Update (06/09/2017): Definitions & Explanations (Page 7, Marked in Red)

Jerusalem

August 20, 2017

246/2017

Update (06/09/2017): definitions & explanations (page 7, marked in red).

National Expenditure on Education in 2014-2016

Total national expenditure on education includes current expenditure in all public and private educational institutions, from pre-primary (kindergarten ages 0-6) to higher education, households' expenditure for private tutoring, textbooks, etc., as well as expenditure on the construction of new educational institutions and the purchase of equipment (fixed capital formation).

To tablesdiagrams' data

Definitions andExplanations

Total national expenditure on education in 2016, amounted to NIS 94.8 billion, comprising 7.8% of the Gross Domestic Product (Table 1). In 2016, the national expenditure on education (at constant prices) increased by 5.0%, following an increase of 3.3% in 2015, and 5.7% in 2014. (Diagram 1, Table 4). Current National Expenditure on education per capita increased by 3.0%,following an increase of 3.6% in 2015 (Table 4).

*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 5.7% in 2015.

Fixed capital formation, at constant prices, increasedby 4.9% in 2016, following an increase of 3.1% in 2015, 0.9% in 2014 and 16.6% in 2013. The sharpincrease in 2013reflected mainly the construction of kindergarten due to the entryof the law of free education from age 3 (Table 4).

National expenditure on education by operating sector (Table 1)

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,local authorities and non-profit institutions, by type of expenditure (Diagram 2)

In 2016, 75% of the current expenditure of government, local authorities and non-profit institutions on educational services was for labour costs, 21% for the purchase of goods and services, and 4% were computed expenditures on depreciation.

* Provisional data

National expenditure on education by financing sector (Diagram 3, Tables 3 and 4)

In 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 paymentfor 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%).

Detailed data on the funding of expenditure by financing sector and level of education for 2014 (the last year for which there isdetailed data),[1] 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 on education.

Data for 2014 on financingby level of education show that the government sector financed 94% of the current expenditure at the primary education, and75% - at the pre-primary education institutions.This is a significant decrease due to the fact that as of 2013, pre-primary education includeseducation for childrenaged 0-3, which increased the participation of Households'spending[2]. Therefore, when comparing with previous years, the financing of the government sector decreased. At secondary schools,the government sectorfinanced 85% of the expenditure.

The government sector also financed65% 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 yearsat this level of education.

Current national expenditure by level of education (Diagram 4, Table 2)

Current 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 mentionthatas 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 itas well, in line with OECD recommendation.

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

Current expenditure per student (Table A)increasedwith the rise of educational level.Data on the distribution of current expenditure per a student by level of education in2014 reveal that the cost of studies per a student in the higher education was almosttwo times higher thanthe cost per a student in the secondary education andalmostthree times higher than the cost per a child in the pre-primary education.

TABLE A. - CURRENT EXPENDITURE¹ PER STUDENT, BY LEVEL OF EDUCATION AND INDEX

(Expenditure per pupil in pre-primary education = 100)

2000-2014

Pre-primary education² / Primary education / Secondary education
/ Post-secondary education
(Type B) / Higher education
(Type A)
NIS thou-sands / Index / NIS thou-sands / Index / NIS thou-sands / Index / NIS thou-sands / Index / NIS thou-sands / Index
2000 / 11.8 / 100.0 / 15.4 / 130.5 / 19.2 / 162.7 / 25.2 / 197.4 / 39.7 / 336.4
2001 / 12.4 / 100.0 / 16.7 / 134.7 / 20.6 / 166.1 / 22.3 / 179.8 / 42.4 / 241.9
2002 / 13.4 / 100.0 / 17.0 / 126.9 / 21.7 / 161.9 / 22.4 / 167.2 / 41.2 / 307.4
2003 / 12.6 / 100.0 / 16.6 / 131.7 / 19.8 / 157.1 / 21.7 / 172.2 / 40.1 / 318.2
2004 / 13.4 / 100.0 / 17.0 / 126.9 / 20.3 / 151.5 / 21.0 / 156.7 / 40.8 / 304.5
2005 / 13.5 / 100.0 / 17.7 / 131.1 / 20.7 / 153.3 / 20.9 / 154.8 / 39.4 / 291.8
2006 / 12.3 / 100.0 / 18.7 / 151.6 / 20.2 / 163.4 / 22.2 / 180.2 / 38.1 / 308.6
2007 / 12.5 / 100.0 / 20.5 / 164.6 / 21.3 / 171.1 / 19.8 / 158.9 / 37.8 / 303.0
2008 / 13.4 / 100.0 / 19.9 / 149.1 / 23.5 / 175.8 / 19.6 / 146.4 / 41.4 / 309.4
2009 / 13.6 / 100.0 / 20.6 / 151.3 / 20.2 / 148.7 / 20.2 / 148.3 / 44.4 / 326.6
2010 / 13.1 / 100.0 / 21.9 / 167.4 / 20.2 / 153.9 / 18.4 / 140.8 / 43.9 / 335.2
2011 / 13.4 / 100.0 / 24.7 / 184.3 / 22.7 / 170.0 / 18.8 / 140.5 / 45.1 / 337.2
2012 / 13.8 / 100.0 / 26.1 / 189.0 / 24.2 / 175.1 / 19.8 / 142.9 / 48.4 / 350.0
2013 / 16.5 / 100.0 / 27.3 / 164.9 / 24.8 / 150.0 / 19.9 / 120.2 / 48.7 / 294.4
2014 / 17.5 / 100.0 / 28.1 / 160.7 / 25.6 / 146.3 / 18.5 / 105.9 / 48.8 / 279.1

1Including expenditures on educational services in educational institutions and additional expenses of households - including private lessons, and excluding textbooks and stationery purchased by households.

2As of 2013, education of children aged 0-3 is also included.

For additional information see: "National Expenditure on Education 1962-2015".

DEFINITIONS AND EXPLANATIONS

National Expenditure on Education- distinguishes between (1) current expenditure and (2) fixed capital formation.

1)Current expenditure includes the expenditure on educational services in various educational institutions, and additional expenses of households for textbooks and stationery purchased from business entities. These expenses are presented under one heading, and are not classified according to the manufacturing industriesin which the goods were manufactured.

2) Fixed capital formation includes expenditure on construction of buildings and purchase of equipment for institutions that provide educational services.

Current expenditure per student-Current expenditure per student is calculated by current expenditure divided to the number of students in each level of education.

Level of education-A stage in the progression from elementary learning to more complex learning. The levels of education are: pre-primary education, primary education, secondary education (lower secondary and upper secondary education), short-cycle tertiary education, and higher education (Definitions by OECD).

Educational Services and their Classification- The services classified as educational include: general administration, pre-primary educational institutions,primary educational institutions, secondary schools, tertiary education institutions,Yeshivot, Hebrew language instruction and other educational services.

Pre-primary educational institutionsinclude kindergartens and day care centers, forchildren aged 3 years and over.As of2013, according to the OECD guidelines, education for children aged 0-3is also included.It is important to mention that the subject of the day-care differs in its measurement at the CBS according to international classifications: In the national accounts, we do not take into account the day-care as part of the national expenditure on education, according to the international definitions of national expenditure on education (UOE Handbook- the OECD handbook for calculating national expenditure on education). On the other hand, in the Household Expenditure and Income Survey, the day-care are included because this is based on the COICOP classification and according to the Consumer Price Index.

Primary educational institutions also include Jewish religious primary schools ("Talmud Torahs"), missionary and special education schools.

Secondary schools also include general, vocational, nautical and academic schools,as well as intermediate schools, because the expenditures for these types ofinstitutions are not differentiated in the financial reports. Secondary educationalinstitutions also include secondary school yeshivot. The data for "secondary schools" includes data for the following sub-branches: general secondary schools, vocational, nautical and agricultural schools, Yeshivot and Jewish religious schools, Hebrew language instruction and adult education, and other educational services.

Yeshivot and Jewish religious schools include "lower" Yeshivot (for students up toage 18) and "higher" Yeshivot (for students aged 18 and over) – excluding those whostudy in Kollelim (for married students) attached to higher Yeshivot.

Non-academic tertiary education institutionsinclude technological colleges, regional colleges, kindergarten andteacher training colleges etc.; institutions that received recognition as institutions ofhigher education are excluded.

Institutions of higher education include institutions that have received recognition and authorization from theCouncil for Higher Education to award academic degrees.

Other educational services- This item includes, primarily, courses for adults and tertiary education courses. until 1983/84, this category included private teachers'services, courses, and supplementary courses. As of 1984/85, they are included in the category: primary education institutions and secondary schools-general and vocational.

Excluded are activities connected to leisure e.g.:short courses for adults in arts, dancing, gymnastics etc., driving schools and living costs scholarships for students.

Expenditure on education does not include the expenditure for nursing schools, which are usually attached to the hospitals in which they operate.

Due to lack of data, educational services provided by the Israel Defense Forces are not included, as well as education financed by employers (on the job training).

Expenditure on education includes expenditures for boarding schools attached toeducational institutions, and for university dormitories.Expenditures of medical schools at the universities (including medical research) are also included in the national expenditure on education.

Classification of Expenditure by Sector- The national expenditure on education is classified according to thefollowing sectors:

1. Government and national institutions.

2. Local authorities – municipalities, local and regional councils.

3. Governmental non-profit institutions that are financed primarily by the government.

4. Other non-profit institutions.

5. Business enterprises and households.

The first three groups are also presented as the General government Sector.

In the classification by operating sector, direct expenditure by the sector on labor and on goods and other services was recorded, regardless of the financing sector.

In the classification by financing sector, financing by each sector is defined as the total direct expenditure on goods and services (excluding depreciation)as well as the expenditure on subsidies, grants and other net transfers and payments to other sectors (excluding the provision of loans).

1

National Expenditure on Education in 2014-2016 20.08.2017

[1] The preliminary estimates of expenditure on education for the years 2016, 2015 and 2014 were based on detailed data of expenditure and income in the government's financial reports (compiled by the Accountant General), data on wages and number of employees of non-profit institutions obtained from the National Insurance Institute, and global estimates of the expenditure of local authorities for 2016 (the years up to 2015 are based on analysis of detailed financial reports).

Estimates of household purchases from commercial institutions are based on data obtained from the Household Expenditure Surveys up to 2015. Estimates for 2016 were made by extrapolation, using the changes in similar items of private consumption for which data was available.

Estimates at current prices for 2014 (the last year with detailed data for all sectors) were based on detailed analysis of expenditure and income items in the government's financial reports and in those of the national institutions and local authorities. The expenditure and income of non-profit institutions were derived from an annual survey conducted by the Central Bureau of Statistics.

[2]In accordance with the OECD guidelines.