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Two general conclusions come from the recent studies: 1) with high probability, adding resources to schools has a positive effect on student outcomes; and 2) the estimated impact of resources is highly variable and depends on the context and constraints on the spending.
While all of the results for school attainment (high school graduation, not dropping out, and continuing to college) are positive, they also cover a very wide range….The major difficulty is that it has not been possible to describe when funds are particularly effective or ineffective.
To date, little headway has been made in describing the features of the particular contexts or the particular use of funds that yields significant learning gains….The current research underscores the importance of how funds are used if student achievement is to be improved. (Hanushek, E.A., “40 Years After ‘A Nation At Risk,’ Fixing Schools Through More Efficient (and Effective) Funding; Hanushek: When it comes to improving school quality, how funds are spent is even more important than how much,” The 74, 2024.)
Two recent summaries of this more recent literature, one by Jackson and Mackevicius and the other by Handel and Hanushek (2023),…found that, on average, there is a strong statistically significant relationship between increased school spending and student outcomes….Each dollar spent on operational school spending generates at least a $1.20 return on average for society with the true benefit possibly exceeding $2.47….This calculation doesn’t account for benefits such as reduced criminality or other advantages to students—likely understating the full benefits of increased school spending.
Each dollar spent on public schools would yield more than one dollar in social return at least 85% of the time. This does not account for benefits through taxes, reduced crime, or other channels, so the true likelihood is higher than this.
The [current] average effect of school spending will resemble [what was found in] recent literature reviews….The benefits reported in [these] studies…are likely applicable today.
The fact that certain kinds of spending may be more effective at improving outcomes than others is largely irrelevant to the question of whether increasing school spending is worthwhile. Whatever the budget may be, it should be spent as effectively as possible.
The debate around school spending often seems to be framed as one of providing more resources versus spending resources more effectively. This dichotomy is largely rhetorical and has little economic or policy content. So long as the additional funds pass a cost-benefit test (which research suggests they typically do), one should do both.
While the evidence shows that providing largely unrestricted additional money to schools does improve outcomes, in general this does not mean that increasing school spending without regard for what it may be spent on is the best way to improve outcomes. However, the results clearly indicate that increasing school spending in ways that have been done in the past at current spending levels will likely add social value. (Jackson, C.K. and Persico, C., “Point column on school spending: Money matters,” Journal of Policy Analysis and Management, Volume 42, Issue 4, Autumn (Fall) 2023, Pages 1118-1124.)
When Jackson and Mackevicius (2021) synthesized findings across studies, they found robust consensus among causal studies that examined relationships between funding and outcomes: most studies indicate that funding had positive effects on student outcomes….Research finds that increases in spending lead to improved student outcomes ranging from test scores to graduation to college attendance to adult earnings and poverty….Notably, dollar-per-dollar effects are larger for low-income students. Effects are also larger and more consistently positive with operational spending—teachers, support staff, materials—than for spending on facilities.
Some experts caution that estimates from studies of prior spending increases may be less relevant to future ones, reflecting diminishing returns from a higher spending level (e.g., Hanushek 2015). However, Jackson and Mackevicius (2021) show that the size of the effects for more recent student cohorts are similar per dollar to older ones. [Hence] evidence does not yet suggest that we have reached, on average, a point of diminishing returns.
The research does not say that spending will always translate into improved outcomes nor that how money is spent does not matter. The effects identified in the existing research are averages; some types of spending are likely more important for outcomes than others, and some districts may allocate resources in more efficient ways….Clearly, how dollars are spent matters, but so far the research has yielded relatively few actionable insights. (Lafortune, J., “Understanding the Effects of School Funding,” Public Policy Institute of California, 2022.)
On average, aggregate measures of per-pupil spending are positively associated with improved or higher student outcomes….Schooling resources that cost money, including smaller class sizes, additional supports, early childhood programs, and more competitive teacher compensation (permitting schools and districts to recruit and retain a higher-quality teacher workforce), are positively associated with student outcomes. (Baker, B.D. , “Does Money Matter in Education? Second Edition,” Albert Shanker Institute, 2016.)
Funding increases significantly improved academic achievement for every grade and subject assessed, reduced grade repetition, enabled lower suspension rates, and increased the likelihood of students graduating from high school and being college-ready. The impact on student achievement grew with years of exposure to increased funding and with the amount of the funding increase. District investments in instructional inputs, including reduced class size, increased teacher salaries, and teacher retention, were associated with improved student outcomes.
Increasing per-pupil spending by $1,000 for three consecutive years led to a full grade-level improvement in both math and reading achievement…[and] was associated with a 5 to 6 percentage-point reduction in the likelihood of being suspended or expelled in a given year of high school for boys and a 3 percentage-point reduction for girls.
The impacts for Black students are the most pronounced. The evidence reveals that, among Black boys, a $1,000 increase in per-pupil spending experienced for three consecutive years (grades 8–10) was associated with an 8 percentage-point reduction in the likelihood of suspension or expulsion in high school (10th grade) and a 5 percentage-point reduction in the probability of suspension or expulsion for Black girls.
Increases in instructional expenditures appear to be the input associated with the largest consistent boost in student performance….The estimated impacts are not driven by any single group of students or districts, nor confined to a single outcome, but rather reflect a general pattern that school spending matters. For student success, instructionally focused dollars matter more than others. (Johnson, R., “School Funding Effectiveness: Evidence From California’s Local Control Funding Formula,” Learning Policy Institute, 2023.)
Increases in instructional expenditures appear to be the input associated with the largest consistent boost in student performance….the estimated impacts are not driven by any single group of students or districts, nor confined to a single outcome, but rather reflect a general pattern that school spending matters. For student success, instructionally focused dollars matter more than others. (Johnson, R., “School Funding Effectiveness: Evidence From California’s Local Control Funding Formula,” Learning Policy Institute, 2023.)
Schooling resources that cost money, including smaller class sizes, additional supports, early childhood programs, and more competitive teacher compensation (permitting schools and districts to recruit and retain a higher-quality teacher workforce), are positively associated with student outcomes. Again, in some cases, those effects are larger than in others, and there is also variation by student population and other contextual variables….Children in smaller classes achieve better outcomes, both academic and otherwise, and…class size reduction can be an effective strategy for closing racial and socio-economic achievement gaps. (Baker, B.D., “Does Money Matter in Education? Second Edition,” Albert Shanker Institute, 2016.)
Teachers matter more to student achievement than any other aspect of schooling. Many factors contribute to a student’s academic performance, including individual characteristics and family and neighborhood experiences. But research suggests that, among school-related factors, teachers matter most. When it comes to student performance on reading and math tests, teachers are estimated to have two to three times the effect of any other school factor, including services, facilities, and even leadership. (Opper, I.M., “Teachers Matter – Understanding Teachers’ Impact on Student Achievement,” RAND Corporation, 2021.)
Research has found that social conditions in a school—the school’s culture, the principal’s leadership, and relationships among colleagues—best predict a teacher’s job satisfaction and career plans. Importantly, this finding is independent of the background and demographics of students enrolled.
This research defines the elements as follows:
The most famous and rigorous study of class size reduction took place in Tennessee beginning in 1985 when some kindergarten students were randomly assigned to unusually small classes through third grade. Test scores in the classes of 13 to 17 students quickly surpassed scores in the larger classes of 22 to 25. Those gains persisted for years. Other studies in California, Minnesota, New York City, North Carolina, Texas, and Wisconsin have shown lower class sizes boost test scores, too.
A few studies have also found other benefits, with smaller classes leading to greater classroom engagement and higher attendance. In Tennessee, researchers later found that students in smaller classes in early grades were also more likely to attend and graduate from college.
Most studies find at least some evidence of positive effects of smaller classes, but the size of these benefits is inconsistent….Studies do not agree on how much improvement schools can expect from smaller class sizes. In some research, the impact of small classes is more modest than the large gains seen in Tennessee. (Barnum, M., “Does class size really matter? A Chalkbeat look at the research,” Chalkbeat, 2022.)
Alternative findings:
To date, little headway has been made in describing the features of the particular contexts or the particular use of funds that yields significant learning gains….The current research underscores the importance of how funds are used if student achievement is to be improved. (Hanushek, E.A., “40 Years After ‘A Nation At Risk,’ Fixing Schools Through More Efficient (and Effective) Funding; Hanushek: When it comes to improving school quality, how funds are spent is even more important than how much,” The 74, 2024.)
Some types of spending are likely more important for outcomes than others, and some districts may allocate resources in more efficient ways….Clearly, how dollars are spent matters, but so far the research has yielded relatively few actionable insights. (Lafortune, J., “Understanding the Effects of School Funding,” Public Policy Institute of California, 2022.)
Teachers matter more to student achievement than any other aspect of schooling. Many factors contribute to a student’s academic performance, including individual characteristics and family and neighborhood experiences. But research suggests that, among school-related factors, teachers matter most. When it comes to student performance on reading and math tests, teachers are estimated to have two to three times the effect of any other school factor, including services, facilities, and even leadership. (Opper, I.M., “Teachers Matter – Understanding Teachers’ Impact on Student Achievement,” RAND Corporation, 2021.)
Research conducted in recent years in various parts of the country and world has helped clarify the role of teacher pay. Many of these studies have found that increased pay — whether through salary hikes, one-time bonuses, college debt-forgiveness programs, or other new forms of compensation — is associated with:
Both mathematics and English test scores are significantly higher in districts that offer higher base salaries to teachers when compared to those in districts with a lower teacher base salary. We also find that higher teacher base salaries reduce the achievement gap between White and Black students and between White and Hispanic students by raising test scores more for those minority students. (Garcia, E. and Han E.S., “Teachers’ Base Salary and Districts’ Academic Performance: Evidence From National Data,” Economic Policy Institute and University of Utah, 2022.)
Research from Michigan and from North Carolina finds that the length of time teachers stay in teaching depends on salaries and opportunity costs—that is, the salary teachers forgo by staying in teaching instead of moving into a different field. A study from Washington state found that female teachers stay longer in the profession when local teacher salaries increase relative to salaries available in other local employment. Males stay longer when teachers are paid more across the state. (Ferlazzo, L., “What Does It Mean to ‘Overspend’ on Teacher Salaries?” Education Week, 2022.)
The limited available cross-country evidence suggests that students perform better where teachers are better paid….Salary levels may have important ramifications for the quality of the overall pool of potential teachers….Countries that pay teachers more…tend to draw their teachers from higher parts of the college skill distribution….Thus, while making it clear that a more skilled teaching force is generally found in countries with higher relative salaries, policymakers will need to do more than raise teacher pay across the board to ensure positive results. They must ensure that higher salaries go to more effective teachers. (Hanushek, E.A, Piopiunik, M., and Wiederhold, S., “Do Smarter Teachers Make Smarter Students? International evidence on teacher cognitive skills and student performance.” Education Next, Spring 2024, Vol. 24, No. 2.)
States’ funding systems should ensure that districts receive significant additional state and local funding to support students from low-income families and English learners. In addition, state funding systems should ensure that districts serving high concentrations of students of color receive at least as much state and local funding as other districts. Unfortunately, that is not what we see in the data. Instead, we see a varied picture in which too many districts with more need — no matter how you define it – do not receive more state and local funding.
School districts and schools that serve large populations of students from low-income backgrounds, students of color, and English learners continue to receive less funding than other districts. This is despite clear evidence that sustained and significant school funding increases can have a lasting impact on achievement and other outcomes, especially for students from low-income backgrounds.
School funding systems that provide more funding – not equal and certainly not less – to meet the needs of underserved students will allow each student to have the resources and supports they need to thrive.
[Nationally,] districts with the most students of color receive 16% less state and local revenue than districts with the fewest students of color; high poverty districts receive 5% less state and local revenue than low poverty districts; and districts with the most English learners receive 14% less state and local revenue, compared with districts with the fewest English learners.
Local revenue is mainly derived from local property taxes, which is inherently inequitable. Different communities have different property values, and districts in property-wealthy communities will always have an easier time raising more money at similar tax rates.
State funding formulas usually have mechanisms that counteract the inequities in local revenue that exist across districts. In some states, these policies are actually effective, so that total state and local revenue is progressive even if local revenue is not. But, many other states are not meeting this mark, and some have a long way to go. (The Education Trust, “The State of Funding Equity Data Tool,” 2024.)
See The Education Trust’s “The State of Funding Equity Data Tool,” which is based on 2020 student demographic and revenue data from federal government sources.
Across the country, districts with the most Black, Latino, and Native students receive substantially less state and local revenue — as much as $2,700 per student — than districts with the fewest students of color. In a district with 5,000 students, this means $13.5 million in missing resources…. The 2022 National Assessment of Educational Progress (NAEP) found that Black and Latino students experienced larger-than-average dips on fourth grade tests, widening already significant test score gaps compared to White and Asian American students. Gaps on the NAEP tests for Black and Latino students in eighth grade, as well as between low- versus middle- and high-income students in both fourth and eighth grades, remained significant.
“Money matters, and how much a school has affects student outcomes. Yet, school districts and schools that serve large populations of students from low-income backgrounds, students of color, and English learners continue to receive less funding,” (The Education Trust, “School Districts That Serve Students of Color Receive Significantly Less Funding,” 2022.)
Research finds that increases in spending lead to improved student outcomes, ranging from test scores, to graduation, to college attendance, to adult earnings and poverty….Notably, dollar-per-dollar effects are larger for low-income students. (Lafortune, J., “Understanding the Effects of School Funding,” Public Policy Institute of California, 2022.)
Respect for Teachers
From Merrimack College and EdWeek Research Center, 1st Annual Merrimack College Teacher Survey: 2022 Results.
A consistent finding in the research is that teacher job satisfaction is linked to their sense of being respected. However, there is a growing perception among teachers that the general public does not understand or appreciate their work. A 2022 national survey found that just 46% of teachers felt that the general public respected them and saw them as professionals versus 77% in a 2011 survey.