Education and Labour Productivity

NOREEN M. MORALES
EDAD 202 Dr. Joel Javiniar (Professor)

Productivity
-is commonly defined as a ratio of a volume measure of output to a measure of input use (OECD)
- is the rate of output per worker (or a group of workers) per unit of time as compared with an established standard or expected rate of output
(businessdictionary.org)

Productivity
Productivity is the ability to get things done in a timely manner. It presumes that action is taking place. It means so much more than dreaming, planning, or thinking. Productivity is the ability to quickly implement an idea into reality. The truth is nothing really happens until someone does something.
http://www.sophisticatededge.com/what-is-productivity.html

Productivity
=

Output ---------------Input

EDUCATION

Human Capital
Human capital is regarded at the macro level as a key factor of production in the economy-wide production function.
(Son, 2010)

Human Capital
At the micro level, human capital is considered the component of education that contributes to an individuals labor productivity and earnings while being an important component of firm production.
(Son, 2010)

EDUCATION PRODUCTIVITY

-More educated individuals tend to have higher employment rate and earnings and produce more output relative to those who are less educated.
http://www.adb.org/Documents/Produced-Under-TA/41040/41040-Human-Capital.pdf

EDUCATION PRODUCTIVITY

Policy makers in almost all countries agree on one thing: namely on the importance of education and skills to ensure future economic prosperity. Studies show that countries with higher levels of education and skill, have an average higher levels of productivity and economic growth.
(Machin and Vignoles, 2005)

EDUCATION PRODUCTIVITY
The increased productivity of educated workers may increase productivity of coworkers, and a rise in the general education of the labor force may increase the potential for innovations and adaptations leading to more long-term efficiencies in the workplace.
Mingat and Tan, 1996

The Philippine scenario

Summary of Tertiary Graduates by Discipline Group and Academic Year Employed Persons by Industry, Occupation, Class of worker, and Hours Worked Employed Persons by Sex, Age Group and Highest Grade Completed

The Philippine scenario

Household members are getting more educated in the Philippines. Over the period 1997-2003, the proportion of employed household members who have secondary and tertiary education has increased, while those who have acquired primary education has declined.
(Son, 2010)

If more and more Filipinos are getting educated, how come the economic growth of the country is not improving?

The Philippine scenario

This means that higher education matters for employment in the labor market, but the higher This means that higher education matters for employment educated labor force might be in the labor market, but the higher educated labor force might be takingtaking away the jobs thatthat were away the jobs were previously held by the less educated labor force, previously held by particularly the less in the service sector which has contributed to declining labor productivity in the country. educated labor force, particularly in the service sector which has
(Son, 2008)

contributed to declining labor productivity in the country.

(Son, 2008)

The Philippine scenario

There is evidence that with the rising education levels of labor force, college graduates have increasingly taken on low-skilled work such as driving taxis, jeepneys, buses, and motorized tricycles in the Philippines (ADO 2007). It appears that a large proportion of the highly educated workers are employed in jobs that do not match their

educational attainments, hence, there is a mismatch between the labor market and the educational sector.

EDUCATION PRODUCTIVITY

Casual comparative observations in a number of developing economies confirm this statement: improvements in the educational attainment of the labor force DO NOT always have a positive impact on the rate of growth of output per worker.
(Pritchett, 1996)

EDUCATION PRODUCTIVITY

Signaling theory (Spence), hypothesizes that individuals acquire education merely to signal to potential employers that they have superior productivity, albeit education itself does not necessarily enhance productivity.

FACTORS CAUSING LOW PRODUCTIVITY

Competence

Productivity Standards Work Process Team Management

FACTORS CAUSING LOW PRODUCTIVITY

Techniques

Tools and Maintenance

Salary
Individual attitudinal, motivational, and behavioral factors
(www.teambuildinginc.com/tps/005.htm, OECD Manual: Measuring Productivity; Measurement of Aggregate and Industry-Level Productivity Growth, 2002)

How to Increase Productivity in the Workplace

Time Management Skills

Productivity Checklist Organize the work area

How to Increase Productivity in the Workplace

Short cuts

Reward your employees

Get rid of time wasters

Review training methods

Thank you!

References
1.
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Asian Development Outlook. (2007). Change Amid Growth, Asian Development Bank, Manila. http://www.adb.org/Documents/Produced-Under-TA/41040/41040-Human-Capital.pdf http://businessdictionary.org http://www.dole.gov.ph/ http://www.nso.gov.ph/ http://www.oecd.org http://www.sophisticatededge.com/what-is-productivity.html http://www.teambuildinginc.com/tps/005.htm Machin, S. and A. Vignoles. (2005). Whats the Good of Education?: The Economics of Education in the UK, Princeton University Press: Princeton and Oxford. Mingat, A. and Tan, J. (1996). The Full Social Returns to Education: Estimates Based on Countries Economic Growth Performance. Human Capital Development Working Paper No. 73, The World Bank, Washington D.C. OECD Manual: Measuring Productivity; Measurement of Aggregate and Industry-Level Productivity Growth, 2002 Pritchett, L. (1996). Where has all the education gone? World Bank Working Paper No. 581, The World Bank, Washington D.C. Son, H. 2008. Explaining Growth and Inequality in factor Income: The Philippine Case. ADB Economics Working Paper Series No. 227, Economics and Research Department, Asian Development Bank, Manila. _________ 2010. Human Capital Development. ADB Economics Working Paper Series No.225, Economics and Research Department, Asian Development Bank, Manila Spence, M. (1973). Job Market Signalling, Quarterly Journal of Economics, 87, pp. 355- 374.

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