From the production function, we can see that productivity implies the number output produced with a given set of inputs. The usual outputs and inputs of productivity (Y/L) measurement in an economy is Y as GDP (output), L is labor, followed by other factors of inputs, such as physical capital (K), human capital (H), and natural resources (N), therefore this equation summarizes the determinant factors of productivity Y/L = AF (K/L, H/L, N/L).
But how do we define the output and inputs for university? While productivity measurement methods are well-established in the private economy, progress has been slower in areas like education, where outputs are less tangible and not easily measured. Unlike a firm or nation, it is a misconception to think that the main goal of higher education is to enhance GDP or individual incomes.
Many vital roles in society, such as teachers and social workers, are in fields with lower pay. If productivity is judged solely by post-graduation incomes, institutions that produce more graduates in these important but lower-paying fields may seem less productive than those producing many high-earning business graduates.
Universities (normally) are not motivated by profit and their outputs, like education and research, are not easily quantifiable. Productivity in education can be quantified using metrics such as the quality or value students receive relative to the cost of their education. These definitions enable an assessment of how changes in costs, quality, or quantities affect productivity in higher education. Productivity rises when student quality (academic performance, understanding, & achievements) improves more than the cost of education. Likewise, cutting costs while maintaining or enhancing student quality also boosts productivity. Yet, how do we calculate “quality”? This lack of guidance for measuring quality of this four-year educational institution has been linked to the common practice of student grades as the indicator of student quality (Ng et al., 2022)
Relying on a single measure for evaluating performance in the multifaceted higher education sector is inadequate. Using the proposed productivity measure, or any single performance metric, in isolation is insufficient for most purposes. While a productivity measure alone may not significantly enhance institutional performance, measuring higher education productivity overall could contribute to creating a better policy environment.
Why Can’t Students be Smarter?
This question needs to be addressed to all policy makers and those who run the administration. The objectives of a university should encompass various aspects, enhancing student quality, expanding access and diversity, attaining greater cost-effectiveness, better serving community needs, and advancing research. Although, university officials and state legislators may differ in their perspectives on the primary objectives of a university.
The sole objective of any institution of higher learning should be to enhance the quality of students, their knowledge, and skills gained through education. However, many faculty members struggle to achieve this goal. One reason is that teaching is often viewed as less important than publishing in academic journals and securing research funding. This correlates to the need for universities to boost their ranks and accreditations.
Productivity in higher education is a complex and nuanced issue, which is why policymakers and politicians often prioritize making higher education more affordable rather than more productive. But, the irony is, universities are raising their costs and there has been little to no improvement in student quality (William Poole, 2005)
