NCPA - National Center for Policy Analysis


February 9, 2009

President Barack Obama, in discussing the $800+ billion economic stimulus package now working its way through Congress, promised that "we will invest in what works." Well, if that's true, every piece of education spending -- totaling a whopping $150 billion -- in the mammoth stimulus bill should fall by the wayside, say Neal McCluskey, an associate director of the Cato Institute's Center for Educational Freedom, and Adam B. Schaeffer, an education policy analyst at the Cato Institute.

More and better education may indeed be a good thing, but government spending doesn't give us that.  What it gives us is more waste, say McCluskey and Schaeffer:

  • The average, inflation-adjusted, per-pupil expenditure in the United States was $5,393 in 1970 according to the U.S. Department of Education's Digest of Education Statistics.
  • By 2004 it had more than doubled to $11,470.

And what did we get in return?  Almost nothing:

  • Between 1973 and 2004 mathematics scores on the National Assessment of Educational Progress rose just one percent for 17-year-olds.
  • And math achievement was the good news. Between 1971 and 2004, their reading scores were completely flat.

So much for K-12.  How about higher education?  Here too, there's been no dearth of money:

  • According to the State Higher Education Executive Officers, the overall trend for state and local expenditures per full-time-equivalent college student held steady at around $7,000 over the past 25 years.
  • Enrollment, however, increased by more than a third, inflating the overall taxpayer bill.
  • And student aid -- most of which came through government -- nearly tripled, hitting $10,392.

What are the returns on this outlay?  Nada or negative.  There isn't much systematic data on higher education outcomes, but what we do have looks discouraging, say McCluskey and Schaeffer:

  • Forty percent of people whose highest educational attainment was a bachelor's degree were proficient readers in 1992 according to the National Assessment of Adult Literacy; by 2003, only 31 percent were.
  • For Americans with graduate degrees, 51 percent were proficient readers in 1992, but 11 years later, only 41 percent were.
  • This lack of improvement is not limited to reading; between 1992 and 2003 bachelor's degree holders saw no change in quantitative proficiency, and graduate scores dropped.

More and better education may indeed be a good thing, but government spending doesn't give us that, say McCluskey and Schaeffer.

Source: Neal McCluskey and Adam B. Schaeffer, "Investing in What Doesn't Work," Cato Institute, February 4, 2009.

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