# **7. PUBLIC POLICIES FOR IMPROVING EQUITY IN TERTIARY EDUCATION**

The above analysis highlights the fact that achieving equity in tertiary education is still a distant goal in Central America. Public policy, if it is guided by promoting equity objectives, should aim to address the short-term and long-term constraints that prevent students from poor and disadvantaged backgrounds from reaching and completing tertiary education. In this section, we review three arenas of public policy action: (a) public spending on tertiary education, which can be a powerful tool of redistributive policies, and facilitating entry into tertiary education (b) addressing financial constraints and (c) addressing long-term constraints, including addressing inequalities throughout the educational cycle. We use some of the general pointers for policy development, drawn from the OECD Thematic Review of Tertiary Education, which covered tertiary education policies in 24 countries.<sup>21</sup> The level of public resources going to tertiary education, as percentage of GDP, is relatively high in four countries, including the two richest and the two poorest: Costa Rica (1.5 percent), Panama (1.2 percent), Nicaragua (over 1 percent) and Honduras (about 1 percent). By contrast, El Salvador and Guatemala have traditionally spent less than 0.4 percent of GDP on public tertiary education (Figure 18).<sup>22</sup> Public expenditure on tertiary education in OECD countries represents on average 1.0 percent of GDP.<sup>23</sup> Among the high spenders in tertiary education, Costa Rica and Honduras devote a large share of public resources to the education sector as a whole – 6 percent in the former and 7 percent in the latter.<sup>24</sup> The other countries of Central America spend between 3 and 4 percent of GDP on public education.<sup>25</sup> These shares are low especially for the middle income countries, and reflect the low levels of public spending and revenue collection (Figure 19).

Ánnual per student expenditure in higher education is low, except in Costa Rica. Even in Panama, per student expenditure is only about US $ 3000 (in 2005 US $ PPP); in El Salvador, Guatemala, Honduras and Nicaragua, it lies between $ 1000 and $ 2000. With these low levels of spending, the quality of tertiary education is likely to be very low. In Costa Rica, on the other hand, per student spending has been rapidly rising since 2005, going from $ 5500 to $ 7500 in just 4 years, but this rise may not indicative of improvements in quality.<sup>26</sup>

> 21 The findings of this review are presented in Tertiary Education for the Knowledge Society, published in September 2008. Background reports prepared by 21 countries, Reviews of Tertiary Education in 14 countries and other documents of the review are also available on the OECD website www.oecd.org/edu/tertiary/review.

> 22 Data on public spending on education, as noted in the ICEFI (2010) report, are of variable quality. In particular, there are anomalies in the data for Nicaragua, and differences with figures reported in Ministry of Education reports.

> 23 OECD Education at a Glance 2011.  Expenditure on educational institutions as a percentage of GDP , by source of fund and level of education (2008)

> 24 The high level of public spending on education in Honduras is largely due to the relatively high wages for school teachers.

> 25 Author’s calculations based on ICEFI, 2010.

> 26 Author’s calculations based on ICEFI, 2010. Faculty-student ratios, a possible measure of quality, have not declined in Costa Rican universities and the rise in per student expenditures may be related to a rise in salaries.

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