Measure 1: Resources

How ‘Resources’ were measured and the results the 2013 study produced.

A necessary condition for a well performing higher education system is that it is adequately resourced, whether by government or the private sector. One measure is expenditure of tertiary institutions as a share of GDP. But for low income countries, especially those with a high student-age population, a high share of GDP may not translate into high expenditure per student, so we also include the latter. In the absence of quality of teaching measures that are comparable across countries, resources per student in part serve as a proxy. In order to measure the contribution of tertiary education to a nation’s research effort we also include measures of expenditure on R&D in tertiary institutions. Thus our five measures of resources are:

  • R1: Government expenditure on tertiary education institutions as a percentage of GDP, 2009.
  • R2: Total expenditure on tertiary education institutions as a percentage of GDP, 2009.
  • R3: Annual expenditure per student (full-time equivalent) by tertiary education institutions in USD purchasing power prices, 2009.
  • R4: Expenditure in tertiary education institutions for research and development as a percentage of GDP, 2010.
  • R5: Expenditure in tertiary education institutions for research and development per head of population at USD purchasing power prices, 2010.

Government expenditure on higher education as a percentage of GDP is highest in Saudi Arabia, with four countries equal second: Denmark, Finland, Malaysia and Ukraine. Malaysia’s high position is in part due to its high capital expenditure. Compared with last year’s Rankings, the median level of expenditure has increased from 0.95 to 1.10 per cent of GDP, so that for a country to maintain its ranking, government expenditure must have increased. Norway, where government expenditure fell as a share of GDP, has fallen from equal first ranked in the 2012 Rankings to 14th in the 2013 Rankings. The United States slipped from rank 19 to rank 27, Croatia from 28 to 37. Conversely, Russia’s ranking improved from 26 to 18. Malaysia and India improved markedly in the Rankings as a result of more recent data becoming available (previously data were available for 2006 only).

As in last year’s Rankings, the highest levels of total expenditure on education as a share of GDP occur in two countries with high levels of private expenditure (above 1.5 per cent of GDP), Korea and the United States. Total expenditure as a share of GPD is next highest in Canada, Chile, Malaysia and Saudi Arabia.

The United States continues to dominate the expenditure per student rankings. Switzerland and Canada are next in the rankings but the absolute level of expenditure per student is only three-quarters that in the United States. Changes compared with the 2012 Rankings are small (never more than four places) which implies that changes in the GDP shares (both R1 and R2) are driven primarily by changes in GDP and that expenditures on higher education do not closely follow short-term fluctuations in GDP. Note that the data relate to a period of above average variations in GDP during the Global Financial Crisis.

Expenditure by tertiary institutions on research and development is highest in Denmark and Sweden; expenditure is also high in Finland, the Netherlands and Switzerland. Compared with the 2012 rankings, R&D expenditure in tertiary institutions has risen relatively in Poland and Slovakia but fallen in Croatia and Italy.

In averaging over the five variables we give a double weight to R1, R2 and R3. The highest ranked country is Denmark followed by Canada and Sweden. The next ranked countries are Finland, the United States and Switzerland. Compared with the 2012 Rankings, Chile has risen 10 places and Malaysia has risen 11 places. Our previous method of dealing with missing values gave an upward bias to the ranking of countries with relatively low levels of GDP. The new rankings for Iran, Thailand, Turkey and Ukraine more accurately reflect their true positions.