BOX 3.2
Macro or Sector Level Accounting

The U.S. statistical agencies do not currently produce a measure of education sector productivity, although some components of such a measure are available. The Bureau of Economic Analysis (BEA) produces several nominal and real higher education consumption measures. The National and Income and Product Accounts (from which the nation’s gross domestic product statistics are estimated) include real and nominal measures for education personal consumption expenditures (PCE) and for education consumption expenditures aross all government levels. The PCE tables include expenditures for books, higher education school lunches, and two other expenditure categories: (1) nonprofit private higher education services to households and (2) proprietary and public education. The nominal value of these two components is deflated by the BLS CPI-U college tuition and fees price index to produce an inflation-adjusted measure. The nominal value for gross output of nonprofit private higher education services to households is deflated by an input cost-based measure, which is a fixed weight index. This input cost-based deflator is constructed from BLS Quarterly Census of Employment and Wages, PPI, and CPI data. Although BEA measures the nominal value of education national income components such as wages and salaries and gross operating surplus (profits, rents, net interest, etc.), it does not produce real measures of these education input income components. Accordingly, BEA data would have to be supplemented with other data to create a measure of education productivity.

Beyond the United States, a mandate from Eurostat motivated European Union members and others to undertake research on how to measure education output and inputs. In the United States, most of this kind of research has focused on elementary and secondary education. In the United Kingdom, debate about how to measure government output, including education, resulted in the formation of the Atkinson Commission. However, though there have been calls to do so, no consensus has been reached about how to measure the real output of education independently from inputs.

A different approach to understanding higher education productivity would be to look at more indirect measures. One possibility is to use information such as that slated to be released in 2013 by the Programme for the International Assessment of Adult Competencies (PIAAC) of the OECD. PIAAC will assess adults’ literacy and numeracy skills and their ability to solve problems in technology-rich environments. It will also collect a broad range of information from the adults taking the survey, including how their skills are used at work and in other contexts such as in the home and the community. Ideally, in addition to educational attainment, information on college major, previous work experience, and the dates and types of higher education institutions attended is desired to estimate higher education productivity based on PIAAC-collected data. Accordingly, PIAAC and other skill-based surveys might be a better indicator of human capital, rather than higher education output or productivity.

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