Equity and efficiency in public education expenditure in South Africa : analysis of recent evidence

Thus concludes this analysis of recent data on South Africa"s education system. Major findings are: (1) public education cannot be made available freely to all, even at its currently dismal level of quality, without a budgetary explosion; (2) the existing educational subsidy system is inequitable, even within traditionally disadvantaged groups -- especially at the university level where scholarships are provided disproportionately to the relative elites within those groups; (3) because educational investments have favored certain groups (whites, Africans at university), returns in these areas are much lower than could be obtained by investing more in secondary education of Africans; (4) private willingness to pay for education is relatively high, indicating that fiscal savings or quality improvements could result from targeting subsidies toward the poor rather than providing free education to all. The paper concludes by recommending a multi-tiered system of subsidies, where effort in financing and governance is elicited from parents according to their ability to pay and organize. This would result in a unified system of national education combining elements of public and private but with no clear-cut division between the two.