REL Midwest Ask A REL Response

July 2020

Baker, B. D. (2016). Does money matter in education? Washington, DC: Albert Shanker Institute. Retrieved from https://eric.ed.gov/?id=ED563793

From the ERIC abstract: “This second edition policy brief revisits the long and storied literature on whether money matters in providing a quality education. It includes research released since the original brief in 2012 and covers a handful of additional topics. Increasingly, political rhetoric adheres to the unfounded certainty that money does not make a difference in education, and that reduced funding is unlikely to harm educational quality. Such proclamations have even been used to justify large cuts to education budgets over the past few years. These positions, however, have little basis in the empirical research on the relationship between funding and school quality. In the following brief, the author discusses major studies on three specific topics: (1) whether how much money schools spend matters; (2) whether specific schooling resources that cost money matter; and (3) whether substantive and sustained state school finance reforms matter. Regarding these three questions, the author concludes: (1) Does money matter? Yes; (2) Do state school finance reforms matter? Yes; and (3) Do schooling resources that cost money matter? Yes.”

DeAngelis, C., & DeGrow, B. (2018). Doing more with less: The charter school advantage in Michigan. Midland, MI: Mackinac Center for Public Policy. Retrieved from https://eric.ed.gov/?id=ED589023

From the ERIC abstract: “The appointment of Betsy DeVos as education secretary of the United States has led to much debate across the nation about public charter schools. Opponents of charter schools typically argue that these schools fail if their average standardized test scores do not exceed those of traditional, district-run schools. These types of comparisons, however, often do not take taxpayer inputs into account. Taking these inputs into consideration, public charter schools ought to be deemed successful if they are able to produce similar outcomes at a lower cost to taxpayers. In this study, the authors examine charter school funding inequities in 92 cities across Secretary DeVos’s home state of Michigan. In addition, they calculate the cost effectiveness and return on investment of public charter schools in 71 Michigan cities. Similar to the findings of the existing literature on the topic, the authors find that public charter schools receive substantially less funding per pupil than traditional public schools. They reveal that charters in Michigan are more cost effective and produce a larger return on investment for taxpayers. Three key findings include: (1) On average, Michigan charter schools receive about $2,782, or 20 percent, less per pupil than traditional public schools; (2) Based in part on this funding disparity, the average public charter school studied is 32 percent more cost effective than the average traditional public school located in the same city; and (3) As measured by expected lifetime earnings of each student, the average charter school generates about $2.63 more return on investment for each dollar it spends—36 percent higher than the average traditional public school.”

DeAngelis, C. A., Wolf, P. J., Maloney, L. D., & May, J. F. (2019). A good investment: The updated productivity of public charter schools in eight U.S. cities. Fayetteville, AR: School Choice Demonstration Project. Retrieved from https://eric.ed.gov/?id=ED594439

From the ERIC abstract: “In 2015-16, the United States spent over $660 billion on its public education system in hopes of providing children with greater opportunities to excel academically and to improve their life trajectories. While public education dollars have risen at a relatively fast pace historically, future challenges, including underfunded pension liabilities, suggest policymakers should economize wherever possible. Meanwhile, the number of public charter schools has increased exponentially. From 1991 to 2018, charter school legislation passed in 44 states and the nation’s capital, and student enrollment in charters increased to around 3.2 million. Since educational resources are limited, the authors examine which types of schooling offer society the biggest ‘bang for the buck.’ Both cost-effectiveness and return-on-investment (ROI) analyses compare the productivity of different organizations providing a similar service—in this case, public education. The authors examine the differences in cost-effectiveness and ROI for public charter schools and traditional public schools (TPS) in eight major U.S. cities: Atlanta, Boston, Denver, Houston, Indianapolis, New York City, San Antonio, and the District of Columbia. Overall, they find that public charter schools outperform TPS on both productivity metrics overall and for all eight cities. They conclude that public charter schools in these eight U.S. cities are a good public investment in terms of the comparative amount of student achievement they produce for the funding they receive.”

Jackson, C. K. (2019). Does school spending matter? The new literature on an old question (NBER Working Paper No. 25368). Cambridge, MA: National Bureau of Economic Research. Retrieved from https://eric.ed.gov/?id=ED594353

From the ERIC abstract: “Social scientists have long sought to examine the causal impact of school spending on child outcomes. For a long time, the literature on this topic was largely descriptive so that it had been difficult to draw strong causal claims. However, there have been several recent studies in this space that employ larger data-sets and use quasi-experimental methods that allow for much more credible causal claims. Focusing on studies of students in the United States, this paper briefly discusses the older literature and highlights some of its limitations. It then describes a recent quasi-experimental literature on the impact of school spending on child outcomes, highlights some key papers, and presents a summary of the recent findings. Policy implications and areas for future research are discussed.”

Lavigne, H. J., Ryan, S., Zweig, J. S., & Buffington, P. J. (2017). Exploring district-level expenditure-to-performance ratios (REL 2017-267). Washington, DC: U.S. Department of Education, Institute of Education Sciences, national Center for Education Evaluation and Regional Assistance, Regional Educational Laboratory Northeast & Islands. Retrieved from https://eric.ed.gov/?id=ED573221

From the ERIC abstract: “State education budgets have shrunk since the economic recession of 2007-09. During the 2012-13 school year 35 states provided less funding for education than they had five years earlier (Leachman, Albares, Masterson, & Wallace, 2016; Levin et al., 2012; Oliff, Mai, & Leachman, 2012). As a result, districts across the country are seeking ways to increase their efficiency by using fewer resources while maintaining or even improving education outcomes. This study examines the expenditure-to-performance ratio, a measure that can be used along with other information to examine districts’ use of resources as a proxy measure of efficiency. District expenditure-to-performance ratios offer a simple descriptive method of simultaneously assessing spending and student outcomes using publicly available data. However, expenditure-to-performance ratios can use different measures of expenditure and performance, and research has not always explicitly considered how variability in the choice of measures and of district characteristics (such as locale, student enrollment size, and student poverty status) can affect outcomes. Conducted by Regional Educational Laboratory (REL) Northeast & Islands in partnership with the REL Northeast & Islands Northeast Rural Districts Research Alliance, this study used state department of education of data to create six expenditure-to-performance ratios, each calculated by dividing one of three district-level measures of per pupil expenditures by one of two district-level measures of performance. The six ratios were then used to rank the 98 sample districts in the example REL Northeast & Islands Region state. Key findings included: (1) The rank of each district varied according to which of the six expenditure-to-performance ratios was being considered; (2) Districts’ ranks may show more movement when comparing ratios calculated using different measures of performance than when comparing ratios using different measures of expenditures; and (3) Nearly half (43) of the 98 districts ranked among the top 25 districts on at least one ratio, but only 8 districts ranked among the top 25 on all six ratios. This study demonstrates how, at least within one state, conclusions about district efficiency may vary depending on which measures of expenditure and performance are considered.”

Lee, K.-G., & Polachek, S. W. (2018). Do school budgets matter? The effect of budget referenda on student dropout rates. Education Economics, 26(2), 129–144. Retrieved from https://eric.ed.gov/?id=EJ1167547

From the ERIC abstract: “This paper analyzes how changes in school expenditures affect dropout rates based on data from 466 school districts in New York during the 2003/04 to the 2007/08 school years. Past traditional regression approaches show mixed results in part because school expenditures are likely endogenous, so that one cannot disentangle cause and effect. The regression discontinuity design used in this study isolates exogenous variation in school expenditures per pupil by comparing school districts where budget referenda passed and failed by narrow margins. The results indicate that increases in school expenditures reduce New York State dropout rates.”

Note: REL Midwest was unable to locate a link to the full-text version of this resource. Although REL Midwest tries to provide publicly available resources whenever possible, it was determined that this resource may be of interest to you. It may be found through university or public library systems.

Normore, A. H., & Ilon, L. (2006). Cost-effective school inputs: Is class size reduction the best educational expenditure for Florida? Educational Policy, 20(2), 429–454. Retrieved from https://eric.ed.gov/?id=EJ734949

From the ERIC abstract: “The current debate about class size is not centered on whether smaller class sizes are desirable. Rather, the debate is whether the costs involved are the best ways to spend taxpayers’ monies. This analysis addresses this question for the state of Florida. Using the Florida Comprehensive Assessment Test as a measure of educational achievement, a state data set containing information on all elementary schools was used to examine which government-funded inputs were most cost effective. Using a three-step methodology leading to a cost effectiveness analysis, this article finds that reducing class sizes is the most expensive of state inputs that affect achievement scores. Varying the mix of school personnel (administrators, teachers, and teacher aides) and investments in teacher quality (training and experience) are shown to produce the same results (raising test scores) at a lower cost than the reduction of class sizes.”

Note: REL Midwest was unable to locate a link to the full-text version of this resource. Although REL Midwest tries to provide publicly available resources whenever possible, it was determined that this resource may be of interest to you. It may be found through university or public library systems.

Perez, M., Anand, P., Speroni, C., Parrish, T., Esra, P., Socias, M., et al. (2007). Successful California schools in the context of educational adequacy. Washington, DC: American Institutes for Research. Retrieved from https://eric.ed.gov/?id=ED499199

From the ERIC abstract: “This report presents the results from a seven-month study of successful schools in California performed by the American Institutes for Research (AIR). It explored some of the concepts underlying the ‘successful schools’ approach to defining education adequacy and considered their implications for analyzing educational adequacy in California. The successful schools approach seeks to determine the cost of the education needed to reach a specified level of educational outcomes by identifying districts achieving these outcomes and determining how much they are spending. This study sought to improve on this basic approach by selecting schools that have been consistently performing at a higher level than the one predicted by their demographics, rather than selecting successful schools that are above an absolute level of performance in a given year or over a given period of time. The AIR analyzed these schools that were ‘beating the odds’ (BTO) with regard to student achievement and compared them to low-performing (LP) schools. Telephone interviews were also conducted with 23 schools from both groups to understand their resource allocation practices and to identify common themes in the factors principals deemed necessary for success. A major premise underlying all approaches to education adequacy is that success is directly linked to the resources available. This study explored this assumption by looking for evidence to confirm or disprove the idea that resource quantities constitute the primary distinguishing factor between successful schools and all others. Following an Introduction, Chapter 2 reviews findings from prior successful schools studies and discusses the strengths and weaknesses of these alternative applications. Chapter 3 describes the data and methods used to address the subsequent research questions for this study. Chapter 4 presents methods for appropriately conceptualizing ‘successful schools’ for the purposes of this study, and presents analyses of these schools. Chapter 4 also analyzes the observed resources differences in these schools compared to ‘low performing’ and other schools statewide. Finally, Chapter 5 presents the results of phone interviews with a subset of BTO and LP school principals in an attempt to assess the extent the resource findings from Chapter 4 are corroborated and to identify other factors said to be related to the educational outcomes produced by these schools. The final chapter of this report contains a discussion of possible implications for considering education adequacy in California.”

Perez, M., & Socias, M. (2008). Highly successful schools: What do they do differently and at what cost? Education Finance and Policy, 3(1), 109–129. Retrieved from https://eric.ed.gov/?id=EJ851514

From the ERIC abstract: “An underlying premise of many resource adequacy studies is that reaching a specified set of educational outcomes is directly dependent on the level of resources. This article analyzes resource allocation practices among successful schools, low-performing schools, and average public schools in California. We find that differences in traditional resource measures are not able to explain the sharp differences in student achievement among these schools. While unmeasured differences in student characteristics in these schools may explain part of the difference in achievement, the schools also differ dramatically in their effectiveness even though they have very similar expenditure levels. The conclusion is not that resources do not matter. They do, but only when used wisely. This article also delves into what successful schools are doing that might explain their success.”

Note: REL Midwest was unable to locate a link to the full-text version of this resource. Although REL Midwest tries to provide publicly available resources whenever possible, it was determined that this resource may be of interest to you. It may be found through university or public library systems.

Shores, K., & Steinberg, M. P. (2019). Schooling during the Great Recession: Patterns of school spending and student achievement using population data. AERA Open, 5(3). Retrieved from https://eric.ed.gov/?id=EJ1229671

From the ERIC abstract: “The Great Recession was the most severe economic downturn in the United States since the Great Depression. Using data from the Stanford Education Data Archive (SEDA), we describe the patterns of math and English language arts (ELA) achievement for students attending schools in communities differentially affected by recession-induced employment shocks. Employing a difference-in-differences strategy that leverages both cross-county variation in the economic shock of the recession and within-county, cross-cohort variation in school-age years of exposure to the recession, we find that declines in student math and ELA achievement were greater for cohorts of students attending school during the Great Recession in communities most adversely affected by recession-induced employment shocks, relative to cohorts of students that entered school after the recession had officially ended. Moreover, declines in student achievement were larger in school districts serving more economically disadvantaged and minority students. We conclude by discussing potential policy responses.”

Venteicher, J. (2005). How much does funding matter? An analysis of elementary and secondary school performance in Missouri, 1990-2004. Journal of Educational Research & Policy Studies, 5(2), 39–65. Retrieved from https://eric.ed.gov/?id=EJ846835

From the ERIC abstract: “The individual works of Eric Hanushek and the collaborative efforts of Hedges, Laine, and Greenwald in the 1980s and 1990s focused a substantial amount of attention on the relationship between education budget allocations and school performance. Using their opposing hypotheses as a theoretical framework, this study focuses on K-12 education in Missouri for the period from 1990 to 2004, taking into account the cuts in state aid to education that began in 2000. Utilizing four distinct measures of school performance, the results suggest funding levels have a significant impact on student achievement. Per-pupil expenditures alone, however, are not the most significant variable in the models. Other variables, such as rural/urban geographic location, the poverty level of a school district, and the demographic makeup of a district are also influential to school performance levels.”

Yeh, S. S. (2010). The cost effectiveness of 22 approaches for raising student achievement. Journal of Education Finance, 36(1), 38–75. Retrieved from https://eric.ed.gov/?id=EJ893876

From the ERIC abstract: “Review of cost-effectiveness studies suggests that rapid assessment is more cost effective with regard to student achievement than comprehensive school reform (CSR), cross-age tutoring, computer-assisted instruction, a longer school day, increases in teacher education, teacher experience or teacher salaries, summer school, more rigorous math classes, value-added teacher assessment, class size reduction, a 10% increase in per pupil expenditure, full-day kindergarten, Head Start (preschool), high-standards exit exams, National Board for Professional Teaching Standards (NBPTS) certification, higher teacher licensure test scores, high-quality preschool, an additional school year, voucher programs, or charter schools. Limitations of the study are discussed and the findings are interpreted with regard to studies of the effect of performance feedback on student motivation and perceptions of control over academic outcomes.”