A Theory-Based Measure of the Output of the Education Sector

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A Theory-Based Measure of the Output of the Education Sector

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Astrid Oline Ervik, Erling Holmøy and Torbjørn Hægeland () (Statistics Norway)

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Abstract

The paper estimates the output of the Norwegian higher education sector based on a modification of the methodology introduced by Jorgenson and Fraumeni (JF) (1989). JF measure output in the education sector by the increase in the total discounted lifetime income that can be attributed to the education “produced” in a given year. As opposed to JF, our output measure excludes the value of non-market labour activities. We provide a theoretical rationale for this modification of the JF-methodology, which has a great negative impact on the output estimates. Our baseline estimate of value added in the Norwegian higher education sector is still more than 8 times higher than the corresponding figure in the Norwegian National Accounts (NA). Replacing the standard NA figures by our estimate raises the share of higher education in GDP from 1.0 to 7.3 percent.

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Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 353.

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Date of creation: Jul 2003
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Handle: RePEc:ssb:dispap:353

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Find related papers by JEL classification:
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

This paper has been announced in the following NEP Reports:

NEP-EDU-2003-09-14 (Education)
NEP-LAB-2003-09-14 (Labour Economics)

References listed on IDEAS
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Jorgenson, D.W. & Fraumeni, B.M., 1991. "The Output Of The Education Sector," Harvard Institute of Economic Research Working Papers 1543, Harvard - Institute of Economic Research.
Other versions:
- Dale W. Jorgenson & Barbara M. Fraumeni, 1992. "The Output of the Education Sector," NBER Chapters, in: Output Measurement in the Service Sectors, pages 303-341 National Bureau of Economic Research, Inc. [Downloadable!]
Ahlroth, Sofia & Bjorklund, Anders & Forslund, Anders, 1997. "The Output of the Swedish Education Sector," Review of Income and Wealth, Blackwell Publishing, vol. 43(1), pages 89-104, March.
Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier. [Downloadable!] (restricted)

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