LETTERS OF TRANSMITTAL

NOVEMBER 6, 1959.

To Members of the Joint Economic Committee:

Submitted herewith for the consideration of the members of the Joint Economic Committee and others are study papers 4 and 5, "Analysis of the Rising Costs of Public Education" and "Trends in the Supply and Demand of Medical Care."

These are among the number of subjects which the Joint Economic Committee has requested individual scholars to examine and report on to provide factual and analytic materials for consideration in the preparation of the staff and committee reports for the "Study of Employment, Growth, and Price Levels."

The papers are being printed and distributed not only for the use of the committee members but also to obtain the review and comment of other experts during the committee's consideration of the materials. The findings are entirely those of the authors, and the committee and the committee staff indicate neither approval nor disapproval by this publication.

PAUL H. DOUGLAS, Chairman, Joint Economic Committee.

NOVEMBER 3, 1959.

Hon. PAUL H. DOUGLAS,

Chairman, Joint Economic Committee,

U.S. Senate, Washington, D.C.

DEAR SENATOR DOUGLAS: Transmitted herewith are the fourth and fifth in a series of papers being prepared for the "Study of Employment, Growth, and Price Levels" by outside consultants and members of the staff. The authors of these papers are Werner Z. Hirsch, Washington University, St. Louis, Mo., and Markley Roberts, American University, Washington, D.C.

All papers are presented as prepared by the authors, for consideration and comment by the committee and staff.

OTTO ECKSTEIN,
Technical Director,

Study of Employment, Growth, and Price Levels.

CONTENTS

STUDY PAPER NO. 4, "ANALYSIS OF THE RISING COSTS

OF PUBLIC EDUCATION," BY WERNER Z. HIRSCH

Introduction-Statement of findings..

Chapter 1. General summary-

Introduction..........

State and local government sector.

Costs of public education...

Teachers' salaries-the overwhelming cost factor.

Ability to afford education-income elasticity.

The near term prospect.

Some implications--

Chapter 2. The State and local government sector_.

Introduction_.

Nature of data_

An overview..

Functional breakdown..

Current versus capital expenditures..

Cost comparisons in constant dollars_

Chapter 3. The public primary and secondary education sector.

Introduction_.

Nature of data....

Factors affecting expenditure level..

Number of pupils in average daily attendance___

Sociological characteristics of population..

Age structure_

Geographical distribution_

Economic characteristics__.

Price level of goods and services bought by schools.

Income level___

Physical characteristics..

Productivity of school system.

Governmental characteristics___

Variety, scope, and quality of education.......

Addition or deletion of services...

Scope of services_

Quality of services_.

Test of hypothesis..

Education cost in constant terms.

Income elasticity of public education.

The 1960 and 1965 outlook..

Appendix-Economies of scale_

CHARTS

Chart 1. Total current expenditures (plus debt service) for public primary

and secondary education, selected years, 1900-1958--

Chart 2. Current expenditures (plus debt service) for public primary and

secondary education minus expenditures, for auxiliary services, selected

years, 1900-1958___

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TABLES

Table 1. State and local government expenditures, selected years, 1902-58-

Table 2. General expenditures of State and local government by function,

selected years, 1902–58_.

8

10

Table 3. Percent of general expenditures by service function---

Table 4. Current general expenditures of State and local government by

function_..

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12

Table 5. Capital outlay general expenditure of State and local govern-

ment by function___

Table 6. State and local government purchases of goods and services in

current and constant (1954=100) dollars, 1929-57-..

Table 7. Pupils in average daily attendance (ADA), selected years, 1900-

1958___

Table 8. Public high school relative to total public enrollment, selected

years, 1900-1958

Table 9. Urbanization of school population, selected years, 1900-1958---

Table 10. Average annual salaries of public school teachers, selected years,

1900-1958_.

Table 11. Per capita personal income, selected years, 1900-1958-

Table 12. Auxiliary school service expenditures, selected years, 1900-1958_

Table 13. Length of school term, selected years, 1900-1958-

Table 14. Total number of principals, superintendents, and consultants

per 1,000 pupils in average daily attendance in public primary and sec-

ondary schools, selected years, 1900-1958__.

Table 15. Total current expenditures (plus debt service) for public pri-

mary and secondary education, selected years, 1900-1958_...

Table 16. Total current expenditure (plus debt service) for public pri-

mary and secondary education minus auxiliary services, selected years,

1900-1958-

Table 17. Income elasticities of select local public services, St. Louis

city-county area, 1951-52 and 1954–55..

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STUDY PAPER NO. 5, "TRENDS IN THE SUPPLY AND

DEMAND OF MEDICAL CARE," BY MARKLEY ROBERTS