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Tuition has ballooned to a S$1.4b industry in Singapore. Should we be concerned?

Singapore households spent S$1.4 billion on tuition, based on the Household Expenditure Survey conducted by the Department of Statistics from October 2017 to September 2018.

This sum has grown steadily over the years, climbing from S$650 million around 15 years ago and S$1.1 billion in 2012/13. A report in The Straits Times noted that the number of tuition and enrichment centres has seen a corresponding increase over the years, growing from about 700 in 2012 to more than 950 today.

These figures might seem alarming. But, actually, a more muted picture is painted once one considers these expenditures on a per household-per month basis. Average household spending on tuition amounted to a less striking S$88.40 per month in 2017/2018 (1.35 million households), compared to S$79.90 per month (1.2 million households) in 2012/2013 and S$54.70 (just under a million households) 15 years ago.  

The picture becomes even more muted if one accounts for inflation. Given that households spent an average of S$4,906 a month on goods and services in 2017/2018, tuition contributed to less than 2 per cent of monthly household expenditure.

Despite this, the figures do indicate that families in Singapore are spending a non-trivial amount on private tuition. Why hasn't the tuition industry showed obvious signs of slowing, despite recent reforms by the Ministry of Education to help students discover the joy of learning and to move away from a narrow emphasis on academic grades? Have these reforms been ineffective? I think not.

It would be too premature to conclude anything about the efficacy of these reforms at this point. Although reforms such as the removal of mid-year examinations (for selected academic levels), changes to the Primary School Leaving Examinations scoring system, and the abolition of streaming in secondary school have been announced, many have yet to kick in.

The lag between announcement and implementation allows stakeholders such as parents, teachers, and schools to have sufficient time to understand and adapt to the changes. So changes to the PSLE scoring system will begin only in 2021 while secondary school streaming will be abolished only in 2024.

While schools have done away with graded assessments for Primary 1 and 2 and mid-year exams for Secondary 1, mid-year exams for Pri 3 and 5 and Sec 3 have not fully been removed. Because many of the changes have yet to kick in, it would be unrealistic to expect any effects so soon, much less expect to see effects showing up in 2017/2018.

We are likely to see any effects of these reforms only in decades to come, after the full suite of changes have taken place and parents have a fuller understanding of what they entail. Until then, parents are likely to adopt a cautious attitude, preferring to continue with tuition if they had been doing so prior, if only as a form of insurance.  

The growth of the tuition industry is fuelled primarily by two factors: Increasing average real incomes of households and the desire for parents to see their children keep up with the competition. For many parents, tuition has become the dominant strategy: If other parents enrol their kids for tuition, it would be best to do likewise so that their own kids will not lose out.

If other parents do not do so, it would still be best to enrol the kids so that they will come out ahead. This results in a situation where parents enrol their children for tuition, even when they are doing well in school. The recent reforms to the education system are likely to blunt incentives to compete so that parents are less likely to view tuition as a necessity. However, any moderating effects on the demand for tuition will take time to manifest.

Interestingly, expenditure figures from the Household Expenditure Survey indicate that higher-income families are spending more on tuition, with the top 20 per cent of households by income spending nearly four times as much on tuition as those in the bottom 20 per cent. Although this is unsurprising, since richer families will be better able to afford tuition, this is a somewhat worrying phenomenon. This is because the differential access to tuition could end up increasing educational inequality between children from economically disadvantaged and advantaged backgrounds.

To make matters worse, the quality of tutors that students have access to is likely to vary by students' economic status. While students from richer families have the means to hire higher-quality tutors who have the expertise to help them learn better, students from poorer families might have to contend with lower-quality tutors because of affordability issues.

The fact that anyone can be a freelance tutor in Singapore implies that we have a spectrum of tutors, differing in terms of quality.

While some tutors might be very effective, others may not be. Some could merely be taking on the job as a way to supplement their incomes or as a time-filler as they await entry into higher education or a full-time job. These tutors are likely to lack strong incentives to take the time to understand the child’s syllabus well and may provide erroneous information as a result.

The worry is that students from lower-income families may be accessing ineffective tutors who are effectively impeding their academic progress rather than aiding it, since higher-quality tutors typically charge more. It would be better in this case to simply rely on themselves and their school teachers rather than to receive tuition. 

The solution to this problem is not necessarily imposing increased regulations on the tuition industry, but rather, to educate students and their parents so that they will be empowered to select their tutors effectively.

In selecting tutors, students should ask:

Does this tutor have a proven track record? Does he / she possess the necessary qualifications to teach the subject? Has my appreciation of the subject increased since I started receiving coaching from him/her?

Choosing tutors based on these considerations rather than a focus on the tuition fees will enable students to select tutors who will more effectively help them.



Kelvin Seah Kah Cheng is a lecturer at the Department of Economics, National University of Singapore and a research affiliate at the Institute of Labor Economics (IZA). His research focuses on the economics of education.

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