school spending

In this post, I was gushing about Caroline Hoxby’s article, and I want to reiterate this judgment: it is awesome. There are about 15 interesting things to pursue from this paper, and hopefully I will lay out some of them in this blog.

Here’s one. It is apparently a huge misconception to believe that school districts with poor residents spend less on a per pupil basis than richer areas. Here’s Hoxby:

Another popular misconception is that per-pupil spending is very low in urban school districts with poor residents. As a statement of fact, this is just not generally true: for the 50 school districts in the United States that best fit this characterization, the ratio of the school district’s per-pupil spending to its state’s median spending averages more than one. If central city school districts were to spend (per pupil) what typical school districts spend, they would spend less on average. This is so partly because urban school districts with poor residents have commercial property that generates revenue but no additional students, and also because most of the state and federal modifications to local school finance in the past 25 years have had the effect of increasing spending in districts with poor residents.

Hoxby goes on to spell out what this means:

The most important trend in the problems facing school finance is that most states have experienced fast growth in per-pupil spending but rather stagnant student achievement for the last 25 years (Hanushek and Rivkin, 1994). This disjunction between spending and student achievement is the reason that so much interest is focused on explaining why the same school quality might cost more or less under different systems of school finance. The current ‘‘predicament’’ of school finance is a failure of productivity rather than a failure of spending—for most states.

In other words, the problem is similar to our healthcare problem. We spend a lot of money on education (compared to what we used to) but we don’t seem to be getting any more educated.


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