To contain the cost of education, should countries only consider teachers’ salaries?

by Dirk Van Damme
Head of the Innovation and Measuring Progress Division, Directorate for Education and Skills

High-performing education systems value teachers and invest a lot in them. And indeed, the human factor is crucial in creating effective and high-quality teaching and learning environments. On average across OECD countries, the compensation of staff involved in education counted for 77% of total expenditure on secondary education in 2013 (Indicator B6 of Education at a Glance 2016). In monetary terms, the annual salary cost of teachers per student at the lower secondary level reached USD 3 389, on average across OECD countries in 2014, but this amount ranged from USD 1 000 in Mexico to USD 5 379 in Austria. However, we also know that it is not the amount of money invested that counts, but the way it is used. PISA reveals that, above a certain threshold, more money invested in education does not necessarily lead to better outcomes. Countries that may spend the same per student often put that money to different use.

The new Education Indicators in Focus brief, based on the most recent data published in indicator B7 of Education at a Glance 2016, deepens the analysis on the factors influencing the per-student salary cost of teachers. Each country’s per-student salary cost is based on a mix of four main factors: teachers’ salaries, teaching time, instruction time and class size. The figure above shows the weight of each of these four factors, compared to the OECD average, in each country’s per-student cost of teachers. The differences between countries are striking, especially between countries that arrive at a similar per-student salary cost of teachers, but based on a very different mix of the four components mentioned.

Take, for example, two countries with a similarly high per-student cost of teachers, the Flemish Community of Belgium and Germany. In the former, the per-student salary cost is relatively high, because all four components are more cost-intensive than the OECD average, adding up to a high total salary cost even if the teachers’ salaries are not very high. In Germany, teachers’ salaries are much higher, but their impact on the per-student salary cost is offset by more-than-average teaching time and lower-than-average instruction time.

At the other end of the spectrum are the Czech Republic and Turkey, countries with a relatively low per-student salary cost of teachers. In the former, instruction time, teaching time and class size are close to the OECD average, but the per-student salary cost is driven downwards by much lower teachers’ salaries (in real terms). In Turkey, teachers are better paid than their Czech colleagues, but the per-student cost is offset by less instruction time and larger classes.

Is there, then, a particular mix of components that makes an education system more effective? Apart from Korea, most high-performing countries in PISA are found towards the left of the chart, indicating a relatively higher-than-average per-student salary cost of teachers. But even those high-performing countries do not share a common mix of components – except, perhaps teachers’ salaries. In all high-performing countries except Finland, teachers’ salaries are higher than the OECD average.

The impact of other factors – including class size – is much less clear. Education at a Glance 2016 shows that many countries have reduced average class size over the past decade or so, responding to political pressure and public demand. But the evidence on the impact of smaller classes on the effectiveness and quality of teaching and learning is patchy. Analysis of PISA data reveals that there might be some positive impact from reducing class size, but much less than if teachers’ salaries were raised or if more were invested in teachers’ professionalism, instead. Some academic research evaluates the effect of smaller classes more positively, but this research is mostly limited to North America and Europe, whereas large classes are the norm in high-performing systems in Asia.

The factor of instruction time has a similarly uneven impact on performance. Some high-performing systems, as measured by PISA, such as Finland, require less instruction time than on average across OECD countries, thus offsetting the cost of higher teachers’ salaries. But other countries, such as the Netherlands, show above-average instruction time, contributing to a relatively higher per-student salary cost. The Education Indicators in Focus brief n° 22 looked into the issue of instruction time in more detail, but did not find any conclusive evidence on the relationship between instruction time and the quality of learning.

In times when governments need to contain the cost of education, improve the quality of teaching and learning, and increase the efficiency of spending, the cost of the teaching force is a major area of concern. The evidence shows that there is no magic formula for mixing the components of the per-student salary cost, but it does suggest that prioritising teachers’ salaries over class size and instruction time makes sense. Lowering teacher salaries might be the easiest way to cut costs – and the evidence suggests that countries have done this in the recent past in response to the financial crisis – but a more sophisticated look into all the factors influencing the cost of education might be more appropriate.

Education Indicators in Focus No. 46: What influences spending on education? by Camila de Moraes
Education at a Glance 2016: OECD Indicators
Programme for International Student Assessment (PISA)
Chart source: OECD (2016), Education at a Glance 2016: OECD Indicators,

Skills are the key to unlocking prosperity in Peru

by Andreas Schleicher
Director, Directorate for Education and Skills

Skills are central to the future prosperity and well-being of Peru’s people

Peru has been one of the strongest economic performers in Latin America with steady GDP per capita growth over the past decade, which has been accompanied by a sharp decline in poverty rates and a significant rise in educational attainment.This impressive track record can only be if supported by a process of economic diversification, in which skills and human capital must play a central role.

Peru’s goal for the future is to diversify the economy and tackle informality, boost productivity in firms and expand export capacity, while raising its capacity to innovate and take part in global value chains with more complex goods and services. All of which will require a stronger skills base. Achieving better and more equitable skills outcomes will also contribute to building a healthier, more equitable, and more cohesive society.

Now is the time for Peru to invest in developing skills that are relevant to the needs of a rapidly evolving labour market, to fully activate the skills hidden in informal employment arrangements and to make the best use of skills by promoting high performance workplace practices.

Skills investments pay off 

We know that in countries where a significant proportion of adults have poor skills, it is difficult to introduce productivity-enhancing technologies and new ways of working. This, in turn, stalls innovation and improvements in living standards.

Yet skills affect more than just earnings and employment. The Survey of Adult Skills (PIAAC) shows that adults with lower literacy proficiency are far more likely than those with better literacy skills to report poor health, to perceive themselves as objects rather than actors in political processes, and to have less trust in others. The Survey has been conducted in over 30 countries and new data on the skills of Peru’s adults (aged 16 to 65 years old) will be available in 2019. This comparative data shows clearly that people who lack foundation skills struggle to participate fully in society, democracy and the economy.

Countries that are the most successful in mobilising the skills potential of their people share a number of features: they provide high-quality opportunities to learn throughout life, both in and outside school and the workplace; they develop education and training programmes that are relevant to students and the labour market; they create incentives for, and eliminate disincentives to, supplying skills in the labour market; they recognise and make maximal use of available skills in workplaces; they seek to anticipate future skills needs and they make learning and labour market information easy to find and use.

Mapping Peru’s skills challenges together

The OECD Skills Strategy provides countries with a framework for developing co-ordinated and coherent policies that support the development, activation, and effective use of skills.

Since October 2015, we have been working closely with Peru in applying the OECD Skills Strategy framework as part of a collaborative project to build a more effective national skills strategy. The National Project Team established by the Peruvian government to oversee this process is co-ordinated by the Ministry of Labour and Employment Promotion, and includes representatives from the Ministry of Education and the Ministry of Economy and Finance.

Today, the results of this work are published in the OECD Skills Strategy Diagnostic Report: Peru that sets out 9 skills challenges for Peru. These challenges were identified in the course of several rounds of discussions with the National Project Team, technical meetings with Peru’s leading experts and input from over 100 stakeholders such as employers, trade unions, education providers and experts gathered during two interactive workshops held in November 2015 and May 2016 in Lima. The report also draws upon OECD analysis and data as well as that of the United Nations Educational, Scientific and Cultural Organisation (UNESCO), the International Labour Organisation (ILO), the World Bank, the Inter-American Development Bank (IADB), and national data.

Peru’s 9 skills challenges

So what are the main skills challenges facing Peru today?

With regard to developing relevant skills, the report concludes that Peru should focus on:

  • Improving school completion and foundation skills in compulsory education
  • Improving access to quality higher education and transition to work

When it comes to activating its skills supply, Peru will need to tackle the challenges of:

  • Improving the labour market institutional setting to boost formal employment
  • Extending the reach of active labour market policies to improve workers’ employability

Peru could make more effective use of the skills it already has by:

  • Improving the alignment between skills supply and demand and fostering a better use of skills in the workplace
  • Putting skills to better use to foster a more diversified and productive economy

Finally, Peru could strengthen the overall governance of the skills system by:

    • Improving learning and labour market information to support better education and career choices, and evidence-based policy making
    • Improving co-ordination across different actors and levels of government to achieve better skills outcomes
    • Building partnerships to ensure that policies are responsive to changing skills needs

      Building a shared road-map for action

      As the first non-member country to embark upon a National Skills Strategy country project with the OECD, Peru has demonstrated its commitment to leveraging international comparative data and good practice to tackle its own skills challenges. Equally, this analysis of Peru’s skills system will be of great interest to many other countries around the world.

      Throughout this initial diagnostic phase, we have witnessed first-hand a strong commitment to improving Peru’s skills outcomes across government, employers and trade unions, as well as education and training providers.

      The true test lies ahead, in designing concrete actions to tackle the skills challenges facing Peru. Government cannot achieve better skills outcomes alone, so moving from diagnosis to action will require a whole of government and a whole of society approach.

      The OECD stands ready to contribute to Peru’s ongoing efforts to achieve its ambitious goals in designing and implementing better skills policies for better jobs and better lives.

      OECD Skills Strategy Diagnostic Report: Peru
      Executive Summary (English)
      Executive Summary (Spanish)
      OECD Skills Strategy
      OECD Skills Outlook 2013: First results from the Survey of Adult Skills
      OECD Skills Outlook 2015: Youth, Skills and Employability
      A Skills Beyond School review of Peru, 2016
      For more on skills and skills policies around the world, visit:
      Photo credit: Man measuring SKILLS @Shutterstock

      New insights on teaching strategies

      by Pablo Fraser
      Analyst, Directorate for Education and Skills

      Education’s purpose is to prepare children for a fast-moving, ever-changing world. Teaching faces the additional challenge of classrooms becoming increasingly more culturally diverse. Now, more than ever, this requires an adaptation of current teaching strategies.

      The recent OECD working paper Teaching strategies for instructional quality: Insights from the TALIS-PISA Link data seeks to be a contribution to this debate, by providing information about the teachings strategies used by mathematics teachers in eight countries.

      What is the TALIS-PISA link database?

      In TALIS 2013, participating countries and economies had the option of applying TALIS questionnaires to a PISA 2012 subsample with the purpose of linking data on schools, teachers and students. We call this option the “TALIS-PISA Link” database. The TALIS-PISA Link provides us with valuable information about teaching strategies and their relationship with the characteristics of the school, the classroom and student's outcomes. A better understanding of these relationships can help teachers, schools, education policy makers to design more effective policies with the aim of improving the learning achievements of all students.

      What are the most common used strategies used by teachers?

      The analysis of the data showed that teaching practices can be classified in three groups:

      • Active learning strategies, which consist of promoting the engagement of students in their own learning. They typically include practices such as group work, use of information and communication technology, or student self-assessment.
      • Cognitive activation, which consists of practices capable of challenging students in order to motivate them and stimulate higher-order skills, such as critical thinking, problem solving and decision making.
      • Teacher-directed instruction, which encompasses practices based on lecturing and rely to a great extent on a teacher’s ability to deliver orderly and clear lessons.

      It would be inappropriate, however, to favour one form of strategy over another, since all of them contribute towards student learning – depending on the student’s skills and the context. For example, data has shown that students exposed to teacher-directed strategies are slightly more likely to respond to the less complex items in the PISA mathematics evaluation, while cognitive activation strategies seem to be moderately related to solving more complex maths items. However, these associations appear to be tenuous and further explorations on the association of these strategies with student learning are needed.

      The results of the report showed that teacher-directed practices and cognitive activation practices are the strategies more often reported. Three out of four teachers reported presenting “a summary of recently learned content” (teacher-directed practice) or that they “go over homework problems that students were not able to solve” (cognitive activation practices). However, only around one-third of teachers reported engaging frequently in active learning strategies. Indeed, the frequency in which active learning practices are used seems to be particularly low for mathematics teachers. The lack of engagement in these strategies may indicate that the necessary support and policies that would allow teachers to develop these strategies are not in place.

      What are the policies and the support that could foster the use of active learning strategies?

      The working paper evaluated the association of active learning with a myriad of factors located at the school, the classroom and the teacher levels. One of the most interesting results is that in all the eight participating countries, teacher self-efficacy showed as being positively associated with the implementation of active learning practices: the more the teacher feels confident in his or her ability to provide quality instruction, the more likely he or she will be to engage in active learning strategies. Indeed, teachers must feel confident in their abilities in order to implement relevant teaching strategies.

      Also, when teachers dialogue, support and exchange materials with their colleagues, they are more likely to engage in active learning practices. Teachers should not work as isolated agents, but rather to engage in professional networks and in collaboration with colleagues.

      What education policies can best support teachers’ self-efficacy?

      Results from TALIS 2013 have shown that the level of self-efficacy among teachers in a country is highly correlated with teachers’ participation rates in professional development. The more teachers participate in training activities, the more confident they feel about their ability to teach, and the more they use active learning strategies. If professional development is not available at the school, school leaders could try to foster other types of initiatives, such as mentoring programmes.

      What can schools do to promote collaboration among their teachers?

      School leaders can provide opportunities for fostering relationships among their staff in school by giving them a physical space where teachers can meet, or allowing time away from administrative work for teachers to meet and develop a relationship with their colleagues.

      Teachers everywhere are committed to helping their students achieve the best they are capable of. The OECD, through the study of the TALIS-PISA Link data, seeks to provide guidelines on how to support them. The study findings can inspire teachers and school leaders to co-operate using a wider palette of techniques to meet the needs of students with varying abilities, motivation and interests. The insights provided here can also inspire education policy makers to design teaching policies that could foster the implementation of innovative teaching strategies.


      OECD Education Working Paper No. 148: Teaching strategies for instructional quality: Insights from the TALIS-PISA Link data
      OECD Education Working Paper No. 130: How teachers teach and students learn: Successful strategies for school
      OECD Education Working Paper No. 115: Examining school context and its influence on teachers: linking TALIS 2013 with PISA 2012 student data

      Teaching strategies for instructional quality: Insights from the TALIS-PISA Link data brochure
      Asia Society (2016), Teaching and leadership for the twenty-first century: The 2016 International Summit on the Teaching Profession
      TALIS 2013 Results: An International Perspective on Teaching and Learning
      A Teachers’ Guide to TALIS 2013: Teaching and Learning International Survey
      Ten Questions for Mathematics Teachers … and how PISA can help answer them
      Icon credit: teacher by Hadi Davodpour, CC0 1.0, table source: OECD.

      A peek at PISA

      by Marilyn Achiron
      Editor, Directorate for Education and Skills

      Sorry, we can’t divulge the results (those will be announced on 6 December); but now that we have your attention, we thought you might like to learn a little more about the test, itself, so that when the results are finally announced, you’ll have a better idea of what those results mean.

      PISA 2015 focused on science, with the understanding that, although not every student is interested in becoming a scientist, all of us now need to be able to “think like a scientist” sometimes – to be able to weigh evidence and come to a conclusion, and to understand that scientific “truth” may change over time, as new discoveries are made. This month’s PISA in Focus walks you through a typical question in the PISA science test and explains what it can show about students’ proficiency in science. Each question is designed to reveal a certain skill or set of skills. In PISA 2015, these skills included explaining phenomena scientifically (based on knowledge of scientific facts and ideas), evaluating and designing scientific enquiry, and interpreting data and evidence scientifically. 

      If you’re curious to see how you might do on the PISA science test, you can test yourself on a few sample science questions at And if you want a broader idea of how PISA works – which schools and students get to participate, what PISA really aims to do, and how participating countries and economies might use PISA results – take a look at the short, animated video, “How does PISA work?” at the same address.

      Now, we know that you really want to find out the results of the PISA 2015 test, so…

      Come back on 6 December!

      PISA in Focus No. 66: How does PISA assess science literacy? Francesco Avvisati
      PISA à la loupe n° 66: Comment l'enquête PISA évalue-t-elle la culture scientifique ? 
      Find out more about PISA:
      Photo credit: © Hero Images Inc. / Hero Images Inc. / Corbis.