Money and Education

Scholars have studied the relationship between per-student
spending and achievement test scores since the publication
of Equality of Educational Opportunity (a.k.a. "The Coleman
Report") in 1966. Sociologist James Coleman, its author,
concluded then that per-pupil spending does not have a
significant impact on student achievement scores. Economist
Erik Hanushek and others have subsequently replicated Coleman's
study and even extended it beyond U.S. borders. The finding
of over 30 years of research is clear: More money does not
equal better education. There are schools, states, and countries
that spend a great deal of money per pupil with poor results,
while others spend much less and do much better.
A recent story out of Kansas City, Missouri, illustrates the
truth of this as well as any. In 1985, a federal judge directed
the school district in that city to devise a "money-is-no-object"
educational plan to improve the achievement of black students
and encourage desegregation. As a result, Kansas City taxpayers
ended up spending more money per pupil annually, on a
cost-of-living adjusted basis, than taxpayers in any of the
country's 280 largest school districts. They paid for 15 new
schools, an Olympic-sized swimming pool with an underwater
viewing room, television and animation studios, a 25-acre wildlife
sanctuary, a zoo, a robotics lab, field trips to Mexico and Senegal,
and higher teacher salaries. The student-to-teacher ratio was the
lowest of any major school district in the nation at 13-to-1. By
the time the experiment ended in 1997, costs had mounted to
nearly $2 billion. Yet test scores did not rise, and there was even
less student integration than before the spending spree. In May
2000, the Missouri Board of Education officially removed
accreditation status from the district for failing to meet even one
of 11 performance standards! In short, we have all but exhausted
the rules-and resource-based approaches to education reform,
with little to show for our time and money. This leaves us with
the incentives-based approach. Merit pay for teachers is one form
this can take, but parental choice remains its centerpiece.