The decline of schooling productivity in OECD countries

Based on Baumol’s cost-disease model, we develop two alternativemeasures of the change in the productivity of schooling. Bothproductivity measures are based on changes in the relative price ofschooling. We find that in most OECD countries the price of schoolinghas increased faster in 1970-94 than would be compatible with constantschooling productivity. In addition, we show that the averageperformance of pupils has remained constant at best in most OECDcountries. Our results imply a larger decline in the productivity ofschooling in many OECD countries than in the United States.