oyees, over the long term, would be more experienced. In the context of economic efficiency, as opposed to operational efficiency, however, the higher wages provided by public agencies more than offset the learning curve improvements provided through employee retention. The learning curve, also called the experience curve, traces, over time, the degree of skill developed from experience. There is evidence to support the contention that, as an organization grows in size and experience, it gets better at what it is doing and reduces costs and improves productivity.
The basic assumption upon which the learning curve concept is based is that total cost per unit will decline between 20 percent and 30 percent every time total production is doubled. Cost reductions related to the learning curve concept result from four separate but related factors: innovation and value engineering, which produces improvements in methods and procedures and which incorporates new technologies as they emerge; substitution, which involves the substitution of less costly materials as more experience in production is gained; economies of scale, which reduces cost through the allocation of fixed c
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