America’s Schools Losing Productivity Race

Published March 1, 2004

Productivity–the ratio of inputs to outputs–is a way to measure the quality of a wide variety of programs and services. Recently, researchers have been applying the concept of productivity to public schools. They have revealed a system in crisis.

The Organization for Economic Cooperation and Development (OECD) recently published a survey of school inputs and outputs for two dozen economically advanced countries. U.S. schools recorded the smallest gains in student achievement during the average student’s school career, while also reporting the third highest per-student spending levels (adjusted for living costs) for primary and secondary education. Consequently, U.S. schools rank dead last in productivity, defined as improvement in student achievement per dollar spent.

Harvard economist Caroline Hoxby recently divided average student achievement scores from the National Assessment of Educational Progress by per-pupil spending data from the U.S. Department of Education to estimate the change in productivity between 1970-71 and 1998-99. She found American school productivity fell by between 55 and 73 percent, depending on the skill and age cohort tested. According to Hoxby, if schools today were as productive as they were in 1970-71, the average 17-year-old would have a score that fewer than 5 percent of 17-year-olds currently attain.

The falling productivity of government schools can be traced to three developments. The first is growth of a vast bureaucracy of nonteaching personnel. Government schools in the U.S. report a higher ratio of nonteaching personnel to teachers than government schools in any other developed country.

In 1997-98, the latest year for which data are available, 12 states had fewer teachers than nonteachers in their government schools workforce. In Michigan, for example, teachers comprise only 44.5 percent of the workforce; yet the Michigan system had fewer aides and other school-level staff than the national average. The rest worked in offices and bureaucracies remote from the actual classroom.

The second trend is the fall in average class size. The number of teachers rose significantly faster than school enrollment since 1970, though not as rapidly as nonteaching personnel. The ratio of students to government school employees fell from 13.6 in 1970 to 8.6 in 1998, a decrease of 36.8 percent. During that same time, the ratio of students to teachers fell from 22.3 to 14.1, a decrease of 27.4 percent.

According to George Clowes, managing editor of School Reform News, “When coupled with the static student achievement levels, the drop in pupil/teacher ratio indicates K-12 public education at all grade levels has become significantly less productive than it was three decades ago. In 1999, public schools required half as many more staff in total (up 58.1 percent)–including a third more teachers (up 37.6 percent)–to educate the same number of children to the same level of quality as they did in 1970. Thus, while productivity in the economy as a whole increased by 74 percent, productivity in K-12 education fell by 27 percent.”

The third reason for the low productivity of government schools is a dropout rate that has not fallen despite large increases in spending and personnel. Students who drop out before graduating increase the cost per graduated or “finished” student. The high school completion rate was officially reported as being 86.5 percent in 2000, but this statistic includes dropouts who eventually earn an inferior General Educational Development (GED) certificate outside the traditional government high school. Removing these students produces a high school graduation rate of only 74 percent, virtually unchanged since the 1970s.

The new research on school productivity has important lessons for policymakers. First, U.S. public schools are losing the productivity race with other producers of goods in services in the U.S., and with schools in other countries. Second, simply increasing inputs by spending more money and reducing class size will do very little to improve student achievement so long as productivity is so low. And third, despite decades of talk and more money, public schools show no sign of being able to reform themselves.

Herbert Walberg ([email protected]) is a distinguished visiting fellow at the Hoover Institution at Stanford University, and Joseph Bast ([email protected]) is president of The Heartland Institute. They are coauthors of Education & Capitalism, released in November 2003 by Hoover Institution Press.