Asia's Education Spending: Top and Bottom of the Pyramid

Asia-based households continue to spend significantly on educational activities outside of school, allocating an average 13 per cent of their total disposable income in 2014.  Mercifully over two-thirds of households save regularly for this purpose–though some have been known to plunge dangerously into debt–a fact consistent with past surveys and our own analysis

What is most intriguing about this spending is that it’s not confined to rich countries; in fact some of the poorest households in Asia, such as Myanmar and Bangladesh, are now enrolling among the highest proportion of their children in extra tutoring and academic preparation. The reasons should be familiar to anyone with knowledge of the region: a “keeping up with the Wang’s” mentality to survive the national exam race; often inferior public sector options; growth in overall consumption expenditure within households across the income spectrum; increasingly reliable technology access to learning from rural areas; and a move toward higher aspirational goals leading to University enrollment. 

Specifically, in Figure A below I utilize updated 2013-2014 survey results from MasterCard which gauge Asia-Pacific families and their propensity to enroll children in academic-related extracurriculars (excluding English language lessons).  I then place this enrollment percentage against household consumption expenditure across all major Asia-Pacific countries.  The vertical axis ranges from 0 to 60 per cent of children who are counted as enrolled within a survey household, and the horizontal axis measures average household consumption expenditure on a PPP basis of between US$2,000 to slightly over $30,000 annually.

Individual countries are noted by their abbreviations.

Figure A:  Percentage Enrolled in Academic Tutoring v. Household Expenditure (PPP basis)

The results are a higher enrollment rate among countries in the top left quadrant, being among the poorest on average: India, Bangladesh and Myanmar. Other countries in the same range of per capita expenditure such as Indonesia, Vietnam and the Philippines have much lower enrollment rates in academic tutoring by household. Richer countries such as Singapore, Korea and Taiwan average around 40 per cent. China enrolls children at less than half of India’s levels in extra tutoring. 

There are some outliers:  Vietnam has only 1 per cent of children surveyed enrolled in academic tutoring although 39 per cent of children were enrolled in English language training. The same is true for Indonesia, which enrolled an average 5 per cent in academic tutoring but 24 per cent in English.  By contrast, only 1 per cent of children in India enrolled in such English language preparations, suggesting markedly different priorities across the region.

 

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