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Financing of upper secondary education

Latvia’s annual expenditure per student by educational institutions for all services at upper secondary level in 2011 was USD 4 983. This stood well below the oECD average of USD 9 506, as seen in Figure 4.1 (OECD, 2014a). It was also below the level of USD 6 688 spent by its Baltic neighbour Estonia. In one of the schools visited for this review, a head teacher referred to the school budget as a “survival budget, not a development budget”. However, in relation to GDP, Latvia spent 25% of GDP per capita on each upper secondary student, which is comparable to the OECD and EU21 averages1 of 27%.

Figure 4.1. Annual expenditure per student, by upper secondary educational institutions (2011)

Countries are ranked in descending order of expenditure on educational institutions per student in upper secondary education.

Source: oECD (2014a), Education at a Glance 2014: OECD Indicators, oECD Publishing, Paris, http://

While on average across oECD countries, the cost per student rises in line with the level of education - from USD 7 428 for eCeC (3-6 year-olds) to USD 9 506 for upper secondary - in Latvia the costs for upper secondary (USD 4 983) are similar to the primary level (USD 4 982) and slightly below those for lower secondary (USD 5 019).

The difference in spending per student between general upper secondary education and vocational education is also unusual in Latvia. As Figure 4.1 shows, most OECD countries spend more per student on vocational programmes than on general ones, USD 9 307 and USD 8 613 on average respectively. This pattern is repeated in Estonia, for example which spends USD 6 153 per student on average on general upper secondary education, and USD 7 651 on vocational. In Latvia, in contrast, the levels are reversed: it spends USD 5 241 per student on general upper secondary education and USD 4 599 on vocational upper secondary education.

The maintenance of buildings and teaching resources are paid out of municipal budgets, apart from the schools financed directly by the central government. The evidence however suggests that some of the smaller municipalities lack the fiscal and human resource capacity to effectively manage their local school systems.

in addition, all of the 26 state gymnasia receive additional funding (EUR 1 423 per annum) for their regional role in the professional development of teachers. Questions have been raised about the effectiveness of this professional development approach (e.g. oECD, 2014b). MoES is currently piloting a new school funding model which will abandon the additional funding to gymnasia.

Vocational schools in latvia are largely dependent on the finances provided through the European Regional development Fund (ERDF), the European Structural Fund, and the European Social Fund (ESF). latvia also participates in a range of EU-funded projects designed to enhance vocational education. The department of Structural Funds and international Financial instruments of MoES has the key task of ensuring that these funds are used as efficiently as possible while Seda manages the funds related to education. latvia received EUR 54 million from the ESF to increase the attractiveness of vocational education and EUR 129 million from the ERDF to establish the first 11 of its planned network of 18 Vocational Education Competence Centres (VECCs; see below).

A clear challenge for the financing of vocational education is its sustainability once investment from EU funds falls way. This is also an issue for other EU countries, to varying degrees, but latvia seems particularly dependent on this source of funding to drive forward its plans to improve both the status and quality of its vocational education system.

Vocational schools can generate additional resources (in the form of funds or equipment) by carrying out projects or commissions for local employers. Some 20% of the budget of the Riga Technical School, for example, comes from commercial activity and a further 10% from fee-paying short courses. Some employers also support schools by giving or loaning them equipment such as wood turning machines for carpentry classes.

No national data are available on employer and individual contributions to the financing of continuing vocational education, but international comparative studies find that the latvian tax system does not encourage employers to invest in training (Cedefop, 2015). Nevertheless, MoES data collected in 2012 show that municipalities invested approximately EUR 2.25 million in non-formal education of 63 000 adults. The level and type of investment varied across the country with some local governments employing a range of strategies to support adults.

Another challenge for some vocational schools is that some municipalities have discouraged students leaving basic education from entering vocational education by impugning the reputation of vocational schools and offering benefits, including financial support, if students continue their studies in general education (iMF, 2013). There are reports that in some areas financial incentives have been offered to young people to remain in local government-controlled schools (iMF, 2013). The incentive for municipalities to act in this way stems from the current funding model. Unlike most vocational schools, general upper secondary schools are mostly owned by municipalities.

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