Abstract
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This research paper constructs two experimental measures of the economic output of the education sector for Canada: an income-based measure and a cost-based measure. The measures differ from the existing measure currently used in the National Accounts, which is based on the volume of total input, and can be used to examine the productivity performance of the education sector. Both approaches are predicated on the notion that the output of the education sector represents investment in human capital. The income-based approach measures investment in education as increments in the future stream of earnings arising from education. The cost-based approach measures investment as total expenditures related to education. The paper finds that the two approaches yield similar estimates of the growth in real education output, but produce very different estimates of the level of education output. The paper also proposes and implements a hedonic approach in order to capture the quality of the output of the education sector.
More studies related to National Economic Accounts and macro-economy and productivity are available in Update on Economic analysis.
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