"The Foundation and Theoretical Advances of the Education Production Function from 1960s to the Present "

Abstract

Since its advent in the 1960s, the education production function (EPF) has been a fundamental concept in the economics of education, drawing from the broader framework of production functions in economics. EPF shows the relationship between educational inputs—such as teacher quality, school resources, and student characteristics—and outputs, often measured in terms of academic achievement including non-cognitive skills, and future labour market success. Early models of EPF highlighted primarily on tangible inputs like class size and teacher credentials, but later iterations covered a wider range of variables, such as family background, student motivation, and the institutional context of schooling. The concept has undergone significant theoretical developments, incorporating elements from microeconomic theory, human capital theory, more advanced econometric and statistical methods, including various socio-economic, institutional, and policy-driven factors. This paper provides an extensive review of theoretical development from the 1960s to the present, focusing on how different educational inputs are modeled, the evolution of empirical techniques, and the influence of policy and institutional factors in diverse educational settings. This review also aims to provide a comprehensive understanding of theoretical contributions and empirical findings over these decades, highlighting key theoretical developments and its implications for education policy and practice, and future directions for research.