The Paradox of Increasing Efficiency Yet Becoming More Inefficient

Introducing an innovation to increase efficiency ending up with more inefficiency is a paradox. Most obviously, it occurs in transportation: fuel efficient cars that get more miles per gallon of gas than before end up multiplying demand for more such vehicles putting more cars on roads spouting gases into the air*.

Are there jobs in which there are few gains in productivity–that is, workers produce more at less cost–yet wages of these “unproductive” workers rise over time? Readers of this blog know that I will answer “yes” to the rhetorical question.

Think of a string quartet playing to a live audience 300 years ago. The number of musicians and the time they needed to play a Beethoven sonata in the late 18th century haven’t changed, yet today’s quartets playing the same sonata in the same amount of time make far more than those four musicians centuries ago. Why is that?

Economists William Baumol and William Bowen used that example in their 1966 article to make the point that in certain people-dependent, service-driven, labor-intensive occupations such as the arts, health care, and education there are few productivity increases (e.g., musicians are not paid to play Beethoven sonatas faster nor are teachers paid more to teach history faster). Traditionally, factory and business employers raise wages for workers as a result of new technologies and managerial techniques that increase employee productivity–making and selling more products at less cost than before. Higher wages usually follow gains in worker productivity.

No so for labor-intensive work. The technology used to play for live audiences, teach students, and care for patients leaves hardly any room for labor-saving innovations to increase efficiency since the product is actually the labor of the musician, teacher, and care-giver. But to retain experienced, talented, and hard-working artists, teachers, and health care workers and to keep them playing, teaching, and taking care of the elderly and ill, salaries go up over time. This paradox of efficiency is called “Baumol’s Cost Disease.”

In applying Baumol’s Cost Disease to education, additional paradoxes of efficiency turn up, for example, around class size and applying technologies to teaching and learning.

Class size

A most common move to increase efficiency of teaching in both K-12 and higher education is to make classes larger–one way of skirting “Baumol’s Cost Disease.” As one researcher in the late-1920s put it: Larger classes make for fewer teachers and lower building costs. Increasing the size of classes, then, offers an obvious and tempting means to immediate educational economy.

How large or small class size should be–without losing “effectiveness” however measured–has continually been contested. Researchers at all levels of schooling have done comparison studies since the early 20th century (see here here, here, and here) to determine exactly what class size is both efficient and effective. Research findings in the early 21st century remain contested for the simple reason that while the costs of providing teachers in classrooms drops as a district increases class size, questions of teacher effectiveness in achieving desired student outcomes arise time and again (see here and here).

Historically, class sizes in urban schools in the early 20th century ran to 50-plus students and have fallen each decade until they range in the 20s to 30s.  In most K-12 instances, both parents and teachers sought smaller class size, often to sizes below 20 students per class because they believed that smaller classes would give teachers time to build relationships with students, work with individuals, and boost students’ academic outcomes. As class sizes dropped, costs for hiring additional teachers and finding space for those smaller classes rose. And that is the paradox of efficiency that policymakers have found themselves in repeatedly when it comes to class size.

Another bind in which policymakers find themselves is not knowing what the exact number of students per class is best insofar as measures of academic achievement. A tradeoff between efficiency and effectiveness continues to plague policymakers although most practitioners and parents urge smaller class size than now exists.

In higher education, increasing institutional efficiency in the face of rising tuition costs and low faculty teaching loads was to have more lectures for hundreds of students in first two years of college and reserve seminars for 15-25 students in the final years of an undergraduate’s career and graduate school. And now to increase efficiency, offering  online courses is believed to reduce costs and provide access to professors.

Increasing class size through scheduling large lectures in introductory courses, reserving seminars for advanced students and increasing online instruction–are efficiency measures that often end up in students frustrated in having little contact with professors, questioning the effectiveness of larger classes and online learning while turning off students to the course content they seek to learn. So decreasing or increasing class size in both K-12 schools and higher education lead to greater inefficiencies.

New technologies

And, of course, there is increased use of new technologies, the all-purpose solution to inefficiency.  There is little doubt, even among skeptics, that computerization of the administrative side of schooling–personnel actions, budgeting, purchasing, and collecting student data–have been streamlined and desks piled high with records and folders have decreased yet the numbers of administrators both in K-12 schools and in higher education have increased. Similarly, on the curricular and instructional side of schooling, the paradox of efficiency has become apparent. Examples abound.

Online courses in K-12 and higher education have been touted as being cost-efficient and cost-effective for decades—especially during closure of schools during the recent pandemic of 2020-2022. But proliferation of such courses have raised questions among current and prospective students if that kind of instruction and teacher contact is worthwhile and efficient. The belly-flop of Massive Open Online Courses (MOOCs) a decade ago with its high attrition among students have added to those doubts as has the continuing spread of online classes and numbers of students who fail to complete courses. Technologically induced efficiency may well lead to larger inefficiencies in dropouts and frustrated teachers and students.

✠With standardized tests now largely online, districts have spent additional funds beyond buying devices and new software (and maintaining both before they sink into obsolescence).   Dollars are spent to train students and teachers to use online tests (see here and here).

✠“Personalized learning,” the Holy Grail of efficient teaching, that is each lesson is tailored to the strengths and weaknesses of each student has been the dream of school reformers for decades. With the flow of tablets, laptops, and phones into schools for instructional use, the day of efficiency has seemingly dawned.

In the quest to make teaching faster and better, a wealth of technological devices and software have been mobilized and put into classrooms. In the name of efficiency and effectiveness, current students have far more access to technologies than students 40 years ago when they were initially introduced. Although test scores and other measures of academic achievement have only marginally improved, the gap between low-income and upper-middle class white and minority students remains pretty much the same as it has been decades ago.

Moreover, the same gap in scores on the National Assessment of Educational Progress or Nation’s Report Card can be seen in the recent drop in fourth and eighth grade student scores in reading and math. Those results, of course, are in part due to school closures from the Covid-19 pandemic. But the racial and ethnic gap in students’ test scores remain similar to what that gap was in recent decades.

Thus, schooling over the past few decades reaffirm another instance of seeking efficient teaching and learning leading to inefficiency.


*Some readers may point to the jump in sales of electric vehicles over the past decade eventually leading to gasoline-powered cars fading away. Perhaps. Currently, 99 percent of all American cars use gasoline.


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  1. Pingback: This Week’s “Round-Up” Of Useful Posts & Articles On Ed Policy Issues - Best Of Daily News

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