in sector coverage apparent. Country studies (box 111.3 and annex 1) suggest that public education financing is not immediately and directly associated with enrollment rates in all cases. Gross enrollment rates declined in Korea despite increasing public education expenditures, and increased in Ghana and Zambia even though public spending declined. Enrollment rates may more accurately reflect changes in demand for education resulting from deteriorating economic conditions and declining household incomes. For example, families may withdraw their children from school in order to reduce education spending, and to have the children contribute to household income (Fuller, 1989). Declining enrollment rates may result from deteriorating labor market conditions during recession and adjustment, as a response to lower perceived private returns to education investment. In order to assess the impact of adjustment measures on education coverage, it is essential to examine the supply and demand factors that caused changes in enrollment rates.

# C. Quality

3.11 A complete analysis of changes in the quality of education requires information for a variety of indicators: per student expenditures (recurrent, and on materials), sector budget shares (recurrent versus capital spending, salaries versus materials), and internal efficiency (repeater and dropout rates, test scores). Coverage of these indicators in the literature is inconsistent, incomplete, and inconclusive regarding the impacts of adjustment programs on education quality. Available evidence must be interpreted with care, as the links between adjustment policies and quality indicators are difficult to ascertain.

# Tab!e 111.5: Real public education spending per capita (% annual change)

||Countries|1970-80|1981-84|1985-87|
|---|---|---|---|---|
|EIAL|<br>10|10.8|1.1|0.8|
|OAL|5||0.5|_5.5_|
|NAL|3|6.7|0.3|9.7|

# Source: World Bank (1990a).

3.12 Per capita and per student spending: Insofar as adjustment measures contributed to lower public education expenditures while enrollments increased, adjustment produced declines in real public expenditures per student. For example, average per capita education expenditures increased in all country groups except intensely adjusting countries after 1980 (annex 4). Table 111.5 indicates that although annual growth in real government education spending per capita was extremely slow for all country groups from 1981 to 1984, the growth rate accelerated during the 1985-87 period for all except intensely adjusting (EIAL) countries. However, lower per student expenditures may not reduce the quality of education if compensating measures increase efficiency in resource use. At the same time, increasing expenditures per student do not necessarily indicate a positive impact on the sector. In Ghana (box I11.4), the increase in per primary student expenditures from 1983 to 1988 would have been small or even negative if enrollment rates (box 111.3) had not fallen. Another influence on education quality which is receiving increasing attention in the literature, but little quantification, is nonsalary expenditures per student, i.e., expenditures on materials and supplies.

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