The Efficiency of Education in Generating Literacy: A Stochastic Frontier Approach

The growing importance attached to education as a key factor to improve economic performance coupled with the persistent scarcity of resources for education makes it important that skills and literacy are produced efficiently. This paper provides an international comparison of the efficiency of literacy production. We find substantial differences between countries in levels of literacy, differences in literacy between education levels and differences in the efficiency of literacy production. The findings suggest that in almost all countries the scope for efficiency improvements in education is large. So even without major increases in (public) funding, improvements in educational outcomes are achievable. We can get better value for the money we spend on education.