USE 2030: Exploring Impacts, Costs, and Financing

Abstract

Sustainable Development Goal 4 calls for inclusive and equitable quality education and lifelong learning opportunities for all. The first target of that goal motivates this report: “By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and effective learning outcomes.” We focus on the broad human and social development impacts of reaching universal secondary education in low- and lower-middle-income countries. We consider also the costs of, return to, and financing for universal secondary education by 2030. We use a long-term forecasting system called International Futures to develop a Base Case (the path we seem to be on), a USE2030 scenario that represents changes in education participation across all levels, and an aggressive but reasonable variation (USEAbR) that is more tailored to the starting conditions and potential of individual countries, even as it remains ambitious.

In analyzing impacts of USE2030, we look out to 2050, and sometimes 2060, because it takes time for newly educated students to have broad impact. We measure impact relative to the Base Case, which also shows continuing, but slower, advance in education participation. For low-income countries, USE2030 increases GDP per capita at PPP by 3 percent in 2030 and 25 percent in 2050. Life expectancy advances by 0.7 and 1.9 years, while infant mortality drops by 1.9 and 5.9 per thousand. USE2030 reduces fertility by 0.19 and 0.51 children per woman, leading to populations that are 3.9 and 59 million lower than the Base Case.

Lower-middle-income countries show lesser gains because their educational changes in USE are smaller relative to their starting point. For example, in 2015 the upper secondary gross enrollment rate for lower-middle-income countries was 56 percent, while that for low-income countries was just 29 percent. Even so, USE increases the average low-middle-income country GDP per capita at PPP by 1.2 percent in 2030 and 8.4 percent in 2050.

Turning from the many benefits of USE2030 in terms of human well-being, the large investments needed to reach USE2030 would pay for themselves in 25 years just in terms of cumulative rise in GDP for both low-income and lower-middle-income countries. That return would rise steadily and sharply in subsequent years. By 2050, it would be $1.6 trillion for lowincome countries, while for lower-middle income countries (with a much higher GDP base) it could be $5.4 trillion.

The incremental education spending needs in low-income countries relative to the roughly 4.5- 5.0 percent of GDP spent on education in the Base Case rise by about another 6 percent in the early 2030s (1.6 percent for lower-middle-income countries). Constraining the natural push of new secondary graduates into tertiary education would limit those rises considerably; at Base Case tertiary enrollment rates, low-income countries would reduce incremental costs to 3.0 percent of GDP. Shares of GDP directed by donors to foreign aid would need to rise significantly simply to maintain a steady contribution to the GDP of recipient countries because of the latter’s more rapid economic growth. Much or most of the incremental costs will require additional domestic revenue raising or private spending in low-income countries.