Does school spending matter for child outcomes?

It seems it does, here is an excerpt from the conclusion of a new C. Kirabo Jackson paper on this question:

The recent quasi-experimental literature that relates school spending to student outcomes overwhelmingly support a causal relationship between increased school spending and student outcomes. All but one of the several multi-state studies find a strong link between spending and outcomes – indicating that money matters on average. Importantly, this is true across studies that use different data-sets, examine different time periods, rely on different sources of variation, and employ different statistical techniques. While one can poke holes in each individual study, the robustness of the patterns across a variety of settings is compelling evidence of a real positive causal relationship between increased school spending and student outcomes on average. However, an examination of single-state studies suggests that, on average, money matters, but that this is not always so in all settings or in all contexts.

And this:

To better understand why some studies find positive impacts while others do not, an examination of the few studies that are not positive is instructive. Three out of the seven papers that are not significant involve Title I spending, and three out of the seven involve capital spending. Given that 6 out of 7 of the studies that find no significant impact (86%) involve particular spending types may suggest that while overall budget increases may improve outcomes, increased funding tied to particular uses may not. In particular, the evidence is consistent with capital spending and Title I spending being less predictably effective than spending in general.

Here is an earlier and related paper on whether school spending cuts matter.


"Also, in a recent working paper Brunner et al. (2018) examine recent SFRs and explore impacts by union strength...They find that districts with strong teacher unions increased spending nearly dollar-for-dollar with state aid, and spent the funds primarily on teacher compensation. In contrast, districts with weak unions used aid primarily for property tax relief, and spent remaining funds on hiring new teachers. Importantly, they document that the greater expenditure increases in strong union districts led to larger increases in student achievement."

Or you must dump a lot of money on greedy, incompetent, inefficient school employees to produce better results. Screw the teachers' unions and the administrators.

I skimmed most of the paper and don't see anything convincing. Of course money will make some difference, but how much exactly? I mean, if the school culture is corrupted by teacher unions and the kids are being raised in single parent households with little interaction at home, no amount of funding will change the road these kids are on.

Really? "no amount of funding will change the road these kids are on"? The task may be much harder but some people are helped today and, at the margin, there are bound to be some interventions that help more. Besides, I'm pretty sure if you hired each of the students a suite of private tutors that you would see some changes in the outcomes :-)

"How much exactly?" Gee, I don't know. Exactly what is the rate of return a major corporation gets owned its advertising expenditures? I don't know the answer to that either, and neither do they. But the evidence suggest that they think it's a pretty good ROI. And exactly what's the basis for the comment about the educational culture being "corrupted" by teachers unions? Exactly what is the form of this corruption?

No! What matters is teacher competence and the administrations ability to allow the teachers to do what must be done for each student. Just as important is classroom conditions and control.

What the heck, dude... Are teachers supposed to work for free? You know that quality teachers don't want to work where they receive below - average compensation, can be fired for political reasons without union recourse, and constantly get assigned more job duties with less prep time? If they are good, they will go somewhere else where the pay and conditions are better, just like any other worker. And since the number one thing leading to better student outcomes is the quality of instruction, obviously paying teacher more will result in ... Hiring better teachers. Duh.

Camden NJ k-12 spends $29,455 per child each year. They must have some of the best schools in the world! Brilliant study comrade Jackson!

Or you could try contributing productively to the discussion.

"Camden NJ k-12 spends $29,455 per child each year." Goodness me; what might a decent private day-school cost in the US?

The private International school in my metro area runs about $22-27K per yr, depending on grade. I’d say that’s about as good a school as you will find. Lots of the tuition is paid by corporations with staff on assignment here.

Camden is literally the poorest city in America with a household median income of not much more than $18000 per year and one of the highest violent crime rates in the country. I don't know anything about the schools, but blaming corruption on low outcomes is disingenuous with those sociological problems. Put those kids all together in the same school in the next well managed suburb out of the city of Camden, and I guarantee you that their outcomes will not move up much.

That Camden's households are impecunious is not a problem. The problem is the domestic culture of the households in question, in re which one of the manifestations is a weak income stream.

Poorer than here?:

There is a big secret; a big lie in poverty statistics in the U.S. Usually when household income is calculated and provided as a statistic it does not include and income from welfare or any subsidies and free stuff. So while a typical family in this community may make under $15,000 a year they will spend $50k-$75k a year or it's equivalent. They are rich in welfare and subsidy money and free stuff. Not a bad life if you can find some suckers who will pay for it. And of course that is the reason for not reporting their actual/equivalent income because the suckers just might figure out that they are being suckered.

So while a typical family in this community may make under $15,000 a year they will spend $50k-$75k a year or it's equivalent. T

Only if they're collecting benefits under several aliases. Again, about 4 million people are enrolled in TANF, coast to coast. Section 8 vouchers have a similarly modest clientele. SNAP cards are quite prevalent, but the value of the benefit's around $300 a month. You do have large-scale expenditures on Medicaid. However, about 30% of the Medicaid budget is applied to nursing home placements and the like. Another large bloc treats grisly illnesses.

In the private school universe, there tends to be a positive correlation between tuition and student test scores. Of course, selection plays a major role. Still, it would be interesting to study private schools. For example, I'd like to know what experienced headmasters see as the tradeoffs.

I went to a very good private high school. Kids who came in super geniuses (you could spot them day 1 of math class) left super geniuses. Dumb kids admitted for athletic reasons left as dumb athletes. It's all selection.

So the tail ends of the distribution stayed the tail ends of the distribution? Shocking! Do you have any insight on what happened to the much larger group of kids in the middle?

They stayed in the middle.

I wonder how "outcomes" are defined ... the paper is behind a paywall.

This smells a bit like confirmation bias may play a part, along with publication bias.

For charter schools, and the New York Times had a sort of expose on this, you have a pattern of a series of filters to get rid of weaker students. The application process is open to anyone, but the parents of weaker students tend to not be as much on the ball in researching and keeping track of stuff like this. Once in students are subject to extreme rules regarding conduct and behavior, and weaker students tend more to run into problems here; they are taking out of class and hectored, and mom is called in for a meeting. Students who don't do well academically are taken out of class for special one-on-one remediation sessions that consist of more hectoring; mom is called into for meetings. Life if made unpleasant for slower students, and parents relent and let them go back to public schools. The final trick is that students are only admitted for lower grades, so by the time of graduation only the strong students remain. The same result could have been obtained more efficiently by allowing admission by standardized tests from the beginning.

Ungated version:


the evidence is consistent with capital spending and Title I spending being less predictably effective than spending in general.

So building giant, prison-like schools doesn't necessarily produce the leaders of tomorrow. And diverting federal funds to school districts with "poor" students doesn't mean that they'll be admitted to Harvard.

Like it matters anyway. If only there more money was getting to the kids, all of those crack babies would have IQs of 110!

A lot of the research I see referenced on this site seems downright worthless or common sense at best. Please someone give us a rationale for why so many papers by economists seem like a waste of time to the "uneducated". "Publish or perish" at what cost to taxpayers? I'm sure there is a reasonable answer.

It is obvious that spending is correlated with education quality at some level, but it is not obvious that different levels of spending within the realistic spending range found in the U.S. matter. And there is reason to think it might not (a lot of school spending seems visibly wasteful; there are vastly different spending levels within different regions of the U.S. without obviously corresponding variation in results; some of the highest spending areas are inner-city school districts with poor outcomes).

For example, it's obvious that spending $1000 per student will yield better results than spending $0 per student.

It's not obvious that spending $20,000 is better than spending $12,000. And this is the sort of question that is relevant to policy debates.

Utah is always an interesting data point in this discussion. They spend about $7000/yr, which is (per this data) the lowest in the country. But their results are IIRC among the best.

Culture matters more than funding above some minimum ($7K/yr?) level. If I had to put a kid in public school, I'd much rather choose the lesser funded Utah schools.

You have to adjust for demographics. Utah doesn't do that great when you consider that

"You have to adjust for demographics."

Oooh ...

Adjusted for demographics and spending, Utah seems to be 12th in efficiency and 38th in quality.

Probably your best examples, with the highest efficiency (so not spending much per student for the level of results) along with good quality results (At least top 20 in both) are Florida, Texas, Arizona, North Carolina, Colorado, Massachusetts, Maryland, and Washington.

When you take spending out as a "quality" measurement and adjust for demographics, the story told by this original article looks pretty silly.

Why'd you omit Virginia from your list?

With government spending the null hypothesis is no effect. Studies that show otherwise are interesting and worthy of investigation.

and Tyler's post is messing with my priors.

Funding of public schools has to be considered in the context of a declining percentage of white students. The racial/ethnic distribution of students in public schools has been shifting for years: the percentage has been declining for both white and black students and rising, and rising significantly, for Hispanic students. In 2003, the percentage of students who were white was 59%, in 2013 the percentage fell to 50%, and in 2025 the percentage is projected to fall to 46%. The corresponding percentages for black students are 17%, 16%, and 15%, while for Hispanic students the corresponding percentages are 19%, 25%, and 29%. Not surprisingly, the race/ethnicity distribution of students attending private schools reflects the predominance of white students: about 70% of students attending a private school are white, as compared to about 50% attending public schools. These trends are likely to continue. What does this mean for public school funding? In many states, it means the battleground will be between funding for public schools and funding for "school choice" (vouchers and other controversial methods for shifting state funding to private schools).

You're getting warm.

Public schools should be improving every year then, since “diversity is our strength”. Right?

Right- some people want minorities to have access to the same schools whites do. Others want to lock them in to protect teachers' unions.

TC's post confuses me. He seems to think (say it ain't so) that higher spending is the same as increased spending. Here's a clue: one is about the value the other is about the change in value with time. If A>B no conclusion about dA/dt vs. dB/dt can be made. And vice versa. But we all know this, right? So, which is it? Does "increased" spending matter or is it "higher" spending?

Not a terribly surprising outcome. The follow up question:

1. Is the increment of improvement large and reliable enough to make the additional spending worth it?

2. What sort of performance improvements are to be had without spending increases. (E.g. more specialized and less haphazardly ordered curricula, sequestering incorrigibles)?


OK Tyler, help me out here: the Department of Education rates the effectiveness of state public education systems adjusted for race and ethnicity. When it does so, two of the lowest spending states (FL and TX) are ranked 3rd and 4th in the nation for achievement test scores. Indeed CA which spends say 15 or 20% more than TX is ranked 47th. The Urban institute goes a step further, taking the National Assessment of Educational Progress Data and adjusting it for key factors that influence educational attainment (age, ethnicity, english language proficiency, etc). It shows that states like FL, TX, MS, NM, LA, GA - states that spend far less than average achieve much higher than expected results given their student populations. Conversely states like UT and NH achieve terrible results relative to these factors. And then there is NY which spends twice as much per pupil as TX yet gets far less benefit for all it's spending. Judging from your post this is a wildly different story than academic economists tell. But with the replication plague roaring stronger than ever and ideological confirmation bias a giant monster stalking every campus, I'm not surprised that the socially acceptable conclusion dominates.

UI's Configurable Data Display is here:


How do you square this circle?

If you can read this, you most likely went to a Government School (scary!) that achieved that much.

Of course, later in life you might gain some cognitive dissonance, thinking at the same time that it is all wasted expense.

"What did Government Schools (shiver!) ever do for you!"

Before public education, nobody could read.

Many fewer, certainly.

Interestingly, if you put a bunch of kids in a school with books and let them do whatever they want, they all learn to read. No teachers required.

Yes, and without government grocery stores, everyone starves to death. There's no way we could leave something that important, a matter of life and death, to the whim's of the market. Imagine the horrors which would result compared to having government grocery stores providing everyone with free food!

I live in Florida and one confounding factor in Florida is that many Hispanics that came here are from the top of Latin societies. Of course that leaves Texas.

The typical effect seems to be something like a 10% increase in spending increases test scores by .07 standard deviations. Thats not nothing, but its small enough that its easily overwhelmed by other factors. There is likely to be a big file drawer effect here as well. I can tell you personally that people in this field are generally happier if the results go in the correct direction.
My prior was a tight distribution around zero effect on spending in the typical U.S. range , and this shifts that slightly up for non Title I and infrastructure spending.
The difficulty with all the papers is they are mostly examining details of school finance formulas but can't take into account other polices that are changing at the same time, or unobserved changes in demographic mixes.
This really needs a full bayesian analysis.

Since econ and social science journals do not provide incentives for studies with negative findings and are generally harder on them when trying to publish in leading journals, I would not take the positive findings as robust evidence of an effect but as no more than an existence proof that there are certain configurations under which spending MAY matter.

Internationally the OECD reports that differences in spending per student are not correlated with PISA scores. The OECD also offers the apparently not too obvious observation that it matters what the money is being spent on.

"The strongest performers among high-income countries and economies tend to invest more in teachers. For example, lower secondary teachers in Korea and the partner economy Hong Kong-China, two high-performing systems in the PISA reading tests, earn more than twice the per capita GDP in their respective countries. In general, the countries that perform well in PISA attract the best students into the teaching profession by offering them higher salaries and greater professional status. This relationship between performance and teachers’ salaries does not hold among less wealthy countries and economies, however. In all PISA-participating countries and economies, school systems that invest in higher teachers’ salaries tend to have larger classes. At the country level, PISA finds that the size of the class is unrelated to the school system’s overall performance; in other
words, high-performing countries tend to prioritise investment in teachers over smaller classes."

So in other words there is no hope for the US. Education degree programs attract the dullest of the dull.

It would be interesting to see the C. Kirabo Jackson paper reconciled with this analyses:

yes i also think that spending a lot of time in school will increase positive outcome of a student . Because a student can increases his /her knowledge, networking & other activities by passing his/her quality time in school.

Online education is becoming popular and in future children will stay at home more than go to school.

Comments for this post are closed