1. Proposed New Education Measure for Scottish GVA Series Richard Murray

2. Structure of Presentation Section 1: Background – Specific Recommendations from Atkinson Review – Current Measure of Education Output Section 2: New Quality-adjusted Output Measure Section 3: Concluding Remarks

3. Specific Recommendations from Atkinson Review for Education Improve the measurement of inputs Move towards an output based-approach Develop measures which track changes in quality Extend coverage across whole of UK

4. Current Measure of Education Output Different methodology for measuring education in Scottish & UK GDP series Scottish GDP based on input=output approach using employment data UK measure based on pupil numbers adjusted by GCSE performance

5. Section 2: New Quality-adjusted Output Measure for Education

6. Quantity & Quality Dimension of Output Quantity of output to be measured by the number of pupils attending school Quality dimension to reflect changes in the quality of education received by pupils

7. 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

8. Possible Attainment-based Approaches Threshold basis Average Points Scored Value-added approach Combined threshold approach

9. Combined Threshold Approach 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 Category 1Highers & Advanced Highers Category 2Standard Grades (Credit level) Category 3Standard Grades (General & Foundation level)

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 & apply to all pupils 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 for Scottish Education System

15. Current Measure Vs Proposed New Measure

16. Overall Impact on GVA Series

17. 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

18. Section 3: Concluding Remarks

19. 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

20. Other Possible Quality Measures

21. Alternative Combined Quality Indices