Estudio de los espacios públicos

When estimating the private costs of participation gap I differentiated between the individual’s and their employer’s costs, and within them between direct and indirect costs of education.

As private costs of participating individuals the following were calculated:

24

Average public cost in each sector in 1995 and in the 1995/96 school year 25

Main expenditure sum of the central budget was 1909.5 billion HUF

26

GDP in 1995 amounted to 5530,0 billion HUF. 27

Per student public cost of full-time education in kindergarten, primary and secondary school in the 1995/96 school year was between 117 000 and 137 000 HUF/person; costs are weighted by enrolment rate here

28

Per student public cost in higher education in 1995/96 was 420 000 HUF/person/year (rounded). When calculating short higher education programmes 50% of this amount was used.

29

Per student public cost in employees‘ primary school is applied here 30

The training cost weighted by enrolment rate for an unemployed in 1996 – according to OFA payments – was 83 000 HUF. In addition to training costs, 97.5 per cent of the unemployed received income supplement benefit, the per capita national average of which was 47 000 HUF. Thus, total per capita training cost was 130 000 HUF. (Source: Zsófia Szép, Györgyi Szígyártó (1997) 31

In 1995, in the active population 29 per cent were unqualified, 28 per cent were apprenticeship school graduates, 30 per cent completed secondary education, and 13 per cent completed higher education. As training costs of the unqualified, the costs of training for the unemployed (without the income supplement) in 1996 were taken into consideration, i.e. 83 000 HUF. In workers’ secondary schools per capita state support amounted to 45 900 HUF in 1996 - this sum was taken to calculate the specific further training costs of apprenticeship school graduates. Labour market training for the employed in 1996 was, in average, 37 000 HUF per capita. This sum was considered as state expenditure on training for secondary graduate labour force. In state financed part- time higher education per capita state expenditure was 141 000 HUF, this taken as further training cost for higher education graduates. The weighted mean of these costs was 66 400 HUF per capita/year. I calculated with this sum for training for the employed population.

• As direct private costs the costs of textbooks and teaching equipment were calculated. Tuition fee was only calculated for training for the employed. It was assumed that participants pay only about one-third of the training cost as tuition fee in case of further training for the employed.

• As indirect private costs travel costs were calculated, in addition in primary and higher education one- third of the annual mean net income was calculated as subsistence cost. In higher education, in addition, costs of living were also added.

• As other indirect private costs lost income was calculated, as according to the following:

- in the foundation learning sector and upper level public educational sector foregone earnings were not considered, because of the assumption that compulsory education (currently to the age of 16) will soon be raised to 18 years of age,

- for the higher educational sector the average annual net pay of all employees in 1995 was adopted,

- in case of unemployed adults foregone earning was obviously not considered,

- as for other adult training, the starting-point was that training programmes entail 50 days of consulting and examination on the average, when the participant is provided with the opportunity of educational leave during which s/he receives 80% of his/her average pay, therefore foregone earning is 4% of the annual average pay.

As employers’ costs of participants in training only indirect costs were calculated, i.e. costs of lost production due to training.

• In determining the indirect private costs of employers, the starting-point was that instead of foregone production it is easier to calculate substitution costs. It was assumed that in case of each adult training the national average gross wage and contributions have to be paid for the substitute worker and these are paid by the employer. In addition, average pay plus contributions have to be paid during the educational leave of the employee enrolled in training. These costs are the employers` private costs.32

32

In 1995, the national average monthly pay of all employees was 38 900 HUF/month, which was calculated for 13 months and with 44% contribution. (In case of manual workers the average monthly pay is 29 200 HUF/month).

Based on data from

1995

Costs of participants Costs of

employers Participat ion gap (in 1 000 person) Gap closing cost (billion HUF) In % of the 1995 GDP Direct private cost (tuition fee, books and appliances) (1 000 HUF/head) Indirect private cost (transport) (1 000 HUF/head) Other indirect private cost (foregone earnings) (1000HUF/he ad)33 Direct private cost (foregone output, substitution)34 (1 000 HUF /head/year) Foundation learning (kindergarte n, primary and secondary education)35 10 114 344,1 42,7 0,8% Higher education36 40 182 337 524,6 293,3 5,3% Training for unskilled adults37 10 30 1138 8739 872,2 59,7 1,1% Retraining for the unemployed 10 30 148,8 6,0 0,1% Training for the employed40 60 50 14 117 1468,1 353,8 6,4% Total _{755,4 13,7%} 33

Net average pays were calculated as 21 000 HUF/head/month for manual workers, and 26 000 for net national average (annual calculations include 13 months)

34

Employers‘ private costs were calculated with the method described above: manual workers‘ annual average pay plus contributions in 1995 was adopted for unskilled adults, and the average of mean annual pays and contributions of all employees in 1995 were applied for qualified adults.

35

In the foundation learning sector textbook costs were regarded as direct private cost (estimated average sum is 10 000 HUF/head/year). Other direct costs include a monthly average 1 000 HUF as transportation cost. In addition, one-third of the annual average net pay (8 500 HUF/head/month) is calculated for living/child care cost.

36

In case of higher education an average 3 000 HUF/month tuition fee (for 10 month), and 40 000 HUF/year textbook cost was determined. Foregone earning was equal to the average annual net pay of all employees in 1995, transportation cost was 2 000 HUF/head/month, and the accomodation (in dormatory) cost on the average was 6 000 HUF/head/month (the latter two are calculated for 10 months). In addition, one-third of the annual average net pay (8 500 HUF/head/month) is calculated for living cost (for 12 months).

37

In case of unskilled adult training full tuition fee exemption was assumed along with only 10 000 HUF/head as textbook, educational appliances and tuition fee cost. Foregone earning was determined as 4% of manual workers‘ annual net average pay in 1995, while the average transportation cost was 3 000 HUF/month (for 10 months).

38

Out of the 4411 thousand poorly qualified population only 1283 thousand, i.e. 29% were economically active in 1995. Lost production and foregone earning was, therefore, calculated only for 29 per cent of the participation gap.

39

See previous footnote. 40

As for the qualified population – taking state support into account – tuition fee was calculated to be 30 000 HUF/year on the average, another 30 000 HUF for textbooks and educational appliances, and 5 000 HUF/month for transportation cost (for 10 monts). Foregone earning was determined as 20% of the annual net average pay of all those employed in 1995.