,000 in 2003 to 651 in 2014

12

3. Survey of Literature

• Psacharopoulos, Arieira and Mattson (1997)

• Kanellopoulos and Psacharopoulos (1997); Psacharopoulos and Papakonstantinou (2005)

• Hashimoto and Health (1995)

• Qian and Smyth (2011)

• Glewwe and Patrinos (1999); Glewwe and Jacoby (2004); Huy (2012)

• Tansel (2002); Tansel and Bircan (2006); Smits and Hoşgör (2006); Hisarcıklılar, McKay and Wright (2010)

Survey of LiteratureDeterminants of education expenditures in Turkey

13

4. Data and Model

• 2003, 2007 and 2012 Turkish Household Budget Survey

• Model captures 3 types of variables– household heads (age, educational, employment status)– household characteristics (size, location)– students in households (% of primary school, % of female)

• We estimate separate regressions for income quartiles.

• We use Tobit estimation analysis

Determinants of education expenditures in Turkey Data and Model

14

Conceptual Framework

• Benson (1961) :the income elasticity of education is– between zero and one for low- and high-income

households, – greater than one for middle income households.

• Educational background of the household head, (EDUC)– below primary (base), primary, secondary, high school,

university

• Multiple generations live in the same household, (HHS)

• Expenditures at different stages of education (SHRPS)

• Different attitudes in rural and urban areas (RURAL)

• Negative attitude towards girls’ (SHRFS), (RURALF)

• Control for the total # of students in the household (NS)

Determinants of education expenditures in Turkey

Turkey

Data and Model

15


Turkey

Summary Statistics

Data and Model

2003 2007 2012Variable

1st Q 2nd Q 3rd Q 4th Q 1st Q 2nd Q 3rd Q 4th Q 1st Q 2nd Q 3rd Q 4th Q

reeleducexp 44.90 93.06 186.88 542.56 68.48 205.24 328.29 947.31 114.72 201.16 335.25 1131.41

reely 2444.06 4271.59 6594.85 15334.93 4081.18 7410.28 11280.32 22427.89 4677.02 8095.98 12237.35 25977.23

educd1 0.19 0.10 0.07 0.04 0.25 0.09 0.04 0.04 0.19 0.09 0.04 0.03

educd2 0.65 0.59 0.46 0.33 0.59 0.59 0.48 0.33 0.59 0.52 0.41 0.23

educd3 0.09 0.13 0.13 0.10 0.08 0.12 0.12 0.10 0.11 0.15 0.13 0.09

educd4 0.07 0.15 0.23 0.26 0.07 0.16 0.23 0.27 0.10 0.19 0.25 0.22

educd5 0.00 0.02 0.10 0.27 0.01 0.03 0.13 0.26 0.01 0.05 0.16 0.42

age 41.74 43.26 44.04 45.09 42.32 43.61 44.36 44.71 44.02 44.11 45.10 45.24

emp 0.77 0.76 0.81 0.84 0.75 0.78 0.80 0.84 0.71 0.77 0.80 0.84

hhsize 5.28 4.99 4.90 4.80 5.22 4.89 4.66 4.61 4.61 4.43 4.29 4.26

primshare 0.83 0.78 0.74 0.71 0.87 0.79 0.74 0.70 0.76 0.72 0.65 0.66

rural 0.39 0.31 0.23 0.19 0.48 0.34 0.22 0.14 0.44 0.30 0.25 0.16

girlshare 0.39 0.36 0.35 0.34 0.45 0.47 0.48 0.46 0.45 0.47 0.48 0.47

totalstu 1.61 1.47 1.36 1.21 1.78 1.55 1.37 1.21 1.64 1.47 1.27 1.10

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5.Estimation Results

• lnINC is significant for all years and income quartiles – a peak in the middle income quartiles and a decrease at

both ends of the income distribution • For the 1st quartile, H0: ε=1 is rejected at the 5 %

level of significance in 2003 and 2007, not in 2012. • For the 2nd quartile, ε >1 for all years. • For the 3rd quartile, ε is not significantly different

from 1 in 2003 and 2007, and statistically insignificant in 2012.

• For the 4th quartile, ε is not different from one in 2003 and 2007, while for 2012 it is statistically significantly >1


Turkey

Estimation Results

17

• Income elasticity of education increases over time for all.

• Head’s education has an increasingly positive effect – For the upper middle income and the top income

quartiles, the coefficients of EDUCD4 and EDUCD5 are always significant

– for the 2nd quartile in 2007, all households with a graduate head spend more than households whose heads lack a diploma

– in all income quartiles in 2012, household heads with a high-school degree invest more in education than those without any education

• HHS is highly significantly negative in all estimations.

• SHRPS is insignificant in almost all estimations.• Households in the urban areas spend more on

education than those in the rural areas in 2003. – In 2007, this finding weakens and holds only for lower-

income families; and in 2012, the coefficient of RURAL turns out to be insignificant for all income quartiles


Turkey

Estimation Results

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Questions?

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Determinants of education expenditures and private vs. public divide in educational outcomes in Turkey