Assessment of public education expenditure efficiency across Lithuanian municipalities

Legenzova Renata (), Gaigalienė Asta (), Rudytė Dalia (), Skunčikienė Solveiga () and Kazlauskienė Vilma ()
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Legenzova Renata: Vytautas Magnus University, Lithuania
Gaigalienė Asta: Vytautas Magnus University, Lithuania
Rudytė Dalia: St. Ignatius of Loyola University of Applied Sciences
Skunčikienė Solveiga: Vilnius University Šiauliai Academy, Lithuania
Kazlauskienė Vilma: Vytautas Magnus University, Lithuania

Financial Internet Quarterly (formerly e-Finanse), 2023, vol. 19, issue 4, 63-79

Abstract: Efficiency of education expenditure is the ability to maximize the educational achievement given the resources invested. Although public education expenditure tends to increase, yet this does not necessarily guarantee high quality of education services. This study aims to assess public education expenditure efficiency of Lithuanian municipalities and to identify the factors explaining its variations. The study used data for 2013-2019 from 60 Lithuanian municipalities. Corrected Ordinary Least Squares method was employed for public education expenditure efficiency assessment and regression analysis was used to determine its influencing factors. Inputs included financial (public expenditure for education and maintenance) and nonfinancial (composition of teachers, occupied area, etc.) variables. Passing ratio of Lithuanian (national) language and math exams were used as efficiency outputs. The context variables represented environmental factors of educational achievements, such as number of business entities, users of social housing, libraries, and culture centres as well as municipalities’ overall financial autonomy. Results of the research are ambiguous. When assessed by the overall passing of the exams, the efficiency was high, scoring 86-90%. But when evaluated by passing exams with the highest scores, it did not even reach 40%. Two types of public expenditure were identified as the most influential factors - public expenditure for education with the negative trend, and municipality own financing with the positive influence on the public education expenditure efficiency. Such results support the decentralization of public education expenditure management and call for alternative output measures in the Lithuanian public education system.

Keywords: Public Expenditure Efficiency; Expenditure on Education; Municipal Finances (search for similar items in EconPapers)
JEL-codes: D61 H75 I22 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:finiqu:v:19:y:2023:i:4:p:63-79:n:6

DOI: 10.2478/fiqf-2023-0027

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