Productivity measures are useful to assess the performance and efficiency of resource use. The ABS currently compiles multifactor productivity estimates for market sector industries but not for non-market sector industries.¹ Non-market sector industries have a large portion of output provided at prices that are not economically significant. That is, goods and services are provided at prices below the cost of provision, such as public school education, or public hospital services.
Given the importance of non-market industries to the Australian economy, the ABS has a research agenda to address this gap in productivity statistics. This paper presents experimental estimates of multifactor productivity for higher education, a sub-component of the education and training industry.
The estimates show that between 2008-09 and 2018-19, higher education labour productivity grew on average by 1.2% per annum. This growth is similar to the average growth of market sector industries (around 1.1%). Multifactor productivity grew on average 0.5% per annum, with increased use of intermediate inputs (per hours worked) contributing about 0.6 percentage point to annual growth in labour productivity.
It is important to note that these estimates do not reflect the impact of COVID-19 as the analytical timespan ends at 2018-19. However, the methodology used in this paper will reveal medium to long term impacts of COVID-19 on higher education output and productivity when data becomes available.
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