Nova workboard

a blog from young economists at Nova SBE

Trends and differences in tertiary education gross enrollment of similar countries. How to compare Italy, Spain, Portugal and Greece?

Italy, Spain, Portugal and Greece are all both OECD countries and members of European Union. These countries have similar culture, policy-making style and have been seriously affected by the World Crisis. For those reasons it is possible to compare their gross enrolment rates at tertiary level.

A common trend is that enrolment is increasing on average, being the rates of 2010-2011 higher than those of 2004.

Tertiary Gross Enrolment Rate in Italy, Spain, Portugal and Greece (2004-2012)

2004

2005

2006

2007

2008

2009

2010

2011

World

23,4%

24,1%

24,9%

25,9%

27,1%

28,2%

29,6%

30,1%

Italy

61,5%

64%

65,8%

66,4%

66%

66%

65,5%

n.a.

Spain

65,8%

66,6%

68%

69%

70,7%

73,2%

78,1%

82,6%

Portugal

55,5%

55,4%

55,4%

57,4%

61,1%

62,2%

65,5%

n.a.

Greece

79%

88,6%

93,1%

89,4%

n.a.

n.a.

n.a.

n.a.

Source: World Bank Database

This trend can be associated with the exponential growth of total youth unemployment in recent years (reaching in Spain values close to 50% of youth workforce).

 Total Youth Unemployment (as % of total labour aging 15-24) from 2004 to 2011

2004

2005

2006

2007

2008

2009

2010

2011

Italy

24,6%

24%

21,6%

20,3%

21,3%

25,4%

27,8%

29,1%

Spain

22%

19,7%

17,9%

18,2%

24,6%

37,9%

41,6%

46,1%

Portugal

19,3%

16,1%

16,2%

16,6%

16,5%

20%

22,3%

30,1%

Greece

26,9%

26%

25,2%

22,9%

22,1%

25,8%

27,8%

29,1%

Source: World Bank Database

Many economists agree that there is a positive correlation between growth of unemployment and gross enrolment rates, and it is what we can see even in this case looking at the data. However, recent trends show differences, as we observe a slow decrease in enrolment rates in Portugal and Italy and a sustained growth in Spain. We can state that higher level of enrolment during recessions can be explained by lower opportunity costs of schooling (assuming that people want acquire more education till the expected income is higher than the average).  By contrast, I would argue that costs are not lower because of imperfect financial markets, reduced saving propensity rate and decreasing level of GDP per capita.

GDP per Capita (Current US$) in Italy, Spain, Portugal and Greece (2004-2012)

2004

2005

2006

2007

2008

2009

2010

2011

2012

Italy

29.832$

30.478$

31.777$

35.826$

38.563$

35.073$

33.761$

36.103$

33.048$

Spain

24.468$

26.056$

28.024$

32.118$

34.977$

31.714$

29.956$

31.984$

29.195$

Portugal

17.653$

18.185$

19.065$

21.845$

23.716$

22.019$

21.381$

22.503$

20.182$

Greece

20.607$

21.620$

23.475$

27.288$

30.398$

28.451$

25.850$

25.630$

22.082$

Source: World Bank Database

GDP per Capita in Italy (Constant price in US$) in Italy, Spain, Portugal and Greece (2004-2012)

2004

2005

2006

2007

2008

2009

2010

2011

2012

Italy

28.227$

28.280$

28.728$

29.008$

28.454$

26.729$

27.059$

27.081$

26.316$

Spain

26.882$

27.352$

28.075$

28.530$

28.330$

27.045$

26.907$

26.890$

26.427$

Portugal

21.300$

21.369$

21.607$

22.068$

22.037$

21.376$

21.780$

21.539$

20.929$

Greece

23.896$

24.348$

24.587$

26.387$

26.226$

25.301$

23.997$

22.307$

20.904$

Source: OECD Statistics

For these reasons I suggest that a growing enrolment is to be, at least partly, attributed to the signalling effect, as we observe a growing individual demand for high ranked schools.

Anyway, even if the enrolment rates are markedly higher than world level (always more than the double) we observe significant differences across the countries. Observing the data we have to exclude that GDP per capita plays any influence in explaining these differences (a Gini index analysis may make more efforts). In that, in fact, we should observe a higher enrolment rate in Italy, where it is instead lower than Greece, Spain and more or less equal to Portugal level.

It is to notice that even public expenditure per student (as % GDP per Capita) is not very relevant, being the expenditure rates, for instance, higher in Portugal than in Spain and Italy in the last years where enrolment rates are higher. This is only one method to analyse the resources per student. An alternative indicator is the real expenditure per student. In this case a comparison is more difficult because we use absolute values, but results are similar to the previous indicator.

Expenditure per student, tertiary education (as % GDP per Capita) in Italy, Spain, Portugal and Greece (2004-2010)

 

2004

2005

2006

2007

2008

2009

2010

Italy

22,6%

22,1%

23,2%

22%

24,8%

25,7%

25,8%

Spain

22,6%

22,7%

23,4%

25,1%

27,3%

29,2%

28,5%

Portugal

22,5%

26,2%

27,8%

33,5%

26,7%

30,6%

n.a.

Greece

24,8%

25,4%

n.a.

n.a.

n.a.

n.a.

n.a.

Source: World Bank Database

In Greece (data available only till 2007) we observe very high enrolment rates at tertiary level. One possible explanation is that it is the only of the considered countries with no fees for university, according to the very worth democratic principle that education must be universally guaranteed.

It is difficult to compare these countries and identify which is the best in tertiary education attainment and with the most efficient outcome. Entry rates and graduation rates should have similar values in the same year, however a significant difference between the two measures in the countries tells us that the number of graduated is always much lower than the enrolled.

Tertiary Education Entry rates* in Italy, Spain, Portugal and Greece (2000-2007)

2000

2001

2002

2003

2004

2005

2006

2007

Italy

39%

44%

50%

54%

55%

56%

55%

53%

Spain

47%

47%

49%

46%

44%

43%

43%

41%

Portugal

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

53%

64%

Greece

30%

30%

33%

35%

35%

43%

49%

43%

Source: OECD Statistics

*First time entrants as a percentage of population in corresponding age group

Tertiary education graduation rates

 

2000

2001

2002

2003

2004

2005

2006

2007

Italy

19%

21,5%

25,2%

n.a.

36,1%

41%

39,4%

35%

Spain

30,4%

31,5%

32,3%

32,3%

32,9%

32,7%

32,9%

32,4%

Portugal

23,2%

27,6%

30,1%

32,6%

32,1%

32,3%

32,9%

42,6%

Greece

14,5%

15,7%

18,4%

20,3%

24,4%

24,9%

20,4%

17,7%

Source: OECD Statistics

To conclude, to explain differences in enrolment at tertiary level across similar countries could be useful to consider all the limits of economic indicators (even if only few of them have been utilised in this analysis), that in my opinion tend to attribute relevance only to what is measurable. Further explanations may be found analysing the non-economic environment, such as the cultural propensity of studying and the non-monetary benefits of schooling.

 Francesco Morandotti

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Author: studentnovasbe

Master student in Nova Sbe

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