1. GENERAL_____________________________________________________112. MAIN FINDINGS________________________________________________13

National Expenditure on Education by Operating Sector_________________14Current Expenditure of General Government and Non-Profit Institutions, by Type of Expenditure_______________________________________________14National Expenditure on Education by Financing Sector_________________15Current National Expenditure by Level of Education_____________________16Combined Account of the Universities (for details on the universities, see Section 3 – Definitions, Para. 3.2)____________________________________17International Comparison___________________________________________18Expenditure on Education per Pupil, by Level of Education_______________22National Expenditure on Education, by Type of Expenditure and Level of Education________________________________________________________25

1. GENERAL

This publication presents summaries of the national expenditure on education

through 2016.1 Complete data on the expenditure are presented for the period

through 2014 – the last year for which detailed financial reports of actual

expenditure were received from the government, local authorities and non-

profit institutions. The estimates for 2015–2016 are based on partial data, and

therefore indicate only general trends.

Compared with the series that appeared in the previous publication,1 current

revisions have been introduced here for the period from 1995 to 2014, based

on detailed financial reports or on additional information. As of 2000, changes

were introduced following the incorporation of revised results from Household

Expenditure Surveys (see: Section 5, Reliability of the Estimates, Para. 5.2). In

addition, as of 1995, the calculation of consumption of fixed capital has been

updated in the government, local authorities, and non-profit institutions, at current

and constant prices.

More changes were updated in the expenditure of private tutoring in current and

constant prices purchased by households in the years 2006–2016. In addition,

there have been changes in the calculation of income and expenses of NPI's due

to a change in the sample and change in the method of data collection beginning

in 2009. A correction was made in the calculation of the Universities investments in

the years 2008–2014. Additional amendments were made in 2006, in local

authorities' transfers and purchases. Estimates at constant prices for the years

1970/71 to 2010, were originally computed at different price bases and then were

calculated in constant 2010 prices by chaining the changes (see details on p. 51).

Section A presents tables containing multi-annual series data:

Table 1 presents a series on national expenditure on education from the

1962/63 budget year through 2016, by operating sector. The table also

1 For previous estimates, see: Central Bureau of Statistics (2016). National Expenditure on Education 1962-2015. Publication 1662. Jerusalem: Author, and Central Bureau of Statistics web site, Annual Data 2017.

( 11 )

presents data on the expenditure for education and its components, in relation

to the Gross Domestic Product, consumption, and capital formation.

Table 2 presents a breakdown of national expenditure by level of education for

the period from 1962/63 to 2014.

Table 3 presents series on the main components of national expenditure on

education, at constant prices, for the period from 1970/71 to 2016. As of 1995,

the estimates of national expenditure on education at constant prices have

been weighted according to the prices in base year 2010.

Table 4 presents expenditure on education, excluding consumption of fixed

capital, by financing sector (government and local authorities), for the period

from 1966/67 to 2014.

In Section B, Tables 5 and 6 present additional details by financing sector, for

the period from 2006 to 2014.

The tables provide details of funding from government, local authorities, non-

profit institutions and households, by level of education or by types of receipts

and disbursements.

In Section C, the tables present details by operating sector, for the period

from 2006 to 2014:

Table 7 presents combined data, by type of service and operating sector.

Table 8 presents a breakdown of expenditure by all agencies that do not

usually operate on a commercial basis – the government, local authorities and

non-profit institutions.

Table 9 presents the expenditure of the government, local authorities, and

non-profit tertiary education institutions.

Section D presents appendices to the national expenditure on education:

Table 10 presents the combined account of receipts and disbursements in the

universities for the academic years 2005/06 to 2014/15.

( 12 )

Tables 11 and 12 present combined accounts of receipts and disbursements

in non-profit educational institutions in the government sector and in non-

governmental non-profit educational institutions, for the years 2006 to 2014.

2. MAIN FINDINGS

Total national expenditure on education in 2016, amounted to NIS 94.8 billion,

comprising 7.8% of the Gross Domestic Product. In 2016, the national

expenditure on education (at constant prices) increased by 5.0%, following an

increase of 3.3% in 2015, and 2.0% in 2014 (Diagram 1, Table A). Current

National Expenditure on education per capita increased by 3.0%, following an

increase of 3.6% in 2015.

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DIAGRAM 1. NATIONAL EXPENDITURE ON EDUCATION(AT 2010 PRICES)

* Provisional data.

Current national expenditure on education (total expenditure excluding fixed

capital formation), at constant prices, increased by 5.0% in 2016, following an

increase of 3.3% in 2015.

Fixed capital formation, at constant prices, increased by 4.9% in 2016,

following an increase of 3.1% in 2015, 0.9% in 2014 and 16.6% in 2013. The

sharp increase in 2013 reflected mainly the construction of kindergarten due to

the entry of the law of free education from age 3.

( 13 )

National Expenditure on Education by Operating Sector In 2016, most of the education services (82%) were provided to the population

by educational institutions of the government, local authorities and non-profit

institutions that are mainly financed by the government (e.g. the universities,

the ORT and Amal educational organizations etc.).

The value of services provided by educational non-profit institutions (mainly

financed by private sources) in 2016 was 8% of the national expenditure on

education.

The share of educational services provided on a commercial basis, e.g.: pre-

primary services, private tutoring (including supplementary instruction for

school pupils), courses for adults, textbooks, etc., amounted to 10%.

Current Expenditure of General Government and Non-Profit Institutions, by Type of ExpenditureIn 2016, 74% of the current expenditure of government, local authorities and

non-profit institutions on educational services was for labor costs, 22% for the

purchase of goods and services, and 4% were computed expenditures on

depreciation.

Labour cost74%Purchases of

goods and services

22%

Depreciation4%

DIAGRAM 2. CURRENT NATIONAL EXPENDITURE ON EDUCATION IN GENERAL GOVERNMENT, LOCAL AUTHORITIES AND NPI'S,

BY TYPE OF EXPENDITURE *2016

* Provisional data.

Total NIS 78.9 billion

( 14 )

National Expenditure on Education by Financing SectorIn 2016, the government sector (government, local authorities and non-profit

governmental institutions) financed 78.1% of the total national education

expenditure – similar to 2015 (78.1%). The rest of the expenditure was

covered directly by households (including private non-profit institutions)

through payment for purchasing education services; tuition fees; buying

textbooks and stationery from businesses, etc., as well as by donations and

grants to educational institutions from domestic sources and from sources

abroad (21.9%) (Table A).

Detailed data on the funding of expenditure by financing sector and level of

education for 2014 (last year with detailed data), show that the government

sector financed 76.4% of the total expenditure, and that households (including

private NPIs) financed 23.6% of the total expenditure.

Data for 2014 on financing by level of education show that the government

sector financed 94% of the current expenditure at the primary education, and

75% – at the pre-primary education institutions. This is a significant decrease

due to the fact that as of 2013, pre-primary education includes education for

children aged 0–3, which increased the participation of Households' spending.

Therefore, when comparing with previous years, the financing of the

government sector decreased. At secondary schools, the government sector

financed 85% of the expenditure.

The government sector also financed 65% of universities expenditure

(excluding separately budgeted research), 47% of college's expenditure

(academic and non-academic) and 9% – of the expenditure of other

institutions. In 2013, it was decided to separate the colleges (academic and

non-academic) from other institutions, which include Hebrew teaching, courses

for adults and other educational services. That is the reason why this data is

not comparable to previous years at this level of education (Diagram 3).

( 15 )

75

9484

65

46

9

25

616

35

54

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DIAGRAM 3. NATIONAL EXPENDITURE ON EDUCATION, BY FINANCING SECTOR AND LEVEL OF EDUCATION

2014

Government, Local Authorities & non profit institutions Households and Donations

Current National Expenditure by Level of EducationCurrent expenditure on pre-primary, primary (including supplementary

lessons) and secondary (including private tutoring) in educational institutions in

2014 reached 69% of current national expenditure on education; out of this

amount, 14% were directed towards pre-primary education institutions, 30% to

primary education and 25% – to secondary education. It is important to

mention that as of 2013, current expenditure on pre-primary education

increased due to the fact that in this year, expenditure on education of children

aged 0–3 was added to it as well, in line with OECD recommendation.

The expenditure on tertiary educational institutions reached 19% of the current

national expenditure on education (Diagram 4, Table 2).

( 16 )

Current expenditure per student increased with the rise of educational level.

Data on the distribution of current expenditure per a student by level of

education in 2014 reveal that the cost of studies per a student in the higher

education was almost two times higher than the cost per a student in the

secondary education and almost three times higher than the cost per a child in

the pre-primary education (Table B).

Combined Account of the Universities (for details on the universities, see Section 3 – Definitions, Para. 3.2)The combined account of the universities is presented in Table 10. The table

covers all their activities, including teaching and associated research, as well

as courses and research that are budgeted separately. This combined account

facilitates examination of the total resources that were available to the

universities, compared with the various expenditures on all their activities. It

should be noted that national expenditure on education does not include

expenditure on separately budgeted research.

The combined account of the universities was compiled in accordance with

their financial reports. The recorded income, deficit, or surplus does not

include financial commitments from various entities.

( 17 )

The combined account indicates that in the academic year 2013/14 (from

October 2013 to September 2014), 90.7% of the total expenditure of universities

was current expenditure for goods and services; approximately 5.5% was for

student scholarships, awards, and other forms of support; and 6.1% was capital

formation in buildings and equipment. That same year, there was a surplus of

finance income to finance expenses (-2.3%).

In the 2013/14 academic year, 73.5% of the current expenditure for goods and

services was used for teaching and associated research; 17.2% was used for

separately budgeted research.

The government financed approximately 55.3% of the expenditure of

universities (by current transfers) in 2013/14, similar to the previous year.

Income from the government included special allocations to cover the

universities’ cumulative deficit and the enrollment of immigrant students.

International Comparison2

The data shown here were taken from the official publication of the OECD:

Education at a Glance 2017.

Comparison of countries belonging to the OECD, for 2014, reveals that the

levels of expenditure changes significantly from country to country. The share

of national expenditure on education out of the Gross Domestic Product in

Israel (6.6%) was one of the highest compared to all other countries examined

(Diagram 5). In Finland it was equal to Israel and in Sweden and the United

States the percentage of expenditure of the GDP was similar to Israel (6.7%).

The OECD countries invest 5.8% on average, in educational institutions.

(Table 3).

However, when making comparison of the national expenditure on education,

it is important to bear in mind that Israel has a higher percentage of young

people in its population, than the OECD countries. The percentage of Israeli

residents who work and can finance expenditures on education is relatively 2 In calculating the international comparison of total national and public

expenditure on education as a percentage of GDP, pre-primary institutions and other educational institutions were not included.

( 18 )

small, while the percentage of students is relatively high. In 2014, the

percentage of the population aged 0–24 in Israel reached 42.6%. By

comparison, the percentage of the population aged 0–24 in other OECD

countries was far lower and reached 28.9% on average (see below).

Population by Age Group 0–24 in Israel and Selected OECD CountriesPercent of total population – 2014

42.6Israel33.4United States32.9Ireland31.2Norway30.1Denmark30.0France29.9United Kingdom29.8Sweden29.2Netherlands28.4Finland24.3Spain23.9Germany23.4Italy

Source of data: United Nations-Population Division: World population prospects 2017.

Statistical abstract of Israel No. 67, 2016.

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DIAGRAM 5. NATIONAL AND PUBLIC EXPENDITURE IN EDUCATION INSTITUTIONS, AS A PERCENTAGE OF GDP

2014

Public expenditure on education as a percentage of GDP

Total expenditure on education as a percentage of GDP

Comparison of the expenditure in educational institutions by level of education

(Table 6) shows that in Israel the expenditure was higher in primary and

secondary educational institutions and pre-academic preparatory courses –

4.3% of the GDP, compared to 3.7% in the OECD. However, in post-

secondary and higher education, the expenditure as a percent of the GDP in

Israel was 1.5%, similar to OECD countries.

The public expenditure on education in institutions in Israel (expenditure of

government ministries, the National Insurance Institute, national institutions,

local authorities and public non-profit institutions), including scholarships to

students, reached 4.7% of the GDP in 2014, similar to the OECD average –

4.8%.

( 20 )

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DIAGRAM 6. RELATIVE SHARE OF PUBLIC AND PRIVATE EXPENDITURE IN EDUCATIONAL INSTITUTIONS, AT ALL LEVELS OF EDUCATION

2014

Public sources Private sources

The share of public expenditure out of the total finance of education in Israel in

2014 was 78.8% (diag. 6, table I). The share of public expenditure in the

national expenditure on education in OECD countries ranged from 64%

(Chile) to 99% (Norway).

In primary and secondary educational institutions and in pre-academic

preparatory courses in Israel, the public finance in 2014 reached 88.3%, close

to the average of OECD countries in the same year – 91.3% and similar to the

public financing in Spain – 87.7%.

In tertiary education, finance from private sources was more common in Israel

and reached 47.9%, higher than the average in other OECD countries –

30.1%, and lower than some countries: the United Kingdom – 72.1%, the

United States – 65.3%, and Australia – 61.2%. However, in some countries the

private financing was particularly low: Iceland – 8.7% and Austria – 5.6%

(Table I).

The share of public expenditure on education out of the total public

expenditure (Diagram 7) in Israel was 11.6% – higher than the average in

( 21 )

OECD countries – 11.3%. The share of public expenditure on primary,

secondary education and pre academic preparatory courses out of the total

public expenditure in Israel was 9.5%, higher than the average in OECD

countries – 8.3%.

However, the share of public expenditure on tertiary education out of the total

public expenditure in Israel was 2.2%, lower than the average in OECD

member countries – 3.1%. (Table G).

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DIAGRAM 7. PUBLIC EXPENDITURE ON EDUCATION BY LEVEL OF EDUCATION, AS A PERCENTAGE OF TOTAL PUBLIC EXPENDITURE

2014

All levels of educationTertiary education institutionsPrimary and secondary institutions and pre-academic preparatory courses

Expenditure on Education per Pupil, by Level of EducationA comparison of the average expenditure per pupil/student in terms of

Purchasing Power Parities (PPP) reveals that the average expenditure per pupil

in Israel at all levels of education was lower than the average in OECD member

countries (Table D, Diagram 8).

( 22 )

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DIAGRAM 8. EXPENDITURE ON EDUCATION PER PUPIL/STUDENT IN PUBLIC AND PRIVATE INSTITUTIONS, BY LEVEL OF EDUCATION

2014

OECD countries Israel

(1) Based on purchasing power parity.

The expenditure per pupil in Israel in primary to tertiary education was $7,758

(in terms of Purchasing Power Parities – PPP), lower than the average in

OECD countries – $10,759 and similar to the Czech Republic ($7,751) and

Poland ($7,374).

In Pre-Primary education (ages 3 and up), the expenditure per pupil in Israel

was lower than the average in OECD countries by 50%.

In primary education, the expenditure per pupil in Israel was similar to

Spain, but lower than the average in OECD countries by 22%.

In secondary education, the expenditure per pupil in Israel was lower than the

average in OECD countries. In Hungary and Mexico the expenditure was

lower than in Israel. The expenditure per pupil was particularly high in Austria,

the United States, Norway, United Kingdom and Belgium.

In tertiary education institutions, the expenditure per student on education in

Israel was lower by 20% than in OECD countries3. In some of the countries

3 This year, there was a change in expenditure per student in Tertiary education due to methodological change in the number of students studying at the Open

( 23 )

(Spain, Czech Republic, Mexico, South Korea, Hungary and Iceland) the

expenditure per student was even lower than in Israel (Diagram 9 and 9a,

Table D).

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DIAGRAM 9. EXPENDITURE ON EDUCATION PER PUPIL IN PUBLIC AND PRIVATE INSTITUTIONS, PRE-PRIMARY AND PRIMARY EDUCATION

2014

Pre-Primary education Primary education

(1) Based on purchasing power parity.

University.

( 24 )

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DIAGRAM 9A. EXPENDITURE ON EDUCATION PER PUPIL/STUDENT IN PUBLIC AND PRIVATE INSTITUTIONS, SECONDARY AND TERTIARY

EDUCATION 2014

Tertiary education Secondary education

(1) Based on purchasing power parity.

The data on the national expenditure distribution by educational level (Table E)

reveals that the expenditure per student in post-secondary and tertiary

education institutions in Israel was almost two times the expenditure per pupil

in secondary educational institutions, similar to Germany, New Zealand, the

Czech Republic and Finland.

National Expenditure on Education, by Type of Expenditure and Level of EducationA comparison of the types of expenditure reveals that in primary education

institutions in Israel, the share of labor costs out of the total current

expenditure was 82%, higher than the average in the OECD countries – 78%.

The data on total labor costs also include wages of employees who are not

teachers, as well as an estimate of the value of the budgetary pension of

government employees.

In Primary institutions, the share of fixed capital formation from the total

expenditure in Israel (11%) was higher than the share in the OECD countries

(8%).

( 25 )

In post-secondary and tertiary education institutions, the share of

compensation of employees from the total current expenditure in Israel

reached 70%, similar to Netherlands (71%), and higher than the average of

67% in OECD countries. The share of fixed capital formation in these

institutions in Israel was 6%, lower than the average in OECD countries – 11%

(Table H).

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DIAGRAM 10. EXPENDITURE ON EDUCATIONAL INSTITUTIONS IN PRIMARY EDUCATION, FROM PUBLIC AND PRIVATE SOURCES,

BY TYPE OF EXPENDITURE2014

Labour costs Other expenditure

( 26 )

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DIAGRAM 10A. EXPENDITURE ON EDUCATIONAL INSTITUTIONS IN TERTIARY EDUCATION, FROM PUBLIC AND PRIVATE SOURCES, BY

TYPE OF EXPENDITURE 2014

Labour costs Other expenditure

( 27 )