NCPA - National Center for Policy Analysis

Does More Money Mean Better Schools?

May 17, 2000

Despite controversy about the impact of spending on school quality, government policy and court actions continue to focus on altering resources for schools. An analysis of spending differences both across and within states find little support for a link between governmental school spending policies and increases in student performance.

From 1970 to 1995, average spending per pupil has risen from $3,645 per pupil to $6,434 per pupil. During that time,

  • SAT scores have dropped from 950 to 900, according to the Department of Education.
  • Reading scores have stayed relatively constant on the National Assessment of Educational Progress (NAEP).
  • NAEP writing scores have declined.
  • NAEP math and science scores dropped and then rose while increases in spending remained constant.

Thus recent higher eighth grade math and reading scores are unrelated to spending differences, although they are related to parental education levels. Also, the improvement in performance is consistent for white, black, and Hispanic students, suggesting that spending is not the explanation for the convergence of overall NAEP scores among racial and ethnic groups during the 1980s.

Correcting school spending inequality might even be detrimental. The study also shows that the more uniform school spending is, the more inequality appears in subsequent earnings.

Source: Eric Hanushek and Julie Somers, "Schooling, Inequality, and the Impact of Government," National Bureau of Economic Research, Working Paper 7450, December 1999.


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