Spending more on schools improves high school graduation rates and adult earnings and family stability, concludes a new study published in Education Next.
When per pupil spending increases by 10 percent in all 12 school-age years, students from low-income families complete an extra half year of education and their probability of high graduation increases by 10 percentage points, according to C. Kirabo Jackson, Rucker C. Johnson, and Claudia Persico.
As adults, they earn 10 percent more per hour. They’re 10 percent more likely to marry and stay married; future family income increases by 17.1 percent and the likelihood of poverty decreases.
Spending increases also benefit students from non-poor families, but the effect is much smaller.
A 22 percent increase in per-pupil spending throughout all 12 school-age years could eliminate the education gap between poor and non-poor children, the authors estimate. That would mean increasing spending from $12,600 per pupil (the 2012 average) by $2,863 per student.
“How the money is spent matters,” the authors conclude. Districts in their study added 1.3 more days to the school year, increased base teacher salaries by 4 percent and reduced student-teacher ratios by 5.7 percent.
“Does money matter?” is an old question in education. The short answer seems to be: It depends on how it’s spent.
In 1989, 15 low-achieving, high-minority Austin schools got an extra $500,000 a year for five years due to a desegregation lawsuit. Two schools improved significantly, while the other 13 did not improve at all, concluded researchers Richard Murnane and Frank Levy. All the schools lowered class sizes, but only the two improving schools used smaller classes to change instruction and adopt a more rigorous curriculum.
This video from the Wisconsin Institute for Law and Liberty, via Jay Greene, argues that more spending hasn’t improved student performance.