# **2.2 Educational Trends in Iran**

Although Iran’s economy has faced many challenges during 1995-2006, the years before the sanctions were instituted, educational attainment and household spending on children’s education have never stopped growing.<sup>14</sup> Educational attainment in Iran has improved substantially in the past four decades.<sup>15</sup> Enrollment rates exceed 90% at the primary and secondary levels, comparable to that of Western countries. Thus, the youth literacy rate increased from 56% in 1976 to 97% in 2006 (Source: World Bank).<sup>16</sup> The rapid growth in education is supported by both private and public spending. The average private and public investment in education as a percentage of GDP is 5% and 4% in 2006, respectively. Over the past three decades, because of increases in youth population and demand for education, the Iranian government has shown a strong commitment to funding public education and promoting access to fee-free public schools at all levels of education.<sup>17</sup> However, like most Middle Eastern countries, a large share of Iranian government spending on education is allocated to post-secondary education in large urban areas.<sup>18</sup> Thus, public universities are of high quality and free tuition, but the number of places at public universities is limited. A highly competitive university entrance examination rations these free-tuition places at public universities.<sup>19</sup> The competition to succeed in school and the public universities entrance examination have encouraged parents to spend on their children’s education such as spending on private schools and private tutoring to help their children in this competition (Salehi-Isfahani (2012)).<sup>20</sup> As Figure 1 shows, Iranian households’ spending on education, which is the major source of education funding in Iran, increased by 67% over the 1995-2006 period. Spending on primary and secondary schools tuition is a significant share of total household expenditure on education in Iran (21%). Many of the best overall primary and secondary schools in Iran are privately funded (Source: Ministry of Education of Iran).<sup>21</sup> Also, parents believe that private primary and secondary schools offer a better education, an environment more conducive to learning, additional resources, and better policies and practices. Indeed, results from value added to cognitive achievement show that private school students averaged higher test scores than their public school counterparts. For example, children who attend private schools perform better in school final exams and the universities entrance exam and have better academic outcomes than those in public schools (Salehi-Isfahani et al. (2014); Rabiei and Salehi (2006)).

Evidence of how the 2006 sanctions affected children’s education can be found in the time series trends. While the enrollment rates did not change for primary and secondary education, attendance at the undergraduate programs

> 14Over these years, Iran’s economy has been under various economic sanctions. The first economic sanctions on Iran were imposed by the U.S following the Iranian Revolution of 1979. US sanctions were gradually expanded to the present level with a total embargo on all bilateral trade and investment. The studies show US sanctions’ economic and political effects have been insignificant (Alikhani (2000); Askari et al. (2001)). According to Hufbauer et al. (2012), the average welfare loss caused by US sanctions on Iran over the period 1984-2005 was around $80 million, less than 1% of Iranian GDP over that period.

> 15Education has expanded in Middle Eastern and North African (MENA) countries faster than in any other region of the world (Source: World Bank). Some countries such as Iran, Turkey, Egypt, and Jordan experienced more growth in education.

> 16The youth literacy rate is the percentage of people ages 15 to 24 who can read, write, and understand a short simple statement about their everyday life.

> 17Based on the article 30 of the Constitution of the I.R. of Iran, “the government is obliged to provide free of charge education for all individuals up to the end of the secondary level of education and to facilitate free higher education up to achieving self-sufficiency” (Source: UNESCO, the World Education Forum report for Iran (2015)).

> 18Tertiary education was nearly all public until the 1980s. In 2006, about half of all university students were enrolled in public universities.

> 19Only 10% of students who take the university entrance exam, win that scholarship.

> 2058% of pre-university students receive private tutoring, which is a significant item in households’ education expenditure (52%), to increase their probability of success at the university entrance examination (source: calculation by the author using HIES).

> 21The Ministry of Education’s school ranking is based on teachers’ quality standard, level of social and cognitive activities, school facilities and environment, school management, etc.

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