Fear Versus Fact: The Historical Paradox: Spending More and Getting Less

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This is the "The historical paradox: spending more and getting less" segment from Fears versus facts about school choice: An overview of issues surrounding the effects of competition on public education


By John Garen, Ph.D.

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The historical paradox: spending more and getting less

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Increased resources, flat performance

During the past three to four decades, resources devoted to public schools in the United States have increased significantly. Along with this increase in resources came a substantial drop in student-teacher ratios in classrooms, rising educational levels for teachers and more administrative services. Yet, public schools as a whole showed virtually no substantial overall improvement during this same time period. This brings into question the effectiveness of public education.

Summary data of these trends is presented, and detailed statistical analysis supports the broad conclusions they show: many public schools and school systems do not use resources effectively because they have little incentive to do so. School choice and competition foster these incentives.

Chart 1 shows the average per-pupil spending in public schools from 1970 to 2005, in both unadjusted dollars and dollars adjusted for inflation. As one can see, inflation-adjusted per-pupil spending during this time period approximately doubled, rising from well under $5,000 per student to about $9,000.

Chart 1: Current Expenditure Per-Pupil in Fall Enrollment in Public Schools, 1970-71 to 2004-05 [1]

Also during this time, many indicators often viewed as aspects of classroom quality rose substantially. Some examples are shown in Chart 2. From the 1960s through the 1990s, the pupil-teacher ratio fell dramatically for the typical classroom, the percent of teachers with a master’s degree more than doubled and the experience level of teachers also rose substantially.

Chart 2: Selected Indicators of Classroom Quality [2] [3]

Though public-school systems clearly received large increases in funding and seeming improvement in classroom and teacher quality, there appears little to show for it. Chart 3 illustrates this by charting selected outcomes for The National Assessment of Educational Progress (NAEP) long-term trend examination. (The NAEP exam is taken by a national sample of students in various years. The National Assessment Governing Board, whose members are appointed by the U.S. Secretary of Education, administers the program.)


Chart 3 shows reading scores over time using the NAEP long-term trend assessment. Only those scores marked with an asterisk arestatistically significantly different from the 2004 scores. The chart indicates essentially no progress in reading competence among public-school students during this period of large increases in resources devoted to public education. A similar chart for mathematics scores shows some improvement for 9- and 13-year-olds, but not for 17-year-olds.

Chart 3: U.S. Average Reading Scores, National Assessment of Educational Progress Long-Term Trend Assessments [4]

In addition to the NAEP long-term trend showing little or no progress overall, it also demonstrates minimal progress made serving minority students.

Chart 4 presents the gap in the scores between black and other students. This chart shows the average reading test scores of 9-year olds, but other test results for older students follow a similar pattern. (Scores and gaps identified on this graph with an asterisk are statistically significantly different from the 2004 scores or the 2004 gap of 26 points.) While data indicate some decline in the gap, no clear, consistent decline over time exists, and a substantial disparity remains. For example, due to the size of the samples of black students in the Long Term Trend NAEP, the gap in 2004 actually is not significantly different from the gaps reported in 1980, 1988, 1994 and 1996.

Though these charts in themselves do not prove that the increased educational spending has no impact, more detailed econometric analysis supports such conclusions.

Chart 4: Reading Scores by Race, National Assessment of Educational Progress Long-Term Trend Assessments

These studies usually show that increased expenditures on public schools have not produced a positive effect on student performance. This is true of overall expenditures, and with regard to spending on various categories such as those on reducing the student-teacher ratio, teacher salaries, facilities and administration.[5]

How can resources not matter?

The historical paradox is that increased resources have been devoted to public schools for more than three decades, yet our nation’s typical public-school system seems to be doing no better.

How is it possible that resources do not matter? Of course, resources matter, but in order to be effective, they must be wisely spent. There are many good schools and school districts that make productive use of their funding. However, the data comprising the historical paradox implies that ineffective use of resources must be quite pervasive.

The historical paradox also does not imply that resources cannot matter. What it does imply is that there are improper incentives to use resources effectively in many settings. In the next section, we discuss government-directed initiatives to address this problem, with a particular focus on Kentucky’s experience. We then contrast this with the potential of increased school choice.

More from Fears Versus Facts About School Choice

You can read more from Fears versus facts about school choice: An overview of issues surrounding the effects of competition on public education in the pages below.

References

  1. Snyder, T.D., Dillow, S.A., and Hoffman, C.M., “Digest of Education Statistics 2007” (NCES 2008-022). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC. 2008
  2. Hanushek, Eric, “Publicly Provided Education,” in A. Auerbach and M. Feldstein (eds.), “Handbook of Public Economics,” Volume 4, Amsterdam: Elsevier Science B.V., 2002
  3. Snyder, T.D., Dillow, S.A., and Hoffman, C.M., “Digest of Education Statistics 2007” (NCES 2008-022). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC. 2008
  4. http://nces.ed.gov/nationsreportcard/ltt/results2004/nat- reading-scalescore.asp Perie, Moran, and Lutkus (2005)
  5. Hanushek, Eric, “Publicly Provided Education,” in A. Auerbach and M. Feldstein (eds.), “Handbook of Public Economics,” Volume 4, Amsterdam: Elsevier Science B.V., 2002.