Productivity in Public Education

Published March 1, 2002

Productivity is the rate of output per unit of input. In most instances, productivity means labor productivity: the quantity of output produced by a given quantity of labor. For example, if an employer gives two workers the same tools and equipment to perform the same task, such as assembling circuit boards, the worker who assembles more operational boards in a given hour is said to be more productive.

In a market economy, a highly productive worker commands higher pay than a less-productive worker. Improvements in workflow procedures and investments in technology allow workers to increase their productivity.

Labor productivity may be increased by changing one or more of its three components:

  • by producing a larger quantity of the same quality output;
  • by producing the same quantity of a higher quality output; and
  • by producing fewer rejects.

Increased productivity is a key fuel source for economic growth, since it permits employers to pay higher wages for the same hours of work. In the U.S. economy, wage increases in the non-farm business sector over the past 30 years have been made possible by a 74 percent increase in output per hour, from 67.0 in 1970 to 116.6 in 2000, according to data from the Bureau of Labor Statistics.

Using the circuit board analogy, that productivity increase means a worker in 2000 assembles 74 percent more circuit boards per hour–say, 174 versus 100–than the same worker did in 1970.

K-12 Education Quality

The same rules governing productivity are applicable to K-12 education, even though the work product is high school graduates rather than circuit boards. Labor productivity in education may be increased by producing either a larger quantity of the same quality graduates, the same quantity of higher quality graduates, or fewer non-graduates.

Is public education producing higher quality graduates? That question may be addressed by examining the test scores of 17-year-olds in the National Assessment of Educational Progress (NAEP), which provides an ongoing “Report Card for the Nation” on student achievement in reading, mathematics, and science. It is the only ongoing, nationally representative assessment of academic performance in the nation’s K-12 schools.

In all three subject areas, NAEP test scores for 17-year-olds show virtually no change from the 1969-73 period until the most recent tests in 1999. From a productivity point of view, the quality of education being delivered today is essentially unchanged in quality over the past three decades.

Teacher Productivity

In K-12 education, the work product is not circuit boards per hour but high school graduates per K-12 education cycle. In more measurable terms, the education work product is the addition of a grade level of learning to each student for each year of school attendance. And just as circuit boards are tested at each stage of their manufacture to ensure they will function properly at the next stage, most students are tested at the end of each school year to determine if they have acquired the skills and knowledge to function properly at the next grade level.

However, there is a significant difference between the production of circuit boards and student learning. Whereas a worker who assembles circuit boards produces them sequentially, one after another, a teacher who produces student learning does it in parallel, to a class of 10, 15, 25, 35, or more. Thus, the number of students per teacher, or the pupil/teacher ratio, provides a ready measure of the productivity of the system as a whole.

According to the U.S. Department of Education, the pupil/teacher ratio in public schools fell from 22.3 in 1970 to 14.1 in 1999, a decrease of 27.4 percent. Elementary and secondary schools experienced similar decreases over the same period, from 24.3 to 17.6 for elementary schools and from 19.8 to 14.1 for secondary schools. The overall pupil/staff ratio fell from 13.6 in 1970 to 8.6 in 1998, an even larger decrease of 36.8 percent.

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 require 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.

Class-Size Reduction

Although pupil/teacher ratio is not the same as class size, the two are closely related, and a reduction in class size has the same negative effect on productivity as a reduction in the pupil/teacher ratio. Despite its detrimental effect on productivity, reducing class size is widely promoted by public school educators as a means of improving student achievement, i.e., product quality.

However, research studies provide no support for this reform strategy, according to Stanford University economist Eric Hanushek. Most of the more than 200 studies examined by Hanushek show an insignificant effect of class size on student achievement, and the rest report a balance of positive and negative effects.

As well as the flat national NAEP test scores since the 1970s, state-level NAEP scores in mathematics, science, and reading all show no relationship to pupil/teacher ratio, despite a two-fold variation in the ratio, from 11.9 in Vermont to 22.1 in Utah.

For example, in the 2000 NAEP mathematics test, Nebraska and Oregon produced similar percentages of eight-graders scoring at proficient or above–31 percent and 32 percent respectively–yet Nebraska had 13.7 pupils per teacher, while Oregon had 19.6. In the same test, Kentucky and Minnesota had similar pupil/teacher ratios–15.3 and 15.1 respectively–yet only 21 percent of Kentucky’s students scored at proficient or above compared to 40 percent of Minnesota’s students.

High School Graduation Rate

Although the flat NAEP test scores and the decline in pupil/teacher ratio indicate a decrease in public school productivity since the 1970s, school productivity could have increased if today’s public schools were graduating a higher percentage of their students with high school diplomas. Is that the case?

According to government reports, the U.S. high school completion rate increased from 82.8 percent in 1972 to 86.5 percent in 2000. While this increase appears to show the productivity of the K-12 education system has increased, a closer examination of completion rates suggests high school graduation rates may be lower now than in 1972.

That is because the reported “completion rate” is not the same as the high school graduation rate, which may be significantly lower. In fact, a recent study by Jay P. Greene of the Manhattan Institute computes a national graduation rate of only 74 percent for the class of 1998. (See “Study Exposes Severity of School Dropout Problem,” School Reform News,” January 2002.)

Completion rate includes not only students who received a diploma at the end of their high school careers, but also students who dropped out of high school before receiving a diploma and subsequently secured a General Educational Development credential outside of the K-12 educational system.

Young people who complete their high school education with a GED are analogous to circuit boards that come off the production line in non-working order and are made functional only by the application of additional corrective work.

Cost Per Finished Student

While per-pupil spending is frequently used to compare how much taxpayers put into different school districts, dividing this figure by a district’s high school graduation rate provides a means to compare how productively each district is using those tax dollars to create high school graduates. That measure was proposed by former Associate U.S. Commissioner for Elementary and Secondary Education Leon M. Lessinger. (See “New Measure Calculates Cost Per Prepared Student,” School Reform News, September 1998.)

“We have not been including the cost of our ‘scrap’–students who cannot function in today’s society–and therefore we do not arrive at the full cost of our education system,” says Lessinger, arguing the cost-per-prepared-student statistic permits taxpayers to measure the effective contribution of schools to the good of society and to the community.

When per-pupil expenditures for the 1997-98 school year are divided by Greene’s high school graduation rates, the resulting cost per finished graduate varies significantly across school systems and states. For example, although Cleveland’s cost per student is only slightly above the U.S. average, the Ohio city spends almost three times the U.S. average–$297,282 versus $108,726–to produce each graduate. By contrast, Utah’s Jordan school district produces each finished graduate for just over half the U.S. average, or $59,199.

“Disadvantaged” Raw Material

If the quality of the raw materials used in an industrial process falls, more value usually must be added in the production process for the quality of the end product to be maintained at the same level as before.

That frequently results in a temporary reduction in productivity, either because of increased rejects or because of the additional remedial work needed to bring the raw materials up to the required standard before they can be used in the production process. However, as these new elements are incorporated into the production process, productivity usually is restored to its previous level.

The term “lower quality input” isn’t used in K-12 education, but a large number of public school students are regarded as “disadvantaged” by one or more characteristics such as minority status, coming from a low-income household, not speaking English at home, and having parents who aren’t highly educated. Many educators claim such students cannot achieve at the level expected of the average “advantaged” student unless significant additional resources are applied to their education.

Three years ago, Samuel Casey Carter, a Bradley Fellow at The Heritage Foundation, interviewed more than 100 principals at schools that scored in the top one-third in national exams but where more than 75 percent of the students came from low-income families. His conclusion: Children from all income levels can excel–it all depends on the attitude of the school, not the demographics of the student.

The Education Trust surveyed 366 high-poverty, high-minority, high-performance schools that same year and, in a report titled “Dispelling the Myth,” reached the same conclusion.

In a follow-up report last December, the Trust buttressed the point that all children can excel by identifying more than 4,500 schools that achieve high levels of performance with high-poverty, high-minority student bodies totaling more than 2 million. The traits of the schools are the determinants of student success, not the traits of the students.

Administrators at New York City’s Baruch College came to a similar conclusion about a broader range of students when they decided to eliminate remedial education some years ago. They found the need for remedial education was not correlated with a student’s economic, social, or cultural background, but with the high school the student attended. (See “Is Remedial Ed Necessary?”, School Reform News, November 1999.)

With regard to educational productivity, this means the quality of the incoming student is much less important than the nature of the educational process that takes place in the school. School trumps demographics.

Next month: How to increase student achievement without increasing spending

For more information …

Bureau of Labor statistics are available at the BLS Web site. Point your browser to, then click on “historical time series.”

The Manhattan Institute report by Jay P. Greene, “High School Graduation Rates in the United States,” prepared for the Black Alliance for Educational Options, is available on the Manhattan Institute’s Web site at

Pupil/Teacher Ratios and Per-Pupil Expenditure data are published by the National Center for Education Statistics at the U.S. Department of Education and are available from the NCES Web site in the document, “Early Estimates of Public Elementary and Secondary Education Statistics: School Year 2000-2001,” at

Data for large U.S. school districts also are available from NCES in the report “Characteristics of the 100 Largest Public Elementary and Secondary School Districts in the United States: 1999-2000,” available at

Data from the National Assessment of Educational Progress are published by the National Center for Education Statistics at the U.S. Department of Education and are available from the NCES Web site using the NAEP Data Tool at

The December 2001 report from the Education Trust, authored by Craig D. Jerald and titled “Dispelling the Myth Revisited: Preliminary Findings from a Nationwide Analysis of ‘High-Flying’ Schools,” is available from the Trust’s Web site at