The Productivity Collapse in Schools 183 The Productivity Collapse in Schools Eric A. Hanushek University of Rochester New York About the Author This work was supported by a grant from the William H. Donner foundation. Eric Hanushek is a Professor of Economics and Public Policy and Director of the W. Allen Wallis Institute of Political Economy at the University of Rochester. He joined the University of Rochester in 1978 and has previ- ously been Director of the university's Public Policy Analysis Program and Chairman of the Department of Economics. From 1983–85, he was Deputy Director of the Congressional Budget Office. Dr. Hanushek's research involves applied public finance and public policy analysis with special emphasis on education issues. He has also investi- gated the determination of individual incomes and wages, housing policy, social experimentation, statistical methodology, and the economics of dis- crimination. His publications include Improving America's Schools, Modern Political Economy , Making Schools Work , Educational Performance of the Poor , Improving Information for Social Policy Decisions , Statistical Methods for Social Scientists , and Education and Race , in addition to numerous articles in professional journals. Dr. Hanushek was a Distinguished Graduate of the United States Air Force Academy where he received his Bachelor of Science degree in 1965. Between 1965–74 he served in the U.S. Air Force and in 1968, he completed his Ph.D. in Economics at the Massachusetts Institute of Technology. Dr. Hanushek had prior academic appointments at the U.S. Air Force Academy (1968–73) and Yale University (1975–78). During 1971–72 he was a Senior Staff Economist at the Council of Economic Advisors and during 1973–74, he was a Senior Economist at the Cost of Living Council. During 1988–89 he was president of the Association for Public Policy Analysis and Management.
The Productivity Collapse in Schools 185 Introduction A minor controversy has developed over the pattern of productivity in public schools. A prima facie case for a productivity collapse can be found in the rapidly rising spending on schools over the past quarter century with no apparent improvement in student achievement (Hanushek et al. 1994). There are, of course, a number of factors that could contrib- ute to these aggregate trends and therefore could provide an alternative explanation other than a productivity collapse. One explanation receiving considerable publicity concentrates not on fundamen- tal changes in students or schools but on pure mea- surement issues (Rothstein and Miles 1995; Mishel and Rothstein 1996). The central issue in their discussion is how to allow for the effects of inflation in measuring school spending. While not their interpretation, the position taken here is that their analysis provides perhaps the most persuasive case for a productivity collapse that is currently available.
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