254
Population Aging
Table 7.7 Public Spending on Education: Actuarial Balance, 2005–50 (Percent of GDP)
Country Uruguay Argentina Costa Rica Peru Chile Colombia Mexico Brazil Nicaragua Cuba Median Mean
Aging only
Aging and economic change
OECD 2050
OECD now
–0.4 –0.5 –0.9 –0.5 –0.6 –0.8 –1.2 –1.1 –1.0 –2.0 –0.9 –0.9
1.9 0.9 0.3 0.1 0.1 –0.5 –0.5 –0.5 –0.8 –2.8 –0.2 –0.2
1.3 0.4 0.2 0.7 –0.2 –0.4 –0.5 –0.5 –0.4 –3.2 –0.3 –0.3
3.1 1.7 1.8 2.3 0.4 0.1 0.4 0.2 0.6 –4.4 0.5 0.6
Source: Authors’ compilation.
projection period: “Aging and economic change,” “OECD in 2050,” and “OECD Now.” In the “Aging and economic change” scenario, both the enrollment rates and the benefit levels grow toward current OECD levels as income per worker rises. It is assumed that GDP/worker grows at 2.5 percent per year in all countries, and once a country reaches the mean OECD income/worker, benefit levels remain constant. Since benefits are measured in terms of GDP/worker, achieving OECD target levels means achieving similar spending per student as reflected in teacher salaries (relative to country-specific wage levels) and student/ teacher ratios. Neither OECD benefit levels nor OECD levels of enrollment will strain national budgets. As table 7.6 indicates, reductions in numbers of students will for all countries more than offset expenses associated with raising enrollment levels. For most countries, this remains true even if benefit levels are immediately increased. Part of the reason for this result is that universal primary education has already been achieved in all 10 countries. It is in secondary and tertiary education where there is room for further improvement in coverage. The average enrollment rate for secondary-age students in all 10 countries is 86 percent compared to 108 percent in OECD countries (for which data are available). At the tertiary level the corresponding figures are 40 percent compared to 67 percent.