Education is essential for economic recovery, growth and international development.
Increasing educational opportunities for the most disadvantaged is an effective way to reduce poverty, inequality, and improve social mobility, all of which are critical to long-term economic growth, recovery and development. When a country is recovering from an economic downturn, investing in the next generation of innovators, makers and creators through quality education is the best way to jump-start an economy. Investing in education creates a talented workforce, with the skills and innovation needed to address pressing challenges, unlocking economic opportunity, and providing consumers with disposable income to contribute to economies internationally.
Education cuts after an economic crisis can hurt learning and future growth.In the US, when school spending was cut by 10% after the 2008 recession, test scores fell by nearly 8%.(Jackson et al., 2019)
The cost of not providing education is staggering.Limited educational opportunities and barriers for girls cost the world economy between US$15 trillion and US$30 trillion. In nine countries, the cost of out-of-school children was estimated to be greater than the value of an entire year of GDP growth.(World Bank, 2018)(Thomas & Burnett, 2013)
Without major cost increases, 21% of the financing required to achieve Sustainable Development Goal 4 will remain unaccounted for between 2023 and 2030. This is equal to an annual funding gap of approximately US $97 billion.(UNESCO, 2023)
Aid to pre-primary education has decreased at a faster rate compared to education overall. Overall aid to education decreased by 6.9% between 2020 and 2021. The amount spent on pre-primary education decreased by a larger amount over the same period, by 9.4%.(Theirworld, 2023)
International aid for education needs to increase if lower-income countries are to reach the SDGs.Estimates at the introduction of the SDGs suggested that after domestic resources were maximised, international support for education in developing countries would need to increase from a current estimated US$16 billion per year to US$89 billion per year by 2030.(International Commission on Financing Global Education Opportunity, 2016)
Projections for education show that by 2030, suboptimal education outcomes will limit progress towards the other global goals.Even before the impact of COVID-19, 258 million children were not in school and 617 million were not learning, and more than half of all young people were not on track to have basic reading and maths skills by 2030. (International Commission on Financing Global Education Opportunity, 2016)
Despite aid increases for education, global aid priorities do not align with the need. Only 47% of aid to education was spent on basic and secondary education in low- and lower-middle-income countries, the two subsectors and two country groups perceived as most in need.(UNESCO, 2020)
Education spending is more effective at job creation than tax cuts.A study found that spending on education created almost twice as many jobs as would be expected from tax cuts of equal value and also resulted in better-paying jobs. (Pollin et al., 2009)
Investing in education in developing countries to reduce inequality is a moral imperative. On average, a low-income country will invest US$1,300 in a child’s education, while the average high-income country will spend US$110,000. (World Bank, 2020)
Education is strongly associated with GDP.Worldwide, each additional year of schooling has been linked to an increase in GDP per capita of around 18%. (UNICEF, 2015)
Education has a transformative impact on a country’s economy and future trajectory.Educational attainment explains nearly half the difference in growth rates between East Asia and sub-Saharan Africa over a 45-year period. If Guinea, whose citizens average 3.3 years of education attained, reached Kenya’s average of nine years, its GDP per capita could double.(UNICEF, 2015)(GEM, 2016)
Literacy matters. If all young people acquired functional literacy skills within the next 15 years, middle-income countries would achieve economic gains equivalent to more than eight times their current GDP over the next 80 years. In Pakistan, women with strong literacy skills earn 95% more than those with weak literacy skills.(EFA GMR, 2013)(OECD, 2015)
Donors have an important role to play in supporting an increase in funding for education.To meet the Sustainable Development Goals, donors need to increase aid to education to 15% of total official development assistance and channel additional aid multilaterally.(International Commission on Financing Global Education Opportunity, 2016)
Norway’s commitment to education at the outset of the Sustainable Development Goals demonstrates how a donor country can havea significant impact.Norway doubled its investment in education for development and increased aid to education in emergencies by 150% between 2013 and 2016. These contributions provided education for five times as many children as there are primary education students in Norway, supporting over 3.1 million girls and boys, providing 11 million students with learning materials, and training 140,000 teachers.(NORAD, 2017)
“Building forward better also means seizing the opportunity to achieve greater resilience. This is not just about spending more on schools and distance-learning capacity, but it is also about improving the quality of education and the access to life-long learning and re-skilling. This is how we can navigate the massive structural economic changes that are underway right now. Transitioning from shrinking to expanding industries, such as digital services, poses an enormous challenge that can only be addressed through greater access to educational training opportunities and the digital infrastructure to support them.”
Education is at risk when difficult budget decisions must be made.
Studies show that during an economic recovery, investing in quality education improves the likelihood of recovery, growth and labour market participation.
In an increasingly globalised world, furthering mutual priorities and addressing global issues – ranging from income equity and economic development to public health and climate change – relies on providing access to quality education.
