The assertion that productivity is declining in education, economists' work on educational production functions, and definitions of efficiency and productivity are discussed in three reports on the economics of education. The measurement and aggregation problems in the determination of productivity changes in education are explained, and three productivity studies are described. Productivity declines are attributed to the lack of incentive for efficiency improvement in public schools and the fact that education is intrinsically high in labor intensity but low in capital. A report on the literature on educational production functions describes micro-level functions as the learning of relatively simple items, meso-level functions as simple regressions involving student achievement test scores and back ground variables, and macro-level functions as simulation models which project the number of enrollees, graduates, and dropouts as a function of budget levels, dropout rates, and repetition rates. Relevant articles listed for each level of production, and research directions based on level boundaries and described. In an evaluation of the efficiency and productivity of educational systems, production possibilities, economic efficiency, technical efficiency, and efficiency in the absence of output prices are defined. Cost-benefit and cost-effectiveness analyses are described as a means for determining how gain and optimal levels of inputs and outputs vary with price.