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The Cost Inefficiency of Public Primary Education in Japan

Author

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  • Hitoshi Saito

    () (Graduate School of Economics, Osaka University)

Abstract

Under the current fiscal conditions in many local, regional as well as the national government, the public schools face the substantial budget short falls . In order to alleviate the substantial budget shortage, it is important to raise efficiency, particularly in primary education as the costs of primary education are dominant part of the budget spending. Improving the productivity of human capital is also essential for providing bet ter quality service, and this can be also achieved by raising efficiency in primary education. This paper reports the empirical study on inefficient education spending in public schools, particularly for primary education by using Stochastic Front i e r Analysis (SFA). By applying Tobit Model in our analysis of ineff iciency of public school spending in primary education, we were able to locate the source of the problem was triggered by the decrease in the number of schools as a result of declining birth rates and the number of school children. Based upon our study using the estimated cost funct ions related t o ineff iciency of spending, we conclude that the larger schools with greater number of students perform better at cost efficiency than the smaller schools with smaller number of students.

Suggested Citation

  • Hitoshi Saito, 2010. "The Cost Inefficiency of Public Primary Education in Japan," Discussion Papers in Economics and Business 10-15, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  • Handle: RePEc:osk:wpaper:1015
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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1015.pdf
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    Keywords

    Primary Education; Educational finance; Cost Inefficiency; Local government;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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