Abstract:

Education is one of the most important services provided by governments in almost every country and a widespread literature recognizes various education- related determinants of economic growth focusing on the role played by human capital. The growing importance attached to the quality of education, as a key factor to improve economic performance, and the huge amount of resources allocated to it have been since long at the centre of public debate.
The educational process is a very complex and critical service which involves material and non-material goods, such as class rooms, computers, laboratories, qualification and experience of teachers, etc. This process can be viewed as a production process, whose analysis can be effectively performed in the framework of the neoclassical production theory. Consequently, the schools can be seen as organizations that employ inputs (schools’ resources, organizational factors, etc.) to produce an output (the students’ achievement) and the efficiency of a school can be defined as the capacity to generate the maximum output given the quantity of inputs they use. In this perspective, using the data from the Programme for International Student Assessment (PISA 2006), we try to model the educational process by a stochastic educational production function, controlling for differences in various school, and country characteristics that may influence student achievement.
The Stochastic frontier analysis (SFA) is more demanding in terms of assumptions than some non parametric techniques like the Data Envelopment Analysis (DEA) and the Free Disposable Hull (FDH), since it requires the specification of a functional form for the production function, but it is less sensitive to the presence of outliers and allows the possibility of making inference about the contribution of each inputs.
This paper has several aims, firstly, it examines how well education systems of the OECD countries are able to produce literacy, as a measure of human capital, among their population. Secondly, we try to estimate how the school accountability and autonomy are related to student achievement across countries. Finally, the role played by the factors which are outside the decision making power of schools, called environmental or non discretionary input is analyzed. Indeed, one of the main assumptions underlying frontier analysis and technical efficiency measures is that all the units share the same production technology and face similar environmental conditions. In the framework of the educational process, this hypothesis is rather unrealistic because factors such as the socio economic context, the family educational level and other environmental variables affect on the performance measures. Consequently, we investigate the determinants and the degree of school efficiency, in a cross country analysis, modelling the environmental factors as variables which directly influence the inefficient term.
The results highlight the role of school accountability on the student achievement and how the contextual factors may influence the efficiency levels.

Keywords:

Economics of education, Stochastic frontier, technical efficiency, PISA data.