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2. MAIN FINDINGS
Current national expenditure on education (total expenditure, excluding fixed capital
formation), at constant prices, rose by 5.3% in 2011, following an increase of 5.6% in 2010.
The current expenditure per capita on education rose by 3.4% in 2011, following an increase
of 3.7% in 2010 and of 0.4% in 2009.
Total national expenditure on education, including fixed capital formation, at constant prices,
rose by 5.7% in 2011, following an increase of 5.6% in 2010, and of 2.8% in 2009.
Fixed capital formation (buildings for schools and equipment), at constant prices, rose by
approximately 2% in 2011, following increases of 4%, 17% and 6%, in the years 2010, 2009
and 2008, respectively. The increases in capital formation in the last four years are mainly
due to increased fixed capital formation by local authorities.
National expenditure on education in 2011 amounted to NIS 75 billion, which constitutes
8.4% of the Gross Domestic Product.1 National expenditure on education includes
expenditures for all public and private educational institutions, from pre-primary through
tertiary education institutions, as well as expenditures by households for private lessons,
textbooks, etc., and expenditures for construction of new educational institutions and for
purchases of equipment.
The government and local authorities financed approximately 78% of the national
expenditure on education in 2011 – similar to the previous year. The rest of the expenditure
was covered directly by households through payment of tuition fees, purchases of textbooks,
etc., and by donations and grants to educational institutions from domestic and foreign
sources.
International Comparison
A comparison of Israel’s data with data from other countries belonging to the OECD
(Organization for Economic Cooperation and Development) for 2009 reveals that the
expenditures for education vary substantially among different countries, both in absolute and
relative terms. Israel's expenditure on education as a percentage of Gross Domestic Product
is among the highest in all the countries included in the comparison. In Israel, the national
expenditure on education reached 7.2% of the GDP, while the OECD countries invest an
average of 6.4% of GDP in educational institutions. In Iceland the percentage was higher,
and amounted to 8.1% (Table C). In making this comparison, it is important to bear in mind
that Israel has a relatively high percentage of young people compared to the other OECD
countries. Therefore, on the one hand, the percentage of Israeli residents who work and can
finance the expenditure for education is relatively small, while on the other hand, the
1
A new method of calculating the GDP in national accounts has been in use for the years 1995 and
onward.
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percentage of students is relatively high. The percentage of the population aged 0-24 in
Israel reached 43.5% in 2009. By comparison, the percentages of the population in that age
group in other OECD countries were much lower, and amounted to only 28.4%, on average
(see below).
Population Aged 0-24 in Israel and in Selected OECD Countries
Percentage of total population, 2009
Israel
43.5
France
31.1
United Kingdom
31.8
Netherlands
29.9
Denmark
30.2
Sweden
29.9
Belgium
29.0
Spain
25.6
Germany
25.0
Italy
24.2
Source of the data: UNESCO-OECD, Eurostat data collection on education statistics, Nov 2011.
Statistical Abstract of Israel No. 61, 2010.
Comparison of the expenditure on educational institutions by level of education shows that in
Israel the expenditure for primary and secondary educational institutions and for preacademic preparatory courses 4.0% of the GDP, compared with a 3.9% average in the
OECD. However, expenditure in Israel for tertiary education (1.6%) was lower than that of
the average of OECD countries (1.9%).
Public expenditure on education in Israel (including expenditure by government ministries,
the National Insurance Institute, national institutions, local authorities and government nonprofit institutions), including scholarships for students, reached 5.8% of the GDP in 2009,
similar the OECD countries (Diagram 1).
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1. GOVERNMENT EXPENDITURE ON EDUCATIONAL INSTITUTIONS
AS A PERCENTAGE OF THE GDP – INTERNATIONAL COMPARISON
2009
8
7
Percentages
6
5
4
3
2
1
Finland
sweden
Czech
Republic
Australia
Korea
Spain
Mexico
United
States
OECD
countries
United
Kingdom
Austria
France
Iceland
Israel
Netherlands
Belgium
0
The share of public expenditure out of the total expenditure on education in Israel in 2009
was 79.2% (Diagram 2, Table I).
The share of public expenditure out of the national expenditure on education in other
selected OECD countries ranged from 68.9% (the United Kingdom) to 91.4% (Austria).
In Israel, public financing for primary and secondary educational institutions and for preacademic preparatory courses in 2009 amounted to 93.2%, close to the average of selected
OECD countries in the same year (91.2%) and similar to the public expenditure percentage
in Spain – 92.9%.
Private financing for tertiary education is more common in Israel, where such financing
reaches 41.8% – higher than the average in selected OECD countries (30.0%), and lower
than the percentage in certain countries, such as the United States (61.9%), United Kingdom
(70.4%) and Australia (54.6%). In other countries such as Finland, Iceland and Austria, by
contrast, private financing is especially low and ranges from 4.2%, 8.0% and 12.3%,
respectively (Table I).
The share of public expenditure on education out of total public expenditure in Israel was
13.6% – a little higher than the average in OECD countries (13.0%). The share of public
expenditure on primary and secondary education and on pre-academic preparatory courses,
out of total public expenditure in Israel was 8.9%, similar to the average in the OECD
countries (8.7%).
By contrast, the share of public expenditure on tertiary education out of total public
expenditure in Israel (2.4%) was lower than the average for the OECD member countries
(3.1%) (Table G).
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A comparison of the average expenditure per student in Purchasing Power Parity (PPP)
terms indicates that in 2009, the average expenditure per student in Israel, at all levels of
education, was lower than the average in OECD member countries (Table D).
In pre-primary education, the expenditure per pupil was $3,998 – little lower than Slovakia
($4,433) and Czech Republic ($4,452) and higher than Mexico ($2,158). Expenditure per
pupil for pre-primary education was particularly high in the New Zealand – $11,202.
In primary education, the expenditure per student in Israel was $5,202, similar to Slovakia,
but lower than the average in OECD countries – $7,550.
In secondary education, the expenditure per pupil in Israel was $5,842, lower than the
average in OECD countries – $9,264. In two countries, the Czech Republic and Mexico, the
expenditure was lower than in Israel, and amounted to $4,658 and $2,536, respectively. In
the United States and Austria, expenditure per pupil was especially high – over $12,000.
In tertiary education institutions, the expenditure per student in Israel totaled $11,214, and
was much lower than the average expenditure in the OECD countries ($18,572). In several
countries (Mexico, the Czech Republic, Korea, Slovakia and Iceland), the expenditure was
Thousands of Dollars1
even lower – less than $10,000. (Diagram 2, Table D).
20
18
16
14
12
10
8
6
4
2
0
2. EXPENDITURE ON EDUCATION PER PUPIL/STUDENT
IN PUBLIC AND PRIVATE INSTITUTIONS, BY LEVEL OF EDUCATION
2009
Pre-primary
educational
institutions
Primary educational
institutions
Israel
1
Secondary
educational
institutions
Tertiary educational
institutions
OECD countries
Based on Purchasing Power Parity.
Data on the distribution of the national expenditure on education by level of education (Table
E) show that the cost of studies for a student in the tertiary level is almost twice as high as
the cost of studies for a pupil in the secondary education level, similar to the average in
Sweden and Finland and to the average of the OECD countries.
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The cost of studies for a pupil in the secondary education level is higher than the cost for a
pupil in the primary education level, both in Israel and in OECD countries: 12% in Israel and
22% in selected OECD countries. A similar figure to the Israeli one was also recorded in the
United States and the United Kingdom.
A comparison of the types of expenditure reveals that in primary and secondary education
institutions and in pre-academic preparatory courses in Israel, the share of labour cost out of
the total current expenditure (84%) was higher than in the OECD countries (78%). The data
on total expenditures for wages also include wages of workers who are not teachers, as well
as an estimation of the value of the budgetary pensions of government workers. The share
of expenditure for fixed capital formation, out of total expenditure on education, was lower in
Israel than the average in the OECD countries.
In tertiary education institutions in Israel, the share of labour cost was 80% of the current
expenditure, similar to the percentage in United Kingdom and compared with an average of
68% in OECD countries.
Fixed capital formation for these institutions was 11% in Israel, higher than the average in
OECD countries – 9% (Table H).
National Expenditure on Education, by Operating Sector
In 2011, most educational services (87%) were provided to the population by the public
sector – i.e., educational institutions of the government, of the local authorities, and of
governmental non-profit institutions that are financed mainly by the government (the
universities, ORT and Amal schools, etc.).
In 2011, the value of services provided by non-governmental non-profit educational
institutions (financed mainly by private sources) amounted to 4% of the national expenditure
on education.
The share of educational services provided on a commercial basis, i.e., pre-primary services,
private lessons (including supplementary instruction for primary school students), courses for
adults, and textbooks, etc., was 9% of the national expenditure on education.
Distribution of Financing for the National Expenditure on Education
Detailed data on the funding of expenditure by levels of education for 2008 (the last year for
which such data are available), show that the government and local authorities financed 78%
of the total national expenditure on education.
The government and local authorities and government non-profit institutions financed 94% of
the current expenditure at the primary level, 78% at the pre-primary level, and 74% at the
secondary level.
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The government, local authorities and governmental non-profit institutions also covered 78%
of expenditures in universities (not including research, which is budgeted separately) and
37% of the expenditure in other tertiary education institutions (Diagram 3).
3. CURRENT NATIONAL EXPENDITURE ON EDUCATION,
BY FINANCING SECTOR AND LEVEL OF EDUCATION
2008
Percentages
100
90
80
70
60
50
40
30
20
10
0
94
78
78
74
37
Pre-primary
education
Primary
education
Secondary
education
Government and local authorities
Universities
Other
institutions
Households and donations
Households financed 21% of the national expenditure on education in 2008, through
purchases of educational services from public institutions, as well as through purchases of
educational services, textbooks and stationery from business entities.
Donations from households and from institutions in Israel and abroad financed 2% of the
national expenditure on education. Most of the donations were earmarked for the
universities.
Current National Expenditure, by Level of Education
Data on the distribution of current expenditure per student by level of education in the years
2000–2008 reveal that the cost of studies per student in tertiary education was almost twice
the cost of pupils in the secondary education level, and almost three times the cost of that of
a pupil in the pre-primary level. Over the years, the ratio between a student in tertiary
education and a pupil in other education levels decreased. In 2007 the relative expenditure
per student in the tertiary level decreased.
The expenditure on pre-primary education, primary education (including supplementary
lessons), and on secondary education (including private tutoring) reached 68% of the current
national expenditure on education in 2008. Of this, 11% of the current national expenditure
was for pre-primary education institutions (from age 3), 30% was for primary education
institutions, and 27% was for secondary education institutions.
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The expenditure on tertiary education institutions reached 22% of the current expenditure on
education.
The remaining 11% of the current national expenditure on education consisted of outlays for
administration and for other types of educational services, e.g., courses for adults, Hebrew
language instruction and adult education, yeshivot, and purchases of textbooks and
stationery.
Current National Expenditure, by Type of Expenditure
In 2011, 73% of current expenditure by the government, local authorities, and non-profit
institutions on educational services was for labour costs, 19% was for purchase of goods
and services, and 8% was the calculated estimate of the expenditure on consumption of
fixed capital.
Combined Account of the Universities (for details on the universities, see Section 3 – Terms,
Definitions, and Explanations, Par. 3.2)
The combined account of the universities is presented in Table 10. The table covers all their
activities, including teaching and associated research, as well as courses and research that
are budgeted separately. This combined account facilitates examination of the total
resources that were available to the universities, compared with the various expenditures on
all their activities. It should be noted that national expenditure on education does not include
research expenditure, which is budgeted separately.
The combined account of the universities was compiled in accordance with their financial
reports. The recorded income, deficit, or surplus does not include financial commitments
from various entities.
The combined account indicates that in the academic year 2008/09 (from October 2008 to
September 2009), 87.3% of the total expenditure of universities was current expenditure for
goods and services; 5.8% was for student scholarships, awards, and other forms of support;
and 10.7% was capital formation in buildings and equipment. That same year, there was a
surplus of finance income over finance expenses (-3.8%).
In the 2007/08 academic year, 78.0% of the current expenditure for goods and services was
used for teaching and associated research. and 9.3% was for separately budgeted research.
The government financed approximately 59.3% of the expenditure of universities (by current
transfers) in 2007/08. Income from the government included special allocations to cover the
universities’ cumulative deficit and the enrollment of immigrant students.
Funding from donations decreased, and in 2008/09 such funding reached 8.1% of the
universities’ total expenses.
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Income from tuition and other student fees financed 14.4% of expenses in 2008/2009, a
decrease of 6.8% compared to the previous year, but current transfers increased by 8.2%
compared to the previous year. Pursuant to government decisions, tuition fees were reduced
by 11% for first-degree students in 2001/02. In 2002/03-2004/05, tuition fees were reduced
by an additional 3% each year. Hence, in 2008/09, the cumulative reduction amounted to
26% in comparison with the tuition fees charged in 2000/01.
.
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