This paper reviews the influence of institutional changes to the educational resource allocation system on per pupil expenditures and analyses the relationship between these financial variables and the quality of education.
Since 2001, a series of institutional changes to the educational resource allocation system have brought both financial flexibilities and larger responsibilities to the Prefectural Boards of Education for securing the revenue for teacher salaries. Taking advantage of these changes, the Boards of Education hired more part-time teachers to achieve the reduction of class size. Nevertheless, disparities among prefectures in regard to teacher salaries, teacher/pupil ratio, and per pupil expenditures remain small.
As a result of this correlation analysis, two findings are obtained.
Firstly, it is found that prefectures with a large financial capability index, which hold large population of compulsory school age children, class size is large while teacher/pupil ratio and per pupil expenditures are low. On the other hand, the prefectures with a small financial capability index have a higher teacher/pupil ratio. In the latter case, expenses per pupil for instructional activities, facilities and equipment are also higher than the former. This fact means decentralization has not caused educational finance disparities.
Secondly, the correlations between educational resources and the variables which represent the quality of education, such as academic performance (average percentage of questions answered correctly), frequencies of problematic behavior of students, and teacher disciplinary action were not found. This indicates that the quality of education is not defined by the state of educational finance. It is implicated that under the framework of the Standards of Class Size and Teacher Allocation in Compulsory Schools, disparities in educational finance among prefectures are small, and the equity in education is ensured.
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