Academic journal article Monthly Labor Review

Labor Productivity Growth in Elementary and Secondary School Services: 1989-2012

Academic journal article Monthly Labor Review

Labor Productivity Growth in Elementary and Secondary School Services: 1989-2012

Article excerpt

New measures of labor productivity in elementary and secondary schools show that labor productivity declined from the mid-1990s through the first decade after 2000. However, it increased from 2010 forward because of labor input declines combined with modestly increasing enrollments and test scores.

Education is a primary driver of economic growth and stability for nations and for individuals. (1) Investments in education affect the ability of a country to compete in international markets and to ensure increases in living standards for its residents. On an individual level, returns to investments in education are well documented. For example, high school dropouts earn less over their lifetimes than high school graduates. In addition, the penalty associated with lower educational attainment has become more pronounced over time: after the earnings are adjusted for inflation, economists project that expected lifetime earnings of high school dropouts today are less than the expected lifetime earnings of high school dropouts in 1970. (2)

In 2014, nearly 9 percent of all U.S. workers, almost 13 million individuals, were employed in the educational services sector. (3) In fact, the education sector now employs more workers than the entire manufacturing sector. Within the educational services sector, the elementary and secondary schools industry employed just over 8 million individuals, or 65 percent of employees in the broader education sector. (4) For the 2013-14 school year, expenditures for educational services in the United States are estimated at $1,194 billion, or 7.1 percent of the United States Gross Domestic Product (GDP). Of this total, $682 billion, or 4.1 percent of GDP, were expenditures for educational services at public and private elementary and secondary schools and $512 billion, or 3.1 percent of GDP, were expenditures for education at postsecondary degree-granting institutions. (5)

Labor productivity is a statistical measure that relates an industry's output of services to the quantity of labor required to produce those services. Productivity data are essential for one to understand the education industry because they provide information on the efficiency of the production of services.

The U.S. Bureau of Labor Statistics (BLS) has developed measures of labor productivity and related series, including unit labor costs, for North American Industry Classification System (NAICS) 6111, elementary and secondary schools, the second largest component industry in the education sector by employment and receipts, after NAICS 6113, colleges, universities, and professional schools. (6) This is the first detailed industry in the education sector for which BLS has developed labor productivity series. The new measures reflect BLS commitment to expand its coverage of service industries, including those industries for which developing reliable series presents a significant challenge. This article introduces the new measures and examines productivity trends in this industry from 1989 to 2012.

The elementary and secondary schools industry includes both public and private schools providing educational and related services that constitute a basic preparatory education, typically from kindergarten through the 12th grade. (7) BLS measures for this industry include data for all schools, as well as separate data on public and private schools. During the 2012-13 school year, 98,454 public schools and 30,651 private elementary and secondary schools, serving over 55 million students, were operating in the United States. (8) Over 90 percent of these students attended public schools, while less than 10 percent attended private schools. (9) Although public school students overwhelmingly attended traditional public schools, the number of public school students attending charter schools increased from 0.7 percent in the 1999-2000 school year to 4.6 percent in 2012-13. (10) Charter schools are independent public schools operating under a contract or "charter," with a state agency or local school board. …

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