Proposed New Education Measure for Scottish GVA Series

Richard Murray

Structure of Presentation

Section 1: Background– Specific Recommendations from Atkinson Review– Current Measure of Education Output

Section 2: New Quality-adjusted Output Measure

Section 3: Concluding Remarks

Specific Recommendations from Atkinson Review for Education

Improve the measurement of inputs Move towards an output based-approach Develop measures which track changes in

quality Extend coverage across whole of UK

Current Measure of Education Output

Different methodology for measuring education in Scottish & UK GDP series

Scottish GDP based on input=output approach using employment data

UK measure based on pupil numbers adjusted by GCSE performance

Section 2: New Quality-adjusted Output Measure for Education

Quantity & Quality Dimension of Output

Quantity of output to be measured by the number of pupils attending school

Quality dimension to reflect changes in the quality of education received by pupils

Rationale for Adjusting for Quality

Why adjust for quality?– To capture improvements in the education pupils

receive

How do you measure quality?– Ideally, the quality of teaching pupils receive– Difficult to measure this, though attainment

provides a useful proxy

Possible Attainment-based Approaches

Threshold basis Average Points Scored Value-added approach Combined threshold approach

Combined Threshold Approach

Aim to capture wide spectrum of attainment a pupil receives by end of secondary education

3 categories which capture all levels of attainment at school

Category 1 Highers & Advanced Highers

Category 2 Standard Grades (Credit level)

Category 3 Standard Grades (General & Foundation level)

Proportion of Pupils Gaining Qualifications

0

10

20

30

40

50

60

1999 2000 2001 2002 2003 2004 2005 2006

Category 1 Category 2 Category 3

Weighting the Different Levels of Attainment

Each category of attainment needs to be given a weight, relative to its contribution to total output

Inappropriate to use cost weights Expected future earnings provides a proxy

for the benefit pupils receive from education

Expected Future Earnings by Highest Qualification

Results show that higher qualifications lead to higher expected future earnings

Weightings of 48: 32: 20 for Categories 1: 2: 3

Expected future earnings =

Average earnings by highest qualification

Employment rate by highest qualification

X

Quality-adjusted Output Index

Methodology

Step 1: Differentiate S6 pupils by attainment & apply to all

pupils

Step 2: Apply a weight (based on expected future earnings) to

the attainment categories

Step 3: Calculate the weighted total & convert to index

Quality-adjusted Output for Scottish Education System

94

95

96

97

98

99

100

101

102

103

1999 2000 2001 2002 2003 2004 2005 2006

Quality Quantity Quality-adjusted Output

Current Measure Vs Proposed New Measure

Comparison of existing and new education measures

85.0

90.0

95.0

100.0

105.0

110.0

1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Ind

ex (

2003=100)

New measure

Existing measure

Overall Impact on GVA Series

Effect of new education measure upon total GVA

80

85

90

95

100

105

110

1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Ind

ex (

2003

=100

)

New measure

Existing measure

Sensitivity Analysis

Examined different combinations of qualifications

Applied different weights by attributing part of the future earnings associated with those who go on to university

Overall, little impact on quality-adjusted output index

Section 3: Concluding Remarks

Limitations of New Measure

Unable to track changes in quality across each year group

Will take a number of years before investment influences the measure

Wider benefits of education are excluded Possibly not giving enough weight to high

attainment category

Other Possible Quality Measures

Alternative Methods for Measuring Quality

80

85

90

95

100

105

110

1999 2000 2001 2002 2003 2004 2005 2006

1 or more Highers at end of S6 Standard Grades (1-2) at end of S4APS at end of S4 APS at end of S6Combined Threshold Approach

Alternative Combined Quality Indices

Other Possible Combined Quality Indices

95

96

97

98

99

100

101

102

103

1997 1998 1999 2000 2001 2002 2003 2004

Year

Scenario 1 Scenario 2 Scenario 3 Scenario 4