Does Improved Student Achievement Require Increased Resources?

Published February 1, 2002

Public school administrators are increasingly being quoted as saying that improved achievement requires more resources. Cost per pupil, they maintain, is an excellent gauge for analyzing education investment and estimating return.

However, since previous increases in per-pupil expenditures have not been matched by increased student performance, a strategy of increasing resources may not, in fact produce the desired outcome.

Spending per student has increased markedly over time. According to the U.S. Department of Education, expenditures per pupil for the 1919-20 school year were $354, in constant 1999-2000 dollars. By 1960, real expenditures had more than quintupled. In the 1999-2000 school year, per-pupil expenditures were approximately $6,584–nearly 20 times as high as in 1919-20.

Where Did the Money Go?

Where have the resources gone? What results did they achieve?

Special education is often cited as a primary contributor to increased per-pupil costs. Special education programs have grown rapidly, and per-pupil expenditures for special education are more than twice those for regular education programs.

But even with its rapid growth and high cost, special education does not account for the bulk of school spending. The three principal causes of increased spending are:

  • falling pupil-teacher ratios (i.e., more teachers);
  • rising teacher salaries; and
  • increasing non-instructional expenditures.

For example, during the quarter-century between 1970 and 1995, per-pupil expenditures increased by more than three-fourths. During that period, the pupil-teacher ratio fell by one-quarter, the percentage of teachers with advanced degrees doubled, and the median number of years of a teacher’s experience nearly doubled (see Table 1). With more teachers in the system, and with teacher pay linked to increases in credentials and experience, higher per-pupil spending resulted.

Table 1
Resources in U.S. Public Schools, 1970 versus 1995
1970 1995
Real expenditure per pupil (in 1997 $) $3,645 $6,434
Pupil-teacher ratio 22.3 17.3
Teachers with at least a master’s degree 27.5% 56.2%
Median teacher experience 8 years 15 years
Source: Eric Hanushek, “Spending on Schools,” in A Primer on American Schools, Terry M. Moe, editor (Stanford: Hoover Institution Press, 2001). 

What Did the Money Buy?

Having more teachers per student, and more teachers with advanced degrees and more experience, might be expected to lead to better educational outcomes. The evidence, however, does not support that conclusion.

During the same quarter-century that these educational resources were being increased, student achievement remained flat (see Table 2).

Table 2

Achievement in U.S. Public Schools, 1970s versus 1996
1970s 1996
Average NAEP reading score, 17-year-olds (1971) 285.2 286.9
Average NAEP math score, 17-year-olds (1973) 304.0 307.0
Average NAEP science score, 17-year-olds (1970) 305.0 296.0
Source: U.S. Department of Education. National Center for Education Statistics. Digest of Education Statistics, 1999, NCES 2000-031.   

A Complex Relationship

The contradiction of increased resources and flat achievement suggests resource shortages may not be the sole culprit for low levels of student performance. This is not to say resources do not matter, but that there is no simple cause-and-effect relationship between the two.

Recent studies reinforce a disconnect between spending and achievement. For example, the American Legislative Exchange Council’s (ALEC) “Report Card on American Education, a State-by-State Analysis 1976-2000,” concluded

it is clear after studying the data and results that the policies of the past have failed to meet the educational needs of our country’s children. If we continue to spend more money on the existing educational system in an attempt to buy our way to better student achievement, we will condemn another generation of students to mediocrity.

The ALEC study showed no correlation between conventional measures of educational inputs, such as expenditures per pupil and teacher salaries, and educational outputs, such as scores on standardized tests. Increased funding simply does not translate into improved achievement.

For example, in the 1998-99 school year, Utah spent $3,807 per pupil, while Maryland spent $7,059. There is little evidence to suggest that equalizing resources between the two states would equalize achievement. In the 1998 National Assessment of Educational Progress, 31 percent of Utah’s eighth-graders scored at proficient or better in reading; despite the large discrepancy in per-pupil expenditures, Maryland had the same percentage of eighth-graders who scored at or above proficient, 31 percent.

Also, based on several standardized tests, the ALEC report rated Iowa (ranked 32nd in per-pupil expenditures) as having the top-performing public elementary and secondary schools in the nation, followed by Minnesota (ranked 14th in spending), and Wisconsin (ranked 9th). At the bottom of the achievement ratings were Mississippi (ranked 50th in per-pupil expenditures), Washington, DC (ranked 5th), and Louisiana ( ranked 39th).

Expenditures per student have increased over time, and those increasing resources have been spent on a wide range of touted reforms: increasing the level of teacher education, increasing teacher experience, and reducing student-teacher ratios. The last three decades, however, do not reflect the desired outcomes: Student achievement has remained flat. Nationwide per-pupil expenditures are expected to increase even further over the next several years, from approximately $6,600 in 1997 to $7,600 in 2007, an increase of 15 percent.

Better Spending, Not More

If increased resources are not at the heart of improved student achievement, what is?

One possible answer is that resources need to be allocated differently rather than simply increased.

For example, the present teacher pay system provides no way to distinguish between a good teacher and a bad teacher. Both can expect the same salary and promotion pattern, regardless of whether the performance of their students is mediocre or outstanding.

The evidence gives us no reason to believe that increased resources alone are the solution to poor student achievement. Incentives may be their necessary partner.

Hanna Skandera is a public affairs fellow at The Hoover Institution. Her email address is [email protected]. Richard Sousa is an associate director at The Hoover Institution. His email address is [email protected]. ©2002 Hanna Skandera and Richard Sousa. Reprint requests should be directed to the copyright holders.