Quality-adjusted Output Measure for the Scottish Education System

1. Quality-adjusted Output Measure for the Scottish Education System Richard Murray Economic Adviser Scottish Executive

2. Structure of Presentation • Section 1: Background • Structure of the Scottish Education System • Context for the work • Section 2: Quality-adjusted Output Index • Section 3: Concluding Remarks • Limitations of the New Measure • Summary

3. Section 1: Background

4. Structure of Scottish Education System • Different education system in Scotland compared with the rest of the UK • Primary education: • 7 years of education (P1 to P7) • 2,184 schools & 382,783 pupils • Secondary education: • 6 years of education (S1 to S6) • Compulsory to S4 • 381 schools & 312,979 pupils

5. Structure of Scottish Education System • Comprehensive system • Examinations sat in final three years of secondary education (S4, S5 & S6) • No national testing before S4

6. Context to this Work • Atkinson Review • Specific recommendations for education • Improve the way we record inputs • Move towards an output-based approach • Develop measures to track changes in quality of output • Extend coverage across whole of UK

7. Section 2: Quality-adjusted Output Index for Education

8. 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

9. Differentiating Output by Attainment • 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

10. Proportion of Pupils Gaining Qualifications

11. 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

12. 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

13. Quality-adjusted Output Index Methodology Step 1: Differentiate S6 pupils by attainment Step 2: Apply a weight (based on expected future earnings) to the attainment categories Step 3: Calculate the weighted total & convert to index

14. Quality-adjusted Output Index for Final Year of Secondary Education

15. Quality-adjusted Output for Education • Only measures the output of one year group (i.e. S6) • Apply the differentiated output across all pupils in primary & secondary education • This assumes quality will be the same for each year group

16. Quality-adjusted Output for Scottish Education System

17. What is driving the New Quality Adjusted Output Index?

18. Pupils Gaining No Qualifications • Believe this group should not have a positive impact on the quality dimension of output • Still captured in the quantity dimension of the quality-adjusted output

19. 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

20. Section 3: Concluding Remarks

21. 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

22. Summary • New Quality-adjusted output measure for Scottish Education system • Output is differentiated by attainment and weighted by expected future earnings • Output index has declined in recent years, driven by fall in pupil numbers