The analysis of the determinants that affect education expenditure in low income countries and lower middle income countries

Abstract

This research has aimed to, 1) analyze key factors affecting primary education expenditures in low income countries and lower middle income countries, 2) analyze key factors affecting secondary education expenditures in low income countries and lower middle income countries, and 3) suggest policies regarding the allocation of education expenditures to poor areas and inequalities in education.

The researcher mainly used quantitative research supported by documentary research. The unit of analysis was poor countries, as categorized according to Gross National Income per Capita from the World Bank using the Atlas method with GNI/Capita < US$1,005 and GNI/Capita between US$1,006 - US$3,955. The sample used in this research encompassed 45 countries coming from the group of low income countries and lower middle income countries. Data collection used secondary data and data analysis by the Ordinary Least Square Method (OLS), which is an estimation of the regression coefficient with the significance set at 0.01, 0.05, and 0.10

The results show that government revenue affected education expenditure at the primary level of low income countries and lower middle income countries at .01 statistical significance (β5 = 0.584458, p < .01). Unemployment has redounded educational expenditure at the secondary level of the low income countries and lower middle income countries at .05 statistical significance (β2 = 0.908276, p < .05). Moreover, a low rate of corruption affected education expenditure at the secondary level of low income countries and lower middle income countries at .10 statistical significance (β4 = 8.151520, p < .10).

As for recommendations on guidelines for governments, state income, such as taxes and other fees, should be allocated to poor families for receiving a thorough primary education. Moreover, skill enhancement, such as language and other professional skills, should be provided for secondary students to prepare them for the labor market. Lastly, the government should allocate as much budget to education as possible in order to use the education sector for truly developing the country.