Must public education suffer from Baumol’s disease?

Where other service industries have found productivity gains in organizational redesign, education’s organizational infrastructure has evolved at the speed of concrete.

Over the last 30 years, spending on public education in the U.S. has nearly doubled, to about $9,000 per pupil when adjusted for inflation. Yet on average, many would agree that our K-12 schools are producing only slightly better results than in the late 1970s.

A thirty-year look at the National Assessment of Educational Progress results for seventeen-year-olds, for instance, suggests that test scores have changed very little. Math and reading have nudged up while science and writing have dropped.

By the normal definition of productivity-the amount produced per dollar spent-K-12 public education is falling behind.

One way to think about declining productivity in education is to attribute it to Baumol’s disease (named after its discoverer, economist William Baumol), a tendency for costs in service industries to rise even as outputs stay the same. While innovation makes workers in manufacturing industries more productive and their wages go up, the disease thrives as other service industry workers demand more pay to keep up with the rest of the economy, even as their outputs remain fixed.

Is Baumol’s disease inevitable in education? Some service sectors have beaten it with innovation.

By Marguerite Roza

Full Story: http://www.denverpost.com/headlines/ci_10071559