This description of a methodology for examining the supply of educated manpower and the demand for their services consists of two major sections, which are devoted to the supply and demand of educated manpower respectively. In the first section, the supply of educated manpower and the demand for educational inputs are considered, the main discussion centering on production of educated manpower. In an illustration of the suggested approach, "educated manpower" is defined as the persons who attain a certain reading ability at a given educational level; and the "production function" is the production function of reading ability. Based on an empirically estimated production function of reading ability for U.S. public schools, the author examines whether the "teachers-don't- count" hypothesis can be accepted and indicates how questions as to whether U.S. public schools operate efficiently can be answered. In the second section the demand for educated manpower and the supply of other goods and services are considered based on the production functions of various industries requiring educated manpower. (Only the aggregate production function, using income or earning data as a measure of output, are examined.) The last section considers some of the implications and limitations of the study.