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  • The Economics of Education

    The United States and most other countries devote a huge share of their resources to education. In 2008–09, the U.S. spent considerably more than one trillion dollars in institutional expenditures on education from kindergarten through higher education. What is notable is that this figure does not include preschool or spending on education and training by businesses or the military. Nor does it include private tutoring or the types of specialized lessons provided to children and adults by public and private entities such as the YMCA, Boys and Girls Clubs, and after-school academies. Even so, the official spending statistics accounted for almost eight percent of Gross Domestic Product, a percentage that would surely rise to over ten percent if all educational spending were included, more than one of every ten dollars of national income. This amount considerably exceeds the spending on the military and is second only to the health care sector. Moreover, this spending has doubled in real terms (adjusted for price level inflation) between 1986–87 and 2008–09.