I. Introduction

Development outcome, in the final analysis, is likely to be a result of human reasoning and action. It is no wonder, therefore, one of the frequently mentioned development bottlenecks is lack of skilled manpower. This is indeed true as variations in growth performances of different countries are likely to be mainly explained in terms of variations in human capital, more than anything else. Hence, a carefully designed development strategy will, no doubt, incorporate ways of improving the performance of the education sector as a key instrument of reaching desired goals and objectives.

Economic, social and political arguments drive the agenda of education in the discussion of policy formulation and design of programs. The economics rationale, which is discussed in the next sub-section, focuses on instrumental value of education in bringing sustained economic growth. Here the outcomes are reflected in terms of increased productivity and efficiency of resources use. From social point of view, education is an end by itself as it bestows the holder multi-dimensional knowledge and, therefore, respect and acceptance. The social outcomes are reflected in increased social interaction and cohesion. Political motives attempt to exploit education for a number of reasons including inculcation of basic human rights and democratic values, propagation of a particular ideology, discrimination of a particular group of society and promotion of self interests of a given culture and its dominance. Political outcomes could be reflected both in positive and negative terms. While the upholding of rule of law, unity and good citizenship are likely positive outcomes, dominance by few, inequity, inefficiencies and suppressed free thinking are possible negative outcomes. Note also that some of the benefits of education, such as increased capacity for structured thinking and logical reasoning are not restricted to a specific category but rather provide economic, social and political benefits at the same time.

While it is difficult to disagree on economic and social benefits of education, political motives usually stand in the way, which might lead to the design of inappropriate and ineffective policies and programs. This is likely so because policies and strategies are usually exclusively designed by a government in power, which commonly is driven by political agenda. The different governments that have come to power in Ethiopia have, for example, pursued different policies and strategies with respect to the development of the education sector. Policy framework differences would lead to differences in resource allocation commitment and the performance of the sector, which would be reflected on the quality of education.

There linkage between increased level of education and higher economic growth is clearly established in theoretical and empirical literature. The strength of the linkage is dependent, however, on the quality of education. Quality, in turn, is affected by level and efficiency of resource use, which brings us to the issue of education sector financing. Hence, this study has focused on investigating the quality and financing issues of the education sector in Ethiopia.

I.1 The Economics of Education [1]

The interests of economics on education lie in three interrelated areas. The role education plays in bringing about growth and equity is a major concern of economics. Economics is also interested in the analysis of the costs and benefits associated with possible alternative education programs available to policy makers of a country. Similarly, economics is also concerned about the efficiency of the education system. These concerns are discussed below.

Recognition of the role of education in development dates back to the days of Plato, who commented on education's role as producing "reasonable men". The reference can also apply to economists such as Adam Smith, the classicals and the neo-classicals including Alfred Marshal who emphasized, "the most valuable of all capital is that invested in human beings".

The economics of education (as a separate subject of its own) was born, however, in the 1960's with pioneering works of economists such as Schultz (1961) and Denison (1962). Since those days education has become an area of interest to economics with particular focus on growth accounting and human development theories. One can say this increasing interest in studying the role of education in development mainly comes from the interesting features embodied in “education” and specifically from the fact that it relates to human behavior and action.

Education and development: The multifaceted benefits of education are the rationale for economic agents such as individuals/households, firms or governments for making investment in education. There are internal (referred to as private) and external (referred to as social) returns to investment in education. The internal values of education refer to benefits that accrue to the holder alone. The external value refers to benefits that go beyond the holder to the neighboring and distant beneficiaries. The external values also include benefits, which the economic agent enjoys but has not initially anticipated. Another feature of education is that it serves both consumption and investment purposes.

The human capital theory argues that the increasing returns associated with additional years of schooling that an individual has are results of the changes in productivity of the individual due to his/her increased education that impacts general and specific skills which raise the efficiency of the individual. The argument forwarded by the screening theory is different in the sense that it ascribes increasing returns to additional years of schooling to increased ability of employers to screen out those individuals with better innate abilities. For example, a college certificate indicates the capacity of the holder to sustain hard work of years of study under stressful conditions. Employers are considered rational in judging individuals by the level of education they managed to achieve in view of such less obvious but critical attributes of their potential employees.

As an instrument of development, education is generally believed to enhance income-earning opportunities, self-esteem, and facilitates the development of democracy. In particular, education facilitates social cohesion, tolerance and popular participation, as it augments a multidimensional view and out look. The history of development, in fact, shows that development occurs as the knowledge base of society improves and many studies have confirmed a high correlation between educational status and development level. The value of education in a world of knowledge driven economy and new technologies that are behind major economic transformations cannot be underestimated. Investment in human capital is identified as a key source of growth and poverty reduction.

The role education plays in providing individuals with social, economic and other opportunities can hardly be denied. Moreover, the public nature (non-excludability) is so strong that the benefits of an individual’s education can be shared by the public. A study conducted on farming communities in rural Ethiopia has shown that educated farmers are usually early adopters and copiers of new technologies that promote farm output[2]. The effect of education was primarily observed in pushing the production frontier further outwards through the adoption and diffusion of innovations. Mulat, et.al (1998) also used fertilizer marketing survey data to show that literate farmers are more likely to adopt use of fertilizer than the illiterate ones. In addition, a number of other studies have shown the existence of a positive correlation between the literacy status of farmers and the probability of their involvement in off-farm activities, which serve to supplement their farm income.

Education also promotes gender equality and affects fertility behavior in a number of ways. It imparts literacy skills, enables people to process a wide range of information and stimulates cognitive changes that shape an individual’s interaction with the surrounding world. It empowers women to view their traditional roles critically and assume new ones. Education can lead to crucial transformations in aspirations and eventually to questioning traditional beliefs and authority structures. Education as a “vehicle” of socioeconomic advancement opens up, therefore, economic opportunities and social mobility.

Cost and benefit analysis: Another aspect of the economics of education refers to the analysis of the costs and benefits of alternate education programs available to policy makers. To undertake this analysis a baseline survey of the situation on the ground is necessary. In this survey, the role of education should clearly be laid out; i.e., as a means of achieving development goals of a country and as a consumption good, a right individuals should enjoy by virtue of being citizens. Ethiopia should clearly define what it expects to gain from expansion of education. Problems have to be listed out in an exhaustive manner by way of a thorough situation analysis not only with the objective of identifying the prevailing problems but also with the ultimate aim of identifying the causes and providing remedial actions. Possible consequences of the planned remedial actions should also be presented through scenario analysis.

For example, a low enrollment level in a country cannot by itself be a sufficient reason to adopt a policy of campaign for raising enrollment. The expansion of the education system regardless of quality and relevance and the capacity of the economy to absorb it would at best result in the creation of a pool of unemployed citizens, which in turn creates a number of social, economic and political pressures in the country. In the same manner, identification of shortage of funds for education might not be a sufficient ground by itself for introducing compulsory fees.

Efficiency of the system: The third aspect relates to the efficiency of the system that produces education as an output. This refers to the ability of the education system to produce graduates at each level with the maximum possible achievement and/or the minimum level of cost. The ideal system produces output without any wastage. Indicators of achievement in an education system include both quantity and quality parameters. The specification of efficiency in terms of quantity depends on the predetermined goals of the system. If the system has set a goal of producing as many graduates at every or some selected levels of schooling as possible either for equity or growth concerns, then it could be measured by the enrollment ratios prevailing at every level of schooling. On the other hand, if the goal is to supply the job market with the required work force, then the level of skilled unemployment in the economy measures the efficiency of the system. In the face of a meager resource base, this calls for a well thought out policy stance by the government, regarding how much weight the country should give to a goal of universal education versus a goal of responding to the absorptive capacity of the economy as evidenced by job market signals.

When it comes to issues of quality, there are a number of indicators, which constitute both input and output indicators. The input side indicators show how much the system succeeds in providing the required inputs that would ensure the right quality of output. The indicators include the average number of students in a classroom, the average number of students assigned per teacher and the average number of text and reference books available to a student and other facilities available to make the learning-teaching process fruitful. In addition, the relevance and capacity of the curricula to respond to the reality outside the classroom, which students will have to face after graduating, are also included.

On the output side, there are internal and external measurements of efficiency. The internal efficiency indicators include the repetition and drop out rates, which increase the costs to the system depending on their magnitude. On the other hand, the external measurements are achievement scores in nationally or internationally set standard exams and ability to compete and solve problems in the job market. Whether a system meets these requirements or not indicates its quality and level of efficiency.

I.2. Background and Objectives

According to the CSA 2000 DHS, 62 percent of males and 77 percent of females in Ethiopia have no education. 27% of males and 17% of females have only some primary education. Among women and men aged 15-49, only 10.7% and 20.5 percent respectively have completed primary education. Among girls and boys aged 6-12 at the time, only 23.5% and 28.0%, respectively, were attending school. Only 3% of males and 1 % females have completed secondary school or higher. It is not surprising, therefore, that the country remains underdeveloped given the fact that the majority of its citizens have little or no education, with females much less educated than males.

Although GER rate and the absolute size of enrolment at primary level grew significantly in the past few years, there are serious issues raised concerning quality of education and inequality of performance among the different regions in the country. Whereas the relatively well developed regions have managed to more than double their primary enrollment rates, the rate has actually declined in Somali and Afar regions during the same period. Moreover, the growth in enrollment at primary level was not matched by the growth in secondary level enrollment indicating high drop out at the primary level, which could partly be due to lack of access to secondary level education.

At tertiary level, there has been a modest expansion in students’ intake capacity of public higher education institutions during the past decade. This mainly has come about due to the opening of new regional universities, namely, Debub, Jimma, Bahir Dar and Makalle. The number of students enrolled in degree programs has increased for example from 8,971 in 1992/93 to 21,014 in 1999/2000. Similarly, the number of diploma students enrolled in higher education institutions increased from 6,185 to 7,838 during the same period. But enrollment has always been low considering the size of the population in general and the number of secondary school graduates in particular. There are also numerous indications that the quality of education has been deteriorating in recent years. For example while enrollment grew on average by 12% the number of teachers and schools grew only by 3.8% and 3.2%, respectively. The size of teachers at secondary level has significantly declined. Primary dropout rate has doubled in recent years and coefficient of efficiency has significantly declined from 60% in 1996 to 43% in 2001.

Some of the equity issues include the high disparity in educational performance among regions and unsteady trend in proportion of female students, which showed a declining trend at secondary level and only marginal increase at primary enrollment which, in fact, has declined from 16% to 13% in the two most underserved regions. There is also a high disparity in enrollment levels between urban and rural areas. Proportions of qualified teachers are only 26% at second cycle primary and 34% at secondary level. Highly vulnerable areas are prone to significant decline in enrollment rate when disasters such as famine occur.

Poor quality education is a common feature of the education system of the developing countries. Note, however, that there is no unanimity in the conceptualization of quality. International standard tests such as the Educational Testing Service have proved in a number of cases that top students from developing countries have only equal grade to the average student in the developed ones. A recent World Bank study has concluded, “the quality of education is poor at all levels in low- and middle-income countries. Students in developing countries have a mean level of achievement below that in industrial countries, and their performance shows a much greater variation around the mean”. Surveys have also showed that very small proportions of primary school students in most Sub Saharan African countries succeed in reading a simple text with full understanding. The studies above have generally shown that the deterioration in the quality of education in most developing countries is so high that it takes an increase (excluding salary) of the current budget up to 300 times to rectify the situation.

The Ethiopian situation is no better, if not worse, than most developing countries. In fact a number of experts from different disciplines who have looked closely at the Ethiopian education system agree that the system has been in a crisis in the past four or five decades. This study portrays the crisis in today’s Ethiopia using a number of evidences.

The current Government in Ethiopia has issued an education policy that includes the decentralisation of the management of education, curriculum reform and change in the educational structure. In this policy, the government has declared its commitment to primary education. Accordingly, the Education Sector Development Program (ESDP) states that the share of the budget spent on primary education would increase from 56 to 66 per cent over the five-year period (1997/98-2001/02). On the other hand, the share of the budget spent on higher education drops from 15 to 8 percent during the same period. Cost-sharing is stipulated to make an important contribution to funding education for grades 11 and above.

This drastic fall in higher education support has raised public concerns that it will limit the country’s capacity to build the minimum critical mass of highly trained manpower that is needed to kick start and sustain a robust national economy. It may also widen the “knowledge gap” between the rich and the poor and this is more serious than the “wealth gap” that already exists. This study attempts, therefore, to elaborate these public concerns. It presents also the pros and cons of different mechanisms for financing higher education.

While evidences provided above clearly show the existence of educational quality problems, there is still a need for an in-depth assessment of the gravity of the problem. The study will therefore investigate quality issues in some depth and evaluate the scale of the problem with respect to resource misutilization and implications for the future. Hence, availability and conditions of educational facilities, teachers’ quality, relevance of curricula, school management and administration, etc. are treated in some depth.

Another aspect of the study is related to the issues of education financing. As a part of its new Education and Training Policy, the government has made plans for cost sharing by introducing partial fees at the secondary and tertiary levels of education. The public has raised a number of concerns on the policy regarding its appropriateness, timing and modality of implementation including presumptions regarding parents and students responses. This study analyzes, therefore, the objective conditions under which this new initiative is being launched. In this regard issues tackled include how much parents /guardians are paying currently and willing to pay more for education in terms of direct fees and/or forgone opportunities, and the type of benefits they anticipate from education. The value they attach to education is important given that it determines willingness to pay or incur various costs to acquire desired education. The study also investigates opinions of teachers, students and parents on possible alternative mechanisms of financing education.

The results of the survey and the analyses contained in this report are expected to provide insights to policy makers, development partners and the public on the prevalence of quality problems of education and the objective realities surrounding education financing options in Ethiopia.

II. Study Approach and Profile of respondents

II.1. Study Approach

This study is based on desk review of secondary data and an in-depth assessment of primary data collected for the purpose of this report. Trend analysis was made on the secondary data, which is also used to derive cross-sectional indicators for comparing educational status across different areas in the country. The secondary data was obtained from reports published by government and non-governmental institutions.

The report is mainly based, however, on the primary data that was collected from selected educational institutions and communities in different parts of the country. Three types of questionnaires that targeted students, teachers and parents were designed and administered in urban areas of five regions (Addis Ababa, Oromiya, SNNPR, Amhara and Tigray) in the country. The questionnaires were administered in selected secondary and tertiary educational establishments and communities residing in surrounding areas. The survey has primarily targeted public educational institutions. However, for comparison purposes a few private secondary schools and colleges were included. A total of twenty-five secondary schools and twenty colleges/faculties were covered by the study.

EEA/ EEPRI Survey Coverage

	Private	Public	Total
Secondary schools	5	20	25
College & University faculties	2	18	20
Students	749	8010	8759
Teachers	38	405	443
Parents			694

Overall, the survey covered a sample of 8,759 students and 443 teachers drawn from selected public and private secondary schools and faculties/colleges in the country. Of the total students surveyed, 4,080 were from colleges and 4,567 from high schools and of the 443 teachers surveyed, 269 were from high schools and 158 from colleges. A separate questionnaire was also prepared and administered to parents residing in areas surrounding sampled schools and colleges and covered 694 respondents. The focus of the study was on assessment of public institutions and the private samples (10%) were included mainly for comparison purposes.

II.2. Gender Distribution

Table 1 Gender Distribution of Respondents

	Students								Teachers						Parents
	High School (HS)		College		No Reponse (N.R)		Total		High School		College		Total		Parents
	No.	%	No.	%	No.	%	No.	%	No.	%	No.	%	No.	%	No.	%
No response	67	1	84	2	3	3	154	2	3	1			3	0.7	5	0.7
Females	1993	44	971	24	60	54	3024	35	30	11	11	7	41	9.3	287	41.4
Males	2507	55	3025	74	49	44	5581	64	252	88	147	93	399	90.1	402	57.9
Total	4567	100	4080	100	112	100	8759	100	285	100	158	100	443	100.0	694	100.0

Female respondents constitute 44 per cent in high schools and 35 percent in colleges. Among teachers, both in colleges and high schools, males constitute about 90 per cent of the total respondents reflecting partly the failure of the system that existed so far. However, the fact that the proportion of female students in colleges was about 35% provides some hope for the possibility of raising the proportion of female instructors in colleges, which in turn contributes to the empowerment of women by providing role models.

II.3. Living Status of parents/ guardians

Table 2 Status of guardians

	Number	Percent
No response	252	2.9
Both parents are alive	6100	69.6
Both are not alive	423	4.8
Only one parent alive	1673	19.1
Divorced	311	3.6
Total	8759	100.0

The responses of students about the living status of their parents indicate that about one-fifth or 1,673 of them have lost at least one of their parents. Those who reported loss of a parent were further asked which parent was alive. The responses of those who have only a single parent show that about two-thirds of them live with female guardian/mother.

Table 3 Sex of parent who is alive

	Number	Percent
No response	113	6.7
Father/Male guardian	410	24.6
Mother/female guardian	1150	68.7
Total	1673	100.0

Considering the fact that female headed households are more exposed to poverty than male headed households, the above result is an indication of higher probability of exposure to poverty by large number of students.

II.4. Age distribution

The proportion of students falls with age after 15-19 while it increases in the case of teachers and parents for obvious reasons. In line with one’s expectation, the great majority of the students fall in age bracket 15-24 (91.6%).

Table 4 Age distribution of the respondents

Age group	Students		Parents		Teachers
Age group	Number	%	Number	%	Number	%
No response	273	3.1	13	1.9	5	1.1
Under 15	171	2.0
15-19	5299	60.5	1	.1
20-24	2727	31.1	12	1.7
25-29	227	2.6	59	8.5	76	17.2
30-34	38	.4	61	8.8	70	15.8
35-39	14	.2	109	15.7	90	20.3
40-44	5	.1	126	18.2	87	19.6
45 - 49	3	.0	113	16.3	47	10.6
50-54	2	.0	91	13.1	35	7.9
55-59			44	6.3	4	.9
60-64			32	4.6	1	.2
65 and above			33	4.8	1	.2
Total	8759	100.0	694	100.0	443	100.0

Quite a significant proportion of teachers are under the age of 30 indicating the low level of work experience they have. The current education system takes a student, on average, a total of 16 years to complete tertiary level of education. Adding to this the qualifying age of 7 years to join a primary school will imply that the average student graduates from a university at around 23 years of age. Normally a graduate stays for about a year or two before getting involved in teaching assignments. Hence, by that time, he/she will be around 25 years of age. Surprisingly enough, young age is more prevalent in the case of colleges than secondary schools. The retaining capacity of the system is also questionable since the number of young teachers is much more than the number of older and more experienced teachers.

This implies a college teacher aged 30, on average, has about four yeas of experience assuming he/she directly went into the system. Based on this assumption, the data shows that more than half of the teachers in colleges have less than ten years of work experience. The typical quality assurance system in higher institutions requires academic staff to hold a PhD degree. Considering the average years that this kind of study takes, the picture depicted by the sampled institutions is that the average age of a college teacher is much lower than it should ideally be.

Table 5 Teachers Age bracket vs. College Cross tabulation

	Type of Institution
Age bracket	COLLEGES	%	HS	%	NR	Total	%
	1	1%	4	1%		5	1%
20-24	10	6%	17	6%		27	6%
25-29	39	25%	35	13%	2	76	17%
30-34	35	22%	31	12%	4	70	16%
35-39	39	25%	50	19%	1	90	20%
40-44	18	11%	64	24%	5	87	20%
45-49	6	4%	40	15%	1	47	11%
50-54	6	4%	26	10%	3	35	8%
55-59	2	1%	2	1%		4	1%
60-64	1	1%				1	0%
65 and Above	1	1%				1	0%
	158	100%	269	100%	16	443	100%

The implication of this on the quality of education now and in the short to medium terms is worrisome. First, the low proportion of experienced teachers in the system indicates, among other things, the low retention capacity of the education system. There are a number of factors accounting for this poor retention capacity of the system. Higher institutions in Ethiopia are the major victims of brain drain. For example, studies have shown that a significant proportion of teachers going for postgraduate training to western countries do not come back after completing their studies.

Table 6 Year of experience reported by the responding teacher

	COLLEGES		HS		NR		Total
	Freq	%	Freq	%	Freq	%	Freq	%
1--5	71	49	48	20	0	0	119	30
6--10	29	20	26	11	3	21	58	15
11--15	22	15	33	14	3	21	58	15
16--20	17	12	51	21	1	7	69	17
21--25	4	3	38	16	3	21	43	11
26--30	2	1	32	13	2	14	35	9
Above 30	4	3	12	5	2	14	18	5
	146	100	240	100	14	100	400	100

Note from the table that in relative terms, teachers at high school have longer work experience than teachers in colleges, based on the sample for this study.

II.5. Religious category

Table 7 Religious Affiliation

Religion	Students		Teachers
	Number	%	Number	%
N.R.	160	1.8	7	1.6
Orthodox	5964	68.1	294	66.4
Protestant	1163	13.3	86	19.4
Catholic	157	1.8	4	0.9
Muslim	1078	12.3	33	7.4
Pagan	20	.2	1	0.2
Atheist	3	.0	7	1.6
Other	214		11	2.5
Total	8759	100.0	443	100

In terms of religious affiliation, the largest number of both students and teachers belong to Orthodox church followed by Protestants. The third category is represented by followers of Muslim religion.

II.6. Family size

Here we notice that the majority of the respondents in the student group have family sizes of 6-10 while that of the parents and the teachers groups have in the range of 1-5.

Table 8 Family Size

	Students’ response		Parents’ response
Size	Frequency	Percent	Frequency	Percent
1--5	2528	28.9	336	48
6--10	5170	59.0	283	41
11--15	529	6.0	19	3
16--20	50	0.6	1
21--25	6	0.1
missing	476	5.4	55	8
Total	8759	100.0	694	100
Mean		7

The average family size of the responding students was 7. This is higher than the national average (5.5). In the recent government national poverty profile report, a characteristic feature of poor households is that their average family size is about six. On the other hand, the responses from parents show that the great majority of them have family sizes of above five, again higher than the national average.

II.7. Marital status

With respect to marital status, in line with one's intuitive expectation, the great majority of the students are single whereas parents and teachers are mostly married. See the table below.

Table 9 Marital status

Marital Status	Students			Teachers
Marital Status	Frequency	%	Frequency	%
No response	214	2.4	5	1.1
Divorced	33	0.4	8	1.8
Married	185	2.1	278	62.8
Single	8299	94.7	148	33.4
Widowed	28	0.3	4	0.9
Total	8759	100	443	100

Table 10 Marital Status of Students by level of education

		level of education			Total	college	high school
			college	high school	Total	college	high school
Marital Status		3	48	163	214	1.2%	3.6%
	DIVORCED	1	13	19	33	0.3%	0.4%
	MARRIED	1	103	81	185	2.5%	1.8%
	SINGLE	107	3905	4287	8299	95.7%	93.9%
	WIDOWED		11	17	28	0.2%	0.4%
Total		112	4080	4567	8759	100.0%	100.0%

II.8. Education status

Before going directly to the education level of student and teachers, an effort was made to look at the highest level of education achieved by responding parents. The results indicate that the majority of the parents have at least completed secondary education followed by those who attained some primary education. On the other hand, the largest proportion of female guardians reported that they had only some level of primary education followed by those that reported some non-formal education. The majority of the male guardians reported that they had completed secondary education.

II.9. Employment, Occupation and Income

II.9.

Employment and educational status of parents has potential effects in determining the education status and achievement of their children. Of the total responding parents, nearly one in two female guardians/parents and one in six male guardians/parents were unemployed. On the other hand, responses of students to the question of the employment status of their parents/guardians shows that 41% of the female guardians, and 17% of the male guardians were unemployed at the time of the survey. Excluding no response, the proportion of unemployed parents is likely to be much higher.

Table 11 Employment Status of responding parents/guardians

Employment status	Male guardian/parent		Female guardian/parent
Employment status	Frequency	%	Frequency	%
NR	125	18.0	99	14.3
No	103	14.8	339	48.8
Yes	466	67.1	256	36.9
Total	694	100.0	694	100.0

Table 12 Employment status of guardians/parents of responding students

Employment Status	Female guardian/parent		male guardian/parent
Employment Status	Frequency	Percent	Frequency	Percent
No Response	1,923	22.0	1,711	19.5
Unemployed	3,578	40.8	1,497	17.1
Employed	3,258	37.2	5,551	63.4
Total	8,,759	100.0	8,759	100.0

Within public schools, proportionally higher number of students have mothers without jobs than those with jobs whereas in private schools, proportionally higher number of students have mothers with jobs than those without jobs.

The most frequent responses of male guardians on the type of their occupation are in the following order: Government employee, private business, and teacher//lecturer. The responses of employed female parents/ guardians showed a similar pattern.

Table 13 Major Occupation of Parents

Major Occupation of Parents	Father		Mother
	Frequency	%	Frequency	%
Teacher/ Lecturer	62	8.90%	36	9.90%
Medical personnel	23	3.30%	8	2.20%
Government employee	175	25.20%	103	28.30%
Private org employee	50	7.20%	11	3.00%
Politician	4	0.60%		0.00%
Private business	96	13.80%	90	24.70%
NGO/ International org	27	3.90%	10	2.70%
Daily laborer	28	4.00%	13	3.60%
House wife			42	11.50%
Petty trade/sale of local/drinks/tailoring/ collecting and selling fire wood			17	4.70%
Other	53	7.64	34	9.34
Total	694	100.00	364	100.00

Income

The level of earning of parents/guardians in most cases is less than Birr 500 per month. Further categorization between public and private and female-male guardians is also made. Accordingly, whereas it is only 1.8% of students in government education institutions that have parents earning above 5000 birr per month, the corresponding figure for private institutions is close to 12%.

About half of the students both in high schools and colleges have indicated that their male parents earn only between 0-500 birr per month. Thirty percent of college students and 25 percent of high school students have male parents earning between 501-1000 birr per month. Overall, only less than a quarter of the students have male parents earning above 1000 birr per month.

Table 14 Fathers’ earning distribution

	school grade
	N.R.	college		high school
0-500	112	1164	47.8%	1591	51.5%
501-1000	69	722	29.7%	779	25.2%
1001-1500	25	242	9.9%	277	9.0%
1501-2000	8	110	4.5%	98	3.2%
2001-2500	6	39	1.6%	60	1.9%
2501-3000	5	34	1.4%	55	1.8%
3001-3500	1	24	1.0%	32	1.0%
3501-4000	1	17	0.7%	20	0.6%
4001-4500	1	9	0.4%	26	0.8%
4501-5000		17	0.7%	25	0.8%
5001& above	3	57	2.3%	126	4.1%
	341	2435	100.0%	3089	100.0%

Table 15 Mothers’ earning distribution

	school level
	N.R.	college		high school
0-500	108	1270	66.9%	1363	64.1%
501-1000	42	401	21.1%	459	21.6%
1001-1500	12	105	5.5%	120	5.6%
1501-2000	4	35	1.8%	43	2.0%
2001-2500	1	19	1.0%	21	1.0%
2501-3000	2	18	0.9%	24	1.1%
3001-3500		10	0.5%	12	0.6%
3501-4000		3	0.2%	5	0.2%
4001-4500	2	4	0.2%	8	0.4%
4501-5000		2	0.1%	16	0.8%
5001& above	3	31	1.6%	56	2.6%
	341	1898	100.0%	2127	100.0%

With respect to employed female parents, about two-third earn less than 500 birr per month and only about one-fifth earn between 501-1000. Only about 13 percent of mothers who are employed have monthly earnings about 1000 birr per month.

III. The Status of Quality of Education

The quality of education could be measured both from the input and output aspects. From the input side, the availability, capacity, and condition of educational facilities and their level of utilization in the teaching learning process is important whereas indicators of external efficiency and graduates flow at different levels of schooling are major output indicators. In the following section, the general situation of educational facilities and teaching aids is discussed.

III.1. Availability, Conditions and Utilization of Facilities

Availability and Use of Facilities

About twenty facilities that are needed in the ideal school/college are identified and considered in the study. Except the case of accommodation, which most schools by their type of program may not have, all the facilities discussed are normally expected to be available. The top ten frequently available facilities quoted by teachers and students are classrooms, a library, water supply, latrines, cafeteria, a science laboratory, a workshop, latest books, audiovisual materials, and accommodation in that order.

*Table 16 Students' Opinions on Use of Facilities*
	Level of use
	Overcrowded	too few students	about right
Accommodation	63.2%	13.1%	23.7%	100.0%
Cafeteria	60.0%	15.1%	24.9%	100.0%
Water supply	59.4%	11.1%	29.6%	100.0%
Latrines	57.3%	14.6%	28.1%	100.0%
Medical facilities	37.5%	38.7%	23.8%	100.0%
Library/ books	62.5%	16.6%	20.9%	100.0%
Classroom	56.4%	9.4%	34.2%	100.0%
Video, films & slides	34.0%	41.9%	24.1%	100.0%
Computer lab	46.6%	35.1%	18.4%	100.0%
Workshop	33.3%	38.6%	28.1%	100.0%
Science lab	36.9%	33.6%	29.5%	100.0%
Pedagogical centre	24.9%	45.8%	29.2%	100.0%
Sports facilities	28.2%	41.1%	30.7%	100.0%
Parks and recreation	23.2%	45.3%	31.5%	100.0%
Others	50.0%	22.7%	27.3%	100.0%
All	49.6%	23.4%	27.0%	100.0%

The respondents were further asked about the level of use of the existing facilities (see Table 16). About half the students indicated that educational facilities are overcrowded. Only 27 percent of students think facilities are used by about the right size of students. The most highly overcrowded facilities, according to students, are accommodation, library, books, water supply, latrines and classrooms.

In the case of teachers, almost all of the respondents asserted that key educational facilities are overcrowded. On average, 67 per cent of the responding teachers said that facilities in general are overcrowded and only 27 percent said that they are about right. The facilities most crowded according to teachers include accommodation, cafeteria, library, latrines, medical center, classrooms, audiovisual center, science laboratory and sports facilities.

Table 17 Highest Number of Students per class/lecture

Level of Education

High school

College

Private

- students

- teachers

Public

- students

- teachers

All

- students

- teachers

Both students and teachers in private institutions indicated relatively less crowded classes in high school and colleges than public institutions. In both private and public, teachers reported class size, which is much higher than reported by students. Overall, class sizes reported by students and teachers in both private and public institutions are above those recommended as standard (see Table 17).

Table 18 Teachers' Opinion about Class Size

	High school		College		All
N.R.	20	7.0%	23	14.6%	43	9.7%
Overcrowded	236	82.8%	73	46.2%	309	69.8%
Too few stud	2	0.7%	2	1.3%	4	0.9%
About right	27	9.5%	60	38.0%	87	19.6%
	285	100.0%	158	100.0%	443	100.0%

A significant proportion of teachers, both in high school and colleges, think classes are overcrowded. Only about one-fifth of teachers said that classes are about right. According to teachers, classes are more overcrowded in high schools than colleges (see Table 18).

Table 19 Opinions on Class Size between Private and Public

	Private		Public		All
N.R.	4	10.5%	39	9.6%	43	9.7%
Overcrowded	17	44.7%	292	72.1%	309	69.8%
Too few stud		0.0%	4	1.0%	4	0.9%
About right	17	44.7%	70	17.3%	87	19.6%
	38	100.0%	405	100.0%	443	100.0%

Teachers’ opinion in private institutions about class size is divided equally between those who say it is overcrowded and those that say it is about right. In contrast, the majority of them in public institutions think classes are overcrowded. While 44.7% of the teachers in private institutions think that classes are overcrowded, about 72% of their counterparts in public institutions share similar opinion (see Table 19).

Only a very small number of college students have access to the computer. Workshops in most vocational and technical schools in the country are in poor conditions. It is with this background that the agenda of aggressively introducing vocational schooling was introduced. While there is no doubt that the promotion of technical and vocational schools is a necessity, the priority should be to strengthen existing ones before embarking on large scale expansion.

Shortage of facilities and lack of teachers have forced schools to provide education on shift basis. Among the surveyed students in secondary schools, two-thirds follow their education under a shift system (see Table 20).

Table 20 Students Learning under Shift Systems

	shift system			Total	*Use in %*
		no	yes	Total	*Use in %*
	14	239	88	341	25.8%
college	299	3447	109	3855	2.8%
High school	182	1379	3002	4563	65.8%
	495	5065	3199	8759	36.5%

Table 21 illustrates the number of shifts per day that schools are implementing. Most schools have two shifts in a day, but some operate under a three-shift system.

Table 21 Number of Shift Systems

*Number of Shifts*
	Frequency	Percent
No shift sys	5664	64.7
1	8	0.1
2	2705	30.9
3	382	4.4
Total	8759	100

Conditions of facilities

Seventy-two percent of students in high schools indicated that educational facilities are either in fair, poor or very poor conditions (see Table 22). On the other hand, overall facilities in colleges are rated by teachers and students as poor or very poor by 52% and 42% respectively. Teachers rated as poor or very poor accommodations, library/books, latrines, medical center, workshops, sports, parks and recreation facilities.

Table 22 Condition of facilities

	Condition
	Excellent	Very good	Medium	Low	Very low
Accommodation	10.6%	19.4%	30.7%	19.0%	20.4%	100.0%
Cafeteria	7.5%	15.5%	33.7%	20.4%	23.0%	100.0%
Water supply	15.3%	23.1%	24.9%	18.0%	18.6%	100.0%
Latrines	7.5%	15.9%	24.9%	20.7%	31.0%	100.0%
Medical facilities	5.5%	13.5%	28.9%	23.2%	29.0%	100.0%
Library/ books	12.6%	23.6%	29.5%	17.0%	17.3%	100.0%
Classroom	19.5%	26.9%	28.7%	12.6%	12.3%	100.0%
Video, films & slides	5.3%	10.2%	20.4%	20.7%	43.4%	100.0%
Computer lab	6.9%	11.7%	17.1%	19.7%	44.7%	100.0%
Workshop	8.8%	16.6%	22.1%	17.2%	35.3%	100.0%
Science lab	9.3%	17.5%	25.2%	18.7%	29.4%	100.0%
Pedagogical centre	5.7%	12.4%	20.9%	20.9%	40.2%	100.0%
Sports facilities	7.1%	15.8%	28.0%	19.8%	29.3%	100.0%
Parks and recreation	8.5%	11.9%	16.7%	15.6%	47.3%	100.0%
Others	12.0%	4.0%	16.0%	20.0%	48.0%	100.0%
All	10.2%	18.0%	26.2%	18.6%	27.0%	100.0%

Facilities that are generally indicated to be in poor or very poor conditions include accommodation, cafeteria, latrines, medical center, library/books, audiovisuals, computer labs, workshops, science labs, pedagogy center, sports, parks and recreation.

Generally, students think that the conditions of facilities at their schools is below average. This is particularly true with regard to audiovisuals, computer laboratories, workshops, libraries and pedagogical facilities. An educational institution without well functioning support facilities is evidence of its deprivation of practical orientation. It is only when students have chances of practicing in demonstration sessions in laboratories that they can be effective in delivering the required output.

Use of outside library

Overall, one third of students reported that they use libraries located outside their institutions (see Table 23). This is an indication of inadequacy of library service in their respective institutions.

Table 23 Use of Outside Library

*Use of Outside Library*
	Frequency	Percent
n.r.	177	2
No	5665	64.7
Yes	2917	33.3
Total	8759	100

The problems discussed above arise mainly because of inadequate budget owing partly to the low level of attention given to the role of such facilities in determining the quality of education provided and partly due to scarcity of resources.

Satisfaction with educational facilities

About 70% of college students and 73% of high school students say they are not satisfied with the currently available educational facilities (see Table 24). Regarding the most unsatisfactory facilities, the students mentioned overcrowded rooms, shortage of seats both in the libraries and class rooms, outdated and very small number of books, limited or no opportunity to see a physician. Other problems include poor maintenance of facilities, prevalence of food borne diseases, lack of detergents and a serious budget constraint. Of those students learning under a shift system, 78% indicated that they are not satisfied with the shifting system.

Table 24 Satisfaction with educational facilities

	NR	No	Yes	Total
College	5.6	70.4	24.0	100
High school	4.2	73.0	22.8	100

In general, the required facilities are not always sufficiently available and even those that are available are over used. In addition the facilities are not properly maintained and some of them have become obsolete. These drawbacks affect the quality of education significantly.

As the table below illustrates, students are most unsatisfied with available books which are outdated and inadequate. Overcrowded classrooms, poor meal service and poor maintenance of facilities belong to next frequently mentioned unsatisfactory facilities by students.

Table 25 Proportion of students indicating most unsatisfactory facility

Budget constraint	4.9%
Overcrowded room & shortage of seat (library, class)	13.1%
Meal	13.0%
Poor maintenance/ mal functioning	12.5%
Poor medical facilities	6.2%
Outdated books/ not enough books	20.5%
Inadequate facilities (number)	6.2%
retiring age teachers	1.5%
No chance to see a doctor	7.5%
Mismanagement/ admin problem	1.6%
No detergent/ conditioner	3.9%
Shortage/ outdated computers	0.3%
Food borne disease	2.3%
Overload of courses	1.1%
Poor attention to education by gov't	1.8%
No sport facility	0.1%
Lack of equipment for field practice	0.6%
Expensive cafeteria service	2.2%
Other	1.0%

III.2. Teachers’ qualification

It is common both in high schools and colleges to find that a semester has elapsed without students getting a course that they are supposed to for simple reason that a teacher was not assigned. The usual method to resolve such problems in high schools is to wait and see until the end of the semester. In most cases, this brings in the possibility of a teacher appearing during the last month of the semester who tries to cover course materials in the shortest time possible. This definitely leads to students becoming highly overloaded. Other commonly used mechanisms include the assignment of teachers who are not qualified to teach the particular subject or overloading qualified teachers with additional classes. In the case of college students, they could be forced to drop courses and add them up at later years which some times pose a serious problem on when some courses are prerequisite to other courses. In some cases, students will never take some courses and will only be told that they need to take other courses just to fill the number of credit hours that a student has to take irrespective of the course type. All these are very serious threats to education quality in these institutions.

Table 26 Qualified to Teach based on self-assessment

	Private		Public
N.R.	8	21.1%	73	18.0%	81	18.3%
All subjects	18	47.4%	137	33.8%	155	35.0%
Some subjects	10	26.3%	180	44.4%	190	42.9%
None	2	5.3%	15	3.7%	17	3.8%
	38	100.0%	405	100.0%	443	100.0%

In the survey undertaken for this report, 44.4% of the teachers in public schools and 26.3% of those in private institutions reported that they are not qualified to teach some of the subjects they are assigned for (see Table 26). Only about one-third of teachers in public institutions think that they are qualified to teach all the subjects they are teaching. Although the proportion that say the same in private schools is higher, still more than half them think they are not qualified.

As the table below demonstrates, the problem is more pronounced in high schools than colleges. Only 23% of teachers in high school believe that they are qualified to teach in contrast to 56% in colleges. There could possibly be an understatement of the problem given the fact that this is a self-assessment on the part of the teachers themselves.

Table 27 Qualified to Teach based on self-assessment

	High school		College		All
N.R.	72	25.3%	9	5.7%	81	18.3%
All subjects	67	23.5%	88	55.7%	155	35.0%
Some subjects	136	47.7%	54	34.2%	190	42.9%
None	10	3.5%	7	4.4%	17	3.8%
	285	100.0%	158	100.0%	443	100.0%

Students were also asked to give their opinions regarding the ability of their teachers. 67% and 56% of the responding students in high schools and colleges, respectively rated the ability of their teachers as fair, poor, or very poor.

Table 28 Students' Rating of Teachers' Ability

	level of education					Total
		college		high school		Total
n.r.	5	299	7.3%	115	2.5%	419
very low	4	122	3.0%	324	7.1%	450
Low	8	390	9.6%	621	13.6%	1019
Medium	57	1780	43.6%	2127	46.6%	3964
High	29	1131	27.7%	922	20.2%	2082
Very high	9	358	8.8%	458	10.0%	825
	112	4080	1	4567	1	8759

Regarding in-service training for teachers, the results are summarized in the table below.

Table 29 Teachers receiving in-service Training

	*High school*		*College*		Total
*n.r*	17	6.0%	7	4.4%	24	5.4%
no	181	63.5%	116	73.4%	297	67.0%
*yes*	87	30.5%	35	22.2%	122	27.5%
	285	100.0%	158	100.0%	443	100.0%

The summary of responses indicates that only about 27 percent of teachers have ever received some type of in-service training. In colleges, in fact, 73% have never received in-service training. Similarly, 64% of the teachers in high schools have never had such type of opportunity. Lack of in-service training plus the already low level of qualification of teachers aggravates problems to improve the quality of education.

III.3. Perception on Quality of Education

The best indicator concerning the quality of education delivered at academic institutions from the output side would be job market signals and opinions of employers on the performance of their graduate employees. However, in this survey, an attempt was made to capture this indirectly by gathering opinions of students and teachers on how they perceive the quality of education delivered. Output related measurement and indicators used include students’ level of competence to meet the demand in the world of work as they graduate by referring to their capacity to get employed, ability to create self-employment and level of independent thinking and assertiveness students experience.

Accordingly, among college students more than 30% are not sure or do not believe that the education they receive prepares them for any kind of employment. The figure for high schools is about 65% (see Table 30).

Table 30 Students' opinion on whether education prepares them for employment

	level of education					Total
		college		high school		Total
n.r	7	347	8.5%	171	3.7%	525
no	18	246	6.0%	1119	24.5%	1383
not sure	51	1009	24.7%	1872	41.0%	2932
yes	36	2478	60.7%	1405	30.8%	3919
	112	4080	100.0%	4567	100.0%	8759

On the issue of whether the education they receive encourages them to exercise independent thinking, more than one third of students in high schools do not think that it enables them to think independently and about a similar proportion in colleges either think the same or are not sure (see Table 31). Strictly speaking, any kind of education that does not lead to increase capacity for independent thinking is likely to be a waste of resources.

Table 31 Education encourages independent thinking

	level of education					Total
		college		high school		Total
	10	363	8.9%	210	4.6%	583
no	23	692	17.0%	1721	37.7%	2436
not sure	35	787	19.3%	952	20.8%	1774
yes	44	2238	54.9%	1684	36.9%	3966
	112	4080	100.0%	4567	100.0%	8759

III.4. Repetition

Another quality indicator in an educational system is repetition rate. The survey disclosed that the repetition rates among private and public students are 8% and 6.9% respectively (see Table 32). These figures are likely to be underestimates given that there could be other repeaters who had not been covered in the sample and that there could be other repeaters who have exhausted their chance of staying in the same institution because of repeating twice.

Table 32 Students Repeating this grade/ year

	Private		Public		All
n.r.	53	7.1%	465	5.8%	518	5.9%
no	636	84.9%	6996	87.3%	7632	87.1%
yes	60	8.0%	549	6.9%	609	7.0%
Total	749	100.0%	8010	100.0%	8759	100.0%

Another potential indicator of the quality of education is drop out rate, which could not be treated in this report because of the nature of the survey which did not capture this information.

Table 33 Number of Shift sys

	Private		Public		All
none	715	95.2%	4957	61.8%	5672	64.8%
2	36	4.8%	2678	33.4%	2705	30.9%
3			381	4.8%	382	4.4%
	751	100.0%	8016	100.0%	8759	100.0%

On the other hand, information on the number of shifts was also collected. In about 35% of the institutions (both private and public), there are two or three shifts.

III.5. Teachers’ Motivation

Table 34 Teachers engaged in additional income earning opportunity

	N.R	No		Yes		Total
		Freq	%	Freq	%
High School	3	144	50.5	138	48.4	285
College	5	57	36.1	96	60.8	158
Total	8	201	45.4	234	52.8	443

Another interesting issue here is the surviving strategy of those in the system and the implication of these coping strategies on the quality of education delivered in this institutions. Teachers mostly take additional load of courses by teaching evening classes of the same institutions and other private institutions. In addition, college teachers in particular are involved in consultancy activities as this survey has demonstrated. These could have repercussions on the performance of teachers especially in closely following-up their students.

Table 35 Teachers engaged in additional income earning opportunity-Private-Public

	Private		Public		Total
	Freq	%	Freq	%	Freq	%
NR	1	2.65	7	1.7	8	1.8
No	24	63.2	177	43.7	201	45.4
Yes	13	34.2	221	54.6	234	52.8
Total	33	100.0	405	100.0	443	100.0

As Table 35 illustrates, more than one-third and half the teachers in private and public institutions respectively are engaged in additional income earning activities. This indicates that increasing salary for public school teachers is necessary in order to reduce the incentive to seek other opportunities and make them concentrate on the job they have at hand.

III.6. Problems faced by Institutions

The discussion on the availability and use of facilities showed that the current situation at both high schools and colleges is in a state of critical condition. For further investigations teachers were asked to state the problems they face in the teaching-learning process.

Table 36 Teachers’ opinions on Major problems faced by educational institutions

Colleges		High schools
Types of problems	% out of total responses	Types of problems	% out of total responses
Poor teaching aids	21.5	Overcrowded classes	20.1
Shortage of budget	21.5	Poor teaching aids	18.2
Declining size/shortage of qualified staff	12.2	Assignment of inexperienced directors	14.1
Assignment of inexperienced deans/presidents	9.2	Lack of qualified teachers	12.1
Overcrowded class	7.7	Misbehavior of students	10.1
Lack of academic freedom	4.6	Shortage of budget	6.7
Shortage of qualified teachers	4.5	Distance of school	6.1
Shortage of text books	3.1	Low salary level	5.1
Low salary level	3	Difficulty implementing new policy	3
Other comments /don’t know, misbehavior of students/ curriculum/policy	12.7	Other comments /don’t know, shortage of text books/ scarcity of water/	4.5

As illustrated in the above table, the most serious problems the teachers face include poor teaching aids, shortage of funds, and declining size/shortage of qualified staff. In high schools too major problems include overcrowded classes, poor teaching aids, assignment of inexperienced directors, and misbehavior of students.

Quality assessments generally indicate, therefore, the existence of critical problems. This is confirmed by studies conducted by the government itself. For instance the National Board of Examinations and Assessment of the government of Ethiopia, recently studied quality of education at grade 4 level and found overall performance to be below average and contrary to expectations. Of pupils whose mother tongue was not Amharic but who were taught using Amharic as a medium of instruction have performed far better than any of the other students taught in their mother-tongue languages.

The Ministry of Education data shows that student/teacher ratio has been increasing over the last five years. In 1995/96 the national average student –teacher ratio at primary and secondary levels were 46 and 33 students respectively, per teacher. By 1999/2000, this rose to 55 and 43. In 2001/02, it further increased to 63 and 49 at primary and secondary levels, respectively. Like other indicators, regional variations are evident in STR. In 2001, the STR at secondary school level was 70 in Tigrai, 51 in Addis and 50 in Amhara regions. In 1999/2000, STR at public schools was 43 while in private schools it was 24.

IV. Issues Surrounding Education Finance

Secondary data sources indicate that the level of per capita expenditure on education in Ethiopia is extremely low compared to other developing countries in Africa and elsewhere. Moreover, a significant proportion of the budget is still used as a recurrent dominated by salary expenses. During the last five years, 72.5% of the total expenditure on education was used to finance the recurrent component and only 27.5% was used for financing capital expenditure. Furthermore, analysis of the trend in sectoral distribution of total government expenditure between 1995/96 and 1999/2000 indicates that the share of education fell from 16% to 9.6% between these two periods. There is no doubt, therefore, that improving the performance of the sector and the quality of education requires reducing misallocation of resources, improving efficiency of resource utilization and allocation of additional resources.

A number of questions on education financing were presented to the three types of sampled respondents; namely, students, teachers and parents. The questions were on anticipated benefits from education and costs incurred to gain education in the form of direct spending and forgone opportunity. There were also questions on respondents’ awareness on the government’s new education and training policy in general and the introduction of the cost-sharing scheme in education. Respondents’ opinions on who should bear the cost of education and alternative mechanisms of cost sharing and payback were gathered. Moreover, respondents’ willingness to pay for improved quality of education were assessed in addition to their proposed fee and modalities of payment for education. The following sections discuss the findings in detail.

IV.1. Perceived Benefits and Costs of Education

Responses from teachers, parents/guardians and students on anticipated benefits from education show that there is a significant value attached to education. Other than the usual expectation of better employment opportunities, social and psychological benefits are anticipated. The table below depicts students’ anticipation of financial benefits that they are likely to earn after graduation. Generally students at high schools have high expectations than their counterpart in colleges. The latter seem to have a more realistic expectations.

Table 37 Students’ Average Expected monthly salary

	At 1^st Employment	5 years after graduation
High school	995	1,847
College	710	984
	812	1,344

An attempt is made to compare expected benefits with actual costs students are incurring to attain education. Given that students are generally dependent on their parents, cost assessment is first made from the view point of the parents.

When parents were asked to respond to the question on the amount of money they spend on their children's education, the average response was Birr 131 per month (See Table 38). This amount significantly varies across occupation type and earning levels of parents. For instance, the highest reported monthly expenditure on education of children was that of medical personnel and “politician” parents while the lowest were pensioners and daily laborers.

Table 38 Parents’ monthly spending on education by occupation

Occupation type	Monthly Education Expenditure in Birr
Teachers	171
Medical Personnel	228
Government Employees	103
Private organization employees	163
Politicians	200
Private business	156
NGO/International Organization	180
Daily laborer	112
Other	130
Pensioned	94
Average	131

Students, on the other hand, reported that they generate some amount of money from various sources, which they spend on schooling and related matters. The average high school and college students get incomes of Birr 69 and 93 per month respectively (See Table 39). The levels of spending by parents and students indicate the value they attach to education. This could serve as a strong premise that parents and/or students might be willing to pay for education. Note, however, that students in private institutions relatively get higher income and spend more than students in public institutions.

Table 39 Students' monthly income and spending in Birr

	Income		Spending
	High school	College	High school	College
Private	130	477	140	376
Public	59	85	40	71
Total	69	93	58	80

In addition, respondents including teachers and students have the opinion that students forego opportunities while attending schools. For instance, students' opinion on the opportunity cost of education show (See Table 40) that a high school student will on average forgo Birr 240 per month and a college student Birr 288 per month. The overall difference in opinion between private and public students concerning opportunity costs is marginal.

Table 40 Students’ Opinion on their Opportunity Cost per month

	High school	College	All
Private	252	386	274
Public	238	586	264
	240	288	264

Note, however, that the difference in opinion between high school and college students is much more pronounced in the case of public institutions than private. College students in public have indicated much higher opportunity cost than is indicated by private college students.

IV.2. Willingness to pay for improved quality of education

Though there has been no apparent consultation between the government and the various stakeholders concerning cost recovery in the education system, both students and parents have shown their willingness to pay more for improved quality service of education. This would not be too much of a surprise when it is seen against the amount of direct spending made by parents and students on schooling and the indirect cost incurred in the form of opportunity cost.

Table 41 Willingness to pay more in Private-vs-Public

	Private		Public		All
	Freq	%	Freq	%	Freq	%
Yes	498	76.9	4168	61.8	4660	63.1
No	77	11.9	1821	27.0	1898	25.7
N.R	73	11.3	756	11.2	829	11.2
Total	648	100.0	6745	100.0	7393	100.0

As shown in the above table, in general, about 63% of students are willing to pay more for improved quality education. Note carefully that about a quarter of students are not willing to pay more even for improved quality of education. Students have likely taken into consideration ability to pay in responding to their willingness. Proportionally, higher number of students in private institutions are willing to pay more for improved quality of public education.

Table 42 Willingness to pay versus Institution type

	High School		College		All
	Freq	%	Freq	%	Freq	%
Yes	2456	61.0	2146	65.7	4666	63.1
No	1140	28.3	737	22.6	1898	25.7
N.R	4333	10.7	381	11.7	829	11.2
Total	4029	100.0	3264	100.0	7393	100.0

Another interesting fact observed in Table 42 is that there is not any appreciable difference between college and high school students on their willingness to pay. One would have expected more willingness at college level given anticipated benefits in near future.

IV.3. Proposed Fee Levels

Teachers and students were requested to indicate their proposed fee for schooling. The average proposed fee for high school, technical/vocational school and college education by teachers were Birr 95, Birr 325 and Birr 361 per semester, respectively (See Table 43). On the average, teachers in private institutions proposed significantly higher fees for both high school and college education than those in public institutions.

Table 43 Teachers' suggested Fee Levels per Semester

Institution Type	High school	Technical Schools	College
Private	132		548
Public	91	325	339
	95	325	361

As indicated in the table below, fees proposed by students for high school and college education are Birr 73 and Birr 147 respectively. The difference in fees proposed by students and teachers is much pronounced in the case of college education. Note also that students in private institutions suggest higher fees than those in public institutions. College students generally proposed higher fee levels than students in high schools.

Table 44 Students' suggested Fee Levels per Semester

	High school	College	All
Private education institutions	148	330	175
Public education institutions	60	139	91
	73	147	100

IV.4. Awareness on new developments in the education sector

Findings of the survey reveal that while less than three in four parents have some knowledge of the existence of a new education policy it is only almost one in two that are aware of the government 's intention of introducing new education financing schemes. Respondents in the sample also indicated that they are not aware of any consultation by the government that was made on the issue involving stakeholders, namely parents, teachers and students. It is highly recommended that concerned stakeholders actively participate in such a scheme in order to ensure successful and smooth implementation of the proposed reform.

Table 45 Level of Awareness/knowledge

	New Education Policy		Introduction of user fees
	Freq	%	Freq	%
NR	48	6.9	8	1.2
No	198	28.5	296	42.7
Yes	448	64.6	390	56.2
Total	694	100.0	694	100.0

At the time of the survey, about two-thirds of the teachers surveyed are aware and have some knowledge of the new education policy of the government in general, though the figure slightly goes down when it becomes more specific to the awareness of the education cost recovery scheme. Responses indicate most of the stakeholders became aware of the new education and training policy and the cost recovery scheme through means other than government created discussion forums.

IV.5. How education fees should be determined

Out of the total responding teachers surveyed it was only slightly above 50% who opted to respond to the question of how education fees should be determined. The great majority responded that the prevailing rates at private institutions could serve as a basis but fees should be below the average set by these institutions (see Table 46). This suggestion is consistently made both for above grade 10 and college education. It is also worth mentioning that still a significant proportion of the responding teachers believe that fees currently charged by the private institutions should have no relevance to determine the level of education fees in public education system. Students' opinion to the same issue is not much different from the teachers.

	High school		College
	Freq	%	Freq	%
NR	121	42.5	59	37.3
Same as private	4	1.4	3	1.9
Below private	122	42.8	67	42.4
Above private	4	1.4
Private not relevant	29	10.2	24	15.2
Other	5	1.8	5	3.2
Total	285	100.0	158	100.0

IV.6. Alternative education financing schemes

Other than the government proposed scheme, respondents suggested alternative education financing options, one of which was the introduction of a national service. Most of the teachers have the opinion that such a scheme gives students a chance to serve freely and pay back what they owe to society. When teachers were further asked as to when this should be introduced, wide ranging opinions were reflected. A large number of them did not specify the time. The majority of those who did think it should be either at the end of the 12^th grade equivalent or just one year before graduation (see Table 47).

Table 47 Teachers' Opinion on when National Service should be introduced

	High school		College		All
N.R.	161	56.5%	71	44.9%	232	52.4%
End of 10th grade	20	7.0%	7	4.4%	27	6.1%
End of 12th grade	43	15.1%	30	19.0%	73	16.5%
End of 1st yr. college	4	1.4%	2	1.3%	6	1.4%
End of 2nd yr. college	6	2.1%	6	3.8%	12	2.7%
End of 3rd yr. college	34	11.9%	24	15.2%	58	13.1%
After graduation	17	6.0%	18	11.4%	35	7.9%
	285	100.0%	158	100.0%	443	100.0%

A summary of students' opinions on the issue revealed that their more preferred choice is a national service that is introduced before college education. A number of reasons were also given for suggesting the introduction of a national service. These include reasons related to paying back to the society, cultural exchange, getting a practical feel of the world of career and so on.

Other proposed schemes include introduction of a special education tax, student loan arrangement, payment after graduation (which is to be deducted from salary), and encouragement of educational institutions to raise additional revenue from other sources including car park, paid short-term courses, attracting foreign students and undertaking of paid research.

V. Conclusions and Recommendations

The primary objective of this study was to assess the status of the quality of education in Ethiopia at secondary and tertiary levels. A secondary objective of the study was to assess the conditions under which the new educational financing mechanism was being introduced and based on this explore possible mechanisms of educational financing in Ethiopia.

The overall results clearly indicate that the status of the quality of education in both high schools and colleges is at a very critical stage. Though the crisis in the Ethiopian education system has been there for a long time, the recent rapid expansion in availability of educational opportunities seems to have occurred at the expense of deteriorating quality of education in the country. The status of quality of education has been critically reviewed from a number of angles including input and output dimensions. Input side indicators of quality of education such as availability, utilization and conditions of facilities show that most institutions are devoid of the required facilities and in situations where they are available, they are usually overcrowded. In some cases, the facilities are non-operational as a result of over use and depreciation. Serious concerns have been expressed particularly on class size, libraries and pedagogical facilities such as computer labs.

Students indicated that classes in particular are in most cases overcrowded and libraries do not have a sufficient number of relevant books. Seventy-two percent of the students said that existing educational facilities are in fair, poor or very poor conditions, whereas half of the students said that educational facilities in general are overcrowded. 56 percent of the students and 83% of the high school teachers and 46% of the college teachers think that classrooms are overcrowded. Generally, 72% of the teachers in public institutions confirmed that classrooms are overcrowded in contrast with only 45% of the teachers in private schools. Sixty-three percent of the students indicated that libraries are overcrowded and books are inadequate. All stakeholders raised concerns but students were the most dissatisfied with existing education system.

Most institutions do not provide access to computer and internet service to their students and teachers. Similarly, science labs are devoid of equipment and the necessary supplies. While the overall constraint arises from meager resource allocated to the sector, many problems are likely to be addressed by improving the efficiency of resource utilization in the sector. It is noted, for example, that the level of per capita expenditure on education in Ethiopia is extremely low compared to other developing countries in Africa and elsewhere. Moreover, a significant proportion of the budget is still used as a recurrent dominated by salary expenses. During the last five years, 72.5% of the total expenditure on education was used to finance the recurrent component and only 27.5% was used for financing capital expenditure.

Analysis of the trend in sectoral distribution of total government expenditure between 1995/96 and 1999/2000 indicates that the share of education fell from 16% to 9.6% between these two periods. The problems facing the sector include quality problems, resource constraint, administrative inefficiencies and poor incentive and institutional structures. Problems frequently mentioned include the declining number of senior staff from secondary and tertiary public institutions, random assignment of fields of study to students, etc.

Quality assessments generally indicated the existence of critical problems. Some of the indications are obtained from the government itself. For instance the National Board of Examinations and Assessment of the government of Ethiopia, which has studied quality of education at grade 4 level, has found overall performance to be below average and contrary to expectations. The Ministry of Education data also shows that student/teacher ratio has been increasing over the last five years. Number of students per class has also been rising during the same period. Repetition and dropout rates are also increasing.

On the output side of the system, high repetition rates, poor capacities of graduates at different levels, and teaching that does not encourage independent thinking and self employment indicated that the sector is in grave danger. Only 55% of college students think education encourages independent thinking. The majority of high school students (59%) said that either they do not believe or are not sure if education encourages independent thinking.

Another indicator of quality, teachers’ qualifications, as evidenced by their own self-assessment and that of their students, shows that teachers largely are not qualified to teach the subjects they are assigned for. Only one third of the teachers in public schools think that they are qualified to teach the subjects they are teaching. In-service training is almost nonexistent. Fifty-six percent of students in colleges rated their teachers’ ability as fair, poor or very poor.

Teachers are de-motivated by a number of factors such as non-existent or poor educational facilities, teaching aids, bad behavior of students (which results from frustration), poor pay, assignment of unqualified directors, and supervisors, and excessive teaching load. There are ample cases where a semester elapses without the students getting teachers for scheduled courses and efforts are usually made to compensate for these either by overloading teachers and students and/or by assignment of teachers that are not qualified for the specific subject areas.

The de-motivation of teachers by the poor payment scheme has forced most of them to look for additional income earning opportunities. Forty-eight percent and 61 percent of teachers at secondary school and college levels, respectively, are engaged in additional income earning activity. This has critically affected their work and support to their students thereby seriously affecting educational quality. Moreover, the internal factors particularly those related to the poor incentive structure in the institutions not only force teachers to remain abroad but also result in migration of staff from public to private colleges and other institutions in search of better remuneration.

About 89 percent of the comments made by the students on the current education system point to the existence of problems in terms of quality, financing and policy. Only five percent of the students said that the existing education system and policy are good. One-fifth of the students specifically mentioned the existing education policy as the major problem.

Whilst the sector is beset by a number of problems, another interesting finding of the study refers to the value that parents and students attach to education. This was revealed through opinions gathered and the cost that parents/guardians and students incur for education in the form of direct spending and opportunity cost forgone. Parents generally believe in the importance of education and are keen to see their children educated. But, at the same time, they are not satisfied with the existing education system.

Improving the performance of the sector and the quality of education requires reducing misallocation of resources, improving efficiency of resources utilization and allocation of additional resources. The government has began introducing a cost recovery scheme in higher education beginning last year. While the impact of this scheme is yet to be seen, it is, however, of paramount importance to ascertain the merits and demerits of alternative strategies and identifying most efficient way of resource mobilization and allocation. This study has explored, therefore, various options for improving the quality and financing of education in Ethiopia. The report stresses that full cost recovery is unlikely to be achieved in the short to medium period and other alternatives of financing mechanisms such as a national service, which is suggested by respondents, should be considered and implemented in parallel with a partial direct cost recovery scheme.

In summary, findings of this study put serious challenge to the government claims that improvement is taking place in the education sector. The study has brought forward a number of issues that need serious attention. It has elaborated major indications that the quality of education in Ethiopia is deteriorating and that this needs to be addressed. The problem with such high level of deterioration in education quality in the face a world driven by information technology and knowledge is not only that the country’s development effort is held back but also its relative position deteriorates continuously as its meager resource base is also eroded via inefficiency. The report also stresses that different financing options need to be considered and piloted before going for cost recovery education fee.

Some possible measures that can be undertaken to rectify this situation include the following.

A comprehensive Policy Review and Appraisal: The government should revisit its policy and the focus given to expanding access to education should be complemented by an equal focus given to the quality of education being provided.

Improving Resource Allocation and its Efficient Utilization: Many of the problems associated with the education system in Ethiopia are connected with a lack of resources. Improving the performance of the sector and the quality of education requires reducing misallocation of resources, improving efficiency of resources utilization and allocation of additional resources.

Concerning education financing a number issues such as anticipated benefits and cost incurred by parents/guardians and students for education in the form of direct spending and opportunity cost, willingness to pay for improved quality of education, modes and amount of proposed fees were raised. Accordingly, it was found out that parents and students attach greater value to education and as a result, they are willing to pay for improved quality of education. The majority of students (63%) are, for example, willing to pay for improved quality of education. Both groups have expressed, however, dissatisfaction with the fact that they were not consulted by the relevant body of the government on the intention of introducing education fees.

Alternative education financing schemes should be explored before going directly to cost recovery through educational fees. For example, the introduction of a national service was suggested by respondents of this study. Students both in private and public educational institutions are highly dependent on their parents whose income is generally very low – between 500 – 1000 birr per month on average. The majority of students in public education institutions (52%) have male parents whose earnings are below 500 birr per month each. Other proposed schemes include introduction of a special education tax, student loan arrangement, payment after graduation (which is to be deducted from salary), and encouragement of educational institutions to raise additional revenue from other sources including car park, paid short-term courses, attracting foreign students and undertaking of paid research.

Affirmative actions towards the enrollment of female students starting from the primary to the secondary and tertiary levels of the education system could contribute positively towards women empowerment. In addition, affirmative action without compromising merits in the recruitment of female instructors can also contribute towards the same end.

The central message of this study is that policy makers should take a deliberate measure to solve the country’s educational crisis. Reversing the existing inefficiency of the system requires the concerted effort of all stakeholders including the government, teachers at all levels, parents, students and the civil society.

References

Central Statistics Authority (2000): “Report on the 1998 Demographic, Health and Nutrition Survey”, Addis Ababa.

Demeke, Mulat, V.Kelly, T.S.Jayne, A.Said, J.C.Le Vallee, and H.Chen. (1998): "Agricultural Market Performance and Determinants of Fertilizer Use in Ethiopia", Working Paper No. 10, Addis Ababa, Ethiopia - Grain Market Research Project, Ministry of Economic Development and cooperation.

Denison, E. F. (1963): "The Sources of Growth in the US", Committee for Economic Development, New York.

Ministry of Education (1998): Education Sector Development Program (1998-2003), Addis Ababa.

Ministry of Education, Annual Educational Statistics Reports 1992-1995, Addis Ababa.

Shultz, T. Paul (1961): "Human Capital and Economic Growth” Yale.

Shultz, T. Paul (1994): "Human Capital, Family Planning and their Effects on Population Growth” American Economic Review, USA.

World Bank (1988): "Education in Sub-Saharan Africa". Washington D.C..

VI. Annex

*Annex 1. Students with Parents earning above 5000 birr*
	Count	Total
Bole	9	280	3.2%
yenegesew	13	76	17.1%
Entoto academic	3	209	1.4%
entoto vocational	2	374	0.5%
Awolia	14	201	7.0%
Lideta cathedral	26	165	15.8%
Akaki public	1	278	0.4%
Akaki adventist	29	194	14.9%
Medihanalem	6	322	1.9%
AAU- FBE	9	301	3.0%
AAU - social science	6	195	3.1%
AAU - Technology faculty	5	123	4.1%
AAU - Natural Science	3	329	0.9%
AAU - medical Science faculty	3	111	2.7%
AA Commercial College	11	307	3.6%
Micro link - IT	4	63	6.3%
Unity	2	50	4.0%
AAU - law	3	122	2.5%
Mekelle senior secondary sch	7	230	3.0%
Aste Yohannes Tech & Voc.	5	145	3.4%
Mekelle Business & Econo Univ	6	285	2.1%
Bahir dar univ	4	202	2.0%
TanaHaik senior secondary sch	1	224	0.4%
TanaFassilo senior sec. Sch.	5	224	2.2%
Gion senior secondary sch	1	194	0.5%
Jimma teachers college	2	161	1.2%
Jimma University	3	143	2.1%
Hawas Technical & Vocational	8	385	2.1%
Goro senior secondary	1	192	0.5%
Harar medhanealem compre.	6	179	3.4%
Alemaya University	4	243	1.6%
Nazreth college of Techn teach	3	644	0.5%
Harar senior secon sch	4	212	1.9%
Awassa college of teachers	1	115	0.9%
Awassa comprehensive	8	396	2.0%
Awassa college of Agricult	2	210	1.0%
Debre berhan TTI	1	172	0.6%
Haile Mariam Mamao com sec	1	127	0.8%

*Annex 2.* Students with parents earning above 5000
	N	Avg. resp
period it takes to get a job after graduation	222	few months
type of business preferred for self-employ.	222	Import/export
primary source of your income	222	pocket m parent
how should fees be determined	222	50% below private
proportion of classmates able to pay	222	All
how many people live in your family	205	7.7
how much you get for educ per month	102	245
how much you spend on edu per month	109	316
job chance after graduation	0
suggested fee per semester	58	108

*Annex 3. Job status of mothers/ GPA cross tabulation*
Job	GPA				Total
Job	1	2	3	4	Total
no	29	241	734	517	1521
yes	10	228	796	566	1600
	39	469	1530	1083	3121

*Job status of mothers/ GPA cross tabulation in %*
Job	GPA				Total
Job	1	2	3	4	Total
no	1.9%	15.8%	48.3%	34.0%	100
yes	0.6%	14.3%	49.8%	35.4%	100


*Job status of Fathers/ GPA cross tabulation in %*
Job	GPA				Total
Job	1	2	3	4	Total
no	21	135	331	197	684
yes	19	359	1237	887	2502
	40	494	1568	1084	3186

*Job status of Fathers/ GPA cross tabulation in %*
Job	GPA				Total
Job	1	2	3	4	Total
no	3.1%	19.7%	48.4%	28.8%	1
yes	0.8%	14.3%	49.4%	35.5%	1

*Annex 4. Students Repeating this grade/ year*
	Private		Public		All
n.r.	53	7.1%	465	5.8%	518	5.9%
no	636	84.9%	6996	87.3%	7632	87.1%
yes	60	8.0%	549	6.9%	609	7.0%
Total	749	100.0%	8010	100.0%	8759	100.0%

*Annex 5.* *Average ESLCE GPA*
	Private	Public	ALL
1		1.2%	45	1.1%
2	42.2%	15.1%	633	15.8%
3	46.8%	49.0%	1960	49.0%
4	11.0%	34.7%	1363	34.1%
	33.3%	25.0%	4001	100.0%


*Annex 5.1* *Average Grade 8 Mark Result of students*
	High school	College	All
Private	91	84	90
Public	75	86	80
	77	86	81

*Annex 6. Students live with during study*
	Frequency	Percent
0	324	3.7
parents	4055	46.3
relatives	553	6.3
guardians	203	2.3
sch./col. Accomodation.	2669	30.5
rented accom.	391	4.5
rented accom. With friends	529	6
other	35	0.4
Total	8759	100

*Annex 7.* *Students live during study with*
	High sch	College	*All*
n.r.	3.4%	3.9%	3.7%
parents	68.4%	18.7%	46.3%
relatives	9.0%	3.2%	6.3%
guardians	3.5%	0.8%	2.3%
sch./col. Accomodation.	2.7%	65.0%	30.5%
rented accom.	6.0%	2.7%	4.5%
rented with friends	6.5%	5.5%	6.0%
other	0.5%	0.2%	0.4%
Total	100.0%	100.0%	100.0%

*Annex 8.* *Fathers' earning distribution*
	school level
	n.r.	college		high school
0-500	112	1164	47.8%	1591	51.5%
501-1000	69	722	29.7%	779	25.2%
1001-1500	25	242	9.9%	277	9.0%
1501-2000	8	110	4.5%	98	3.2%
2001-2500	6	39	1.6%	60	1.9%
2501-3000	5	34	1.4%	55	1.8%
3001-3500	1	24	1.0%	32	1.0%
3501-4000	1	17	0.7%	20	0.6%
4001-4500	1	9	0.4%	26	0.8%
4501-5000		17	0.7%	25	0.8%
5001& above	3	57	2.3%	126	4.1%
	341	2435	100.0%	3089	100.0%

*Mothers earning distribution*
	school level
	n.r.	college		high school
0-500	108	1270	66.9%	1363	64.1%
501-1000	42	401	21.1%	459	21.6%
1001-1500	12	105	5.5%	120	5.6%
1501-2000	4	35	1.8%	43	2.0%
2001-2500	1	19	1.0%	21	1.0%
2501-3000	2	18	0.9%	24	1.1%
3001-3500		10	0.5%	12	0.6%
3501-4000		3	0.2%	5	0.2%
4001-4500	2	4	0.2%	8	0.4%
4501-5000		2	0.1%	16	0.8%
5001& above	3	31	1.6%	56	2.6%
	341	1898	100.0%	2127	100.0%

*Annex 9. Job Status of Students' Fathers/ MG*
	Private		Public
no	64	10.0%	1433	22.4%	1497
yes	575	90.0%	4976	77.6%	5551
	639	100.0%	6409	100.0%	7048

*Annex 10. Students' Father/MG Job Status*
	Private		Public		All
n.r.	110	14.7%	1601	20.0%	1711	19.5%
no	64	8.5%	1433	17.9%	1497	17.1%
yes	575	76.8%	4976	62.1%	5551	63.4%
	749	100.0%	8010	100.0%	8759	100.0%

*Annex 11.* *Students' Mothers'/FG Job Status*
	Private		Public		All
	136	18.2%	1787	22.3%	1923	22.0%
no	250	33.4%	3328	41.5%	3578	40.8%
yes	363	48.5%	2895	36.1%	3258	37.2%
	749	100.0%	8010	100.0%	8759	100.0%

*Annex 12.* Parents earning level per month
	Private Public
	Private		Public
0-500	81	19.9%	2315	51.1%	2396
501-1000	80	19.6%	1306	28.9%	1386
1001-1500	47	11.5%	427	9.4%	474
1501-2000	31	7.6%	160	3.5%	191
2001-2500	25	6.1%	69	1.5%	94
2501-3000	21	5.1%	66	1.5%	87
3001-3500	16	3.9%	34	0.8%	50
3501-4000	10	2.5%	19	0.4%	29
4001-4500	10	2.5%	20	0.4%	30
4501-5000	18	4.4%	18	0.4%	36
5001& above	69	16.9%	92	2.0%	161
	408	100.0%	4526	100.0%	4934

*Annex 13. Total Number of Teachers currently Teaching a student*
	Level of Education
	High school	College	All
Private	8	6	7
Public	9	7	8
	9	7	8

*Annex 14. Number of Teachers teaching more than one subject*
	Level of Education
	High school	College	All
Private	2	2	2
Public	2	2	2
	2	2	2

*Annex 15. Repeating Students by Level*
	repeating this yr			Total	*Repeating in %*
	N.R.	no	yes	Total	*Repeating in %*
	28	288	25	341	7.3%
college	267	3475	113	3855	2.9%
high school	223	3869	471	4563	10.3%
Total	518	7632	609	8759	7.0%

*Annex 16.* Male parent Job status
n.r.	125	18.0%
NO	103	14.8%
YES	466	67.1%
	694	100.0%

*Annex 17.* Female parent Job status
n.r.	99	14.3%
NO	339	48.8%
YES	256	36.9%
	694	100.0%

*Annex 18. Average number of Subjects Teachers teach*
		Private	Public
Level of Education	High school	1	1	1
Level of Education	College	2	2	2
		2	2	2


*Annex 19. Number of Classes/ lectures per week on average*
		Private	Public
Level of Education	High school	22	19	19
Level of Education	College	16	9	10
		21	15	16


*Annex 20. Average Number of Students per class/ lecture*
		Private	Public
Level of Education	High school	67	74	73
Level of Education	College	35	54	53
		60	67	66

*Annex 21. Qualified to Teach the subjects they teach based on self-assessment*
	Private		Public
N.R.	8	21.1%	73	18.0%	81	18.3%
All subjects	18	47.4%	137	33.8%	155	35.0%
Some subjects	10	26.3%	180	44.4%	190	42.9%
None	2	5.3%	15	3.7%	17	3.8%
	38	100.0%	405	100.0%	443	100.0%

*Annex 22. Qualified to Teach based on self-assessment*
	High school		College
N.R.	72	25.3%	9	5.7%	81	18.3%
All subjects	67	23.5%	88	55.7%	155	35.0%
Some subjects	136	47.7%	54	34.2%	190	42.9%
None	10	3.5%	7	4.4%	17	3.8%
	285	100.0%	158	100.0%	443	100.0%

*Annex 23. Students' Major Comment on Quality & Financing of Education*
	Number	%
*Quality of education is poor*	1993	26.0%
*Curriculum problem*	619	8.1%
*Policy problem*	1537	20.0%
*Poor quality & motivation of teachers*	717	9.4%
*Poor educational facilities*	712	9.3%
*Shortage of budget*	114	1.5%
*Poor admin & political interference*	121	1.6%
*Education should be free*	482	6.3%
*Policy implementation problem*	192	2.5%
*Other problem related comments*	329	4.3%
*Quality of education is good*	333	4.3%
*Current policy is good*	51	0.7%
*Suggested ways of increasing finance*	466	6.1%
		0.0%
	7666	100.0%

*Annex 24. Willingness to pay for improed quality of education*
	Private		Puplic		All
Yes	498	66.5%	4168	52.0%	4666	53.3%
No	77	10.3%	1821	22.7%	1898	21.7%
Not sure	73	9.7%	756	9.4%	829	9.5%
	749	100.0%	8010	100.0%	8759	100.0%

*Annex 25. Willingness to pay for improved quality*
	Level of Education
	High school		College		All
Yes	2456	61.0%	2146	65.7%	4666	63.1%
No	1140	28.3%	737	22.6%	1898	25.7%
Not sure	433	10.7%	381	11.7%	829	11.2%
	4029	100.0%	3264	100.0%	7393	100.0%

[1] The purpose of this sub-section is not to undertake a comprehensive literature review but rather to merely introduce the subject.

[2] Sharada Weir and John Night, Adoption and \diffusion of Agricultural Innovation in Ethiopia: the Role of Education; WPS 2000-5, center for the study of economics, oxford, November 2000, UK.