School funds being spent inefficiently: survey

LONDON (Reuters) - Rich nations are spending far more on education than they did 12 years ago, but inefficient use of resources is hampering efforts to improve standards, the OECD said on Tuesday.

In its annual "Education at a Glance" survey, the Organisation for Economic Cooperation and Development (OECD) found that, by spending current resources more efficiently, learning levels could be raised by 22 percent.

"Countries are collectively spending more than they have ever done on education ... But the results gained from that investment are far from maximized," said the OECD, which represents 30 industrialized countries.

The Paris-based organization reported that just 55 percent of funding provided by the U.S. government for schools went to pay teachers, well below OECD levels of more than 63 percent.

Financing the expansion of higher education would be an issue for many countries in the future, it said. Spending per pupil had already begun to decline in some.

"Innovative financing and student support policies that mobilize extra public and private funding will be part of the answer and many countries are moving successfully in this direction...," it said.

Between 1995 and 2004, spending on education had increased by 42 percent on average in OECD countries as more people than ever completed secondary and university education, the OECD said.

However, it said the increase in education spending in that period had fallen behind growth in national income.

The report also found university graduates earned more money and found jobs more easily than people who did not have degrees and these advantages have grown over recent years in many countries.

"However, fears of a crowding-out effect, whereby more graduates would mean more unemployment at the lower end of the scale, seem not to be justified," the OECD said.

But the penalties for not finishing secondary schooling were significant, the OECD said. Students who did not finish high school had unemployment rates five to seven points higher than those who finished high school or went to university.

More than 40 percent of young people now complete university courses in Australia, Denmark, Finland, Iceland, Italy, the Netherlands, New Zealand, Norway and Poland.

In Germany and Austria, where courses are longer, only around 20 percent of young people get degrees, it said.

OECD analyst Andreas Schleicher said that countries that had invested in higher education and the "knowledge economy" had bright futures.

"What you have seen are these countries making such an improvement in their investment, they are certainly better off," he added.