This paper discusses several concepts and techniques from the areas of systems theory and economic analysis that can be used as tools in an effort to improve the productivity of the educational enterprise. Several studies investigating productivity in education are reviewed, and the analytical problems in conducting cost-effectiveness studies are explored. The paper points out the potential pitfalls in identifying, measuring, and comparing program costs, and addresses the difficulties inherent in assessing program outcomes. Several conceptual models designed for conducting cost-effectiveness studies in education are discussed and the results of a number of empirical investigations employing cost-effectiveness techniques are presented. The conceptual framework developed here views the education production process as a system consisting of four major components--system environment and controls, the school, outputs of schooling, and feedback. (Author/IRT)