Productivity measures are useful to assess performance and efficiency of resource use. The ABS currently compiles multifactor productivity (MFP) estimates for market sector industries but not for non-market sector industries¹. Non-market sector industries have a large portion of output which are 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.
For non-market industries there are conceptual and practical difficulties in measuring and interpreting productivity. 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 describes experimental productivity indexes developed for Australian schools. It builds upon recently published experimental indexes, expanding the scope for the volume of output of school education services². This paper also introduces experimental measures of input volumes used in the production of school services.
The experimental estimates indicate that school MFP fell on average 1.2% each year over the period 2008-09 to 2018-19, and labour productivity fell on average 1.1% each year over the same period. When interpreting these productivity measures it is important to remember that they don’t capture quality changes in the delivery of education services, such as changes to class size, individual learning plans, or other labour-intensive educational settings such as special learning units. It is estimated that around 60% of the fall in productivity could potentially be attributed to changes in the ratio of students to staff. If this is taken into account MFP would have fallen on average 0.5% each year.
These estimates do not reflect the impacts 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 school output and productivity when data becomes available.
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- Industries considered to be non-market for the purposes of productivity statistics are Divisions O (Public Administration and Safety), P (Education and Training), and Q (Health Care and Social Assistance).
- School output measures in the Australian National Accounts: experimental estimates, 2007-08 to 2017-18 | Australian Bureau of Statistics (abs.gov.au)