The Determinants of School Budgets: Per Class and Per Student
Author: Nachum Blass, Haim Bleikh Policy Research

The Ministry of Education per-class and per-student budget has increased significantly in recent years. Most school budgets are allocated according to fixed formulas, and principals and other officials in the system have limited influence as to their scope. However, despite the universal formulas, after controlling for various school characteristics, budgeting is highest in the State-religious schools and lowest in the Arab Israeli schools.

  • There are several important characteristics that affect the per-student and per-class budget in regular official primary education (institutions that contain grades 1-6 only): the school’s Nurture Index – the higher the index (which indicates a weaker socioeconomic profile), the higher the allocation per student; the size of the school – the larger it is, the lower the allocation per student; and the presence of a “long school day,” which increases expenditure per class by an average of 14%, and per student by 15%.
  • An analysis that isolates each factor affecting the budget shows that the vast majority of explained variance has to do with factors that are difficult to influence, such as: Nurture Index, participation in the “long school day” program, and the size of the school. On the other hand, sector and type of supervision explain a much smaller share of the explained variance (about 13% for per-class budget and 8% for per-student budget).
  • After controlling for various school characteristics, per-class and per-student budgets are highest in the State-religious education system and lowest in the Arab education system; there is a 10% gap between the two. Part of the gap can be explained by unique budgetary baskets, but the remainder of the gap cannot be explained because the considerations behind budgeting are not transparent.
  • The State-religious education’s budgetary advantage stems from the fact that it receives unique budgetary baskets, such as funding supplements for prayer time, separate frameworks for boys and girls, and hours with a Rabbi. These supplements are intended to preserve the character of this education system, yet, on the other hand, it could be argued that similar funding should be granted in order to preserve the unique character of the State education system. It is also worth noting that differences in type of supervision by religiosity level is a phenomenon unique to Jewish education.