We Spend Too Much on Education, and Get Too Little

Published July 7, 1995

Why does the world’s most productive country have the world’s least productive school system?

The U.S. now spends more per student on public elementary and secondary education than any other advanced country belonging to the Organization for Economic Cooperation and Development (OECD). Yet, international comparisons show our students trailing behind even many undeveloped countries in mathematics, science, geography, foreign languages, and other subjects.

At least three reasons account for such low productivity in the U.S.

First, by historical and world standards, the conditions of American children are alarming. Statistics show that rates of child abuse, single parenthood, teen pregnancy, youth delinquency, homicide, and suicide are all much higher in the U.S. than in other countries. Research has linked each of these child-rearing deficiencies to poor academic achievement.

Second, the Tenth Amendment to the U.S. Constitution makes schools a state responsibility, resulting in a system with varying degrees of local school board and teacher discretion. Though it has many advantages, our decentralized system of education is mismanaged in many ways. For example, the U.S. spends 25.1 percent of its public school budget on non-teaching staff, more than twice the average of other countries surveyed by the OECD.

Such excessive, largely administrative, costs stem primarily from the federal government’s clumsy efforts to interfere with and subsidize local schools. Although it pays only 7.6 percent of school costs, the federal government imposes many mandates and regulatory burdens on state departments of education and local school boards. In doing so, the U.S. Department of Education creates a great deal of red tape that has little to do with learning.

Federal rules, for example, require schools to sort students into arbitrary categories of poverty, race, ethnicity, bilingualism, mental disabilities, and poor achievement. Research convincingly shows that students are better off in regular classrooms rather than in costly segregated programs created specifically for such groups. Under current policies, however, the more students that administrators categorize as mentally disabled, bilingual, or poor achievers, the more federal money flows into their schools. The incentives, plainly, are perverse.

Finally, state legislatures have increasingly centralized the financing and control of public schools. This has put greater power into the hands of teachers unions and other producer interest groups. Such groups play on American sympathies for children to gain hikes in taxes and spending on education and contractual guarantees of job security. None of these “reforms” actually benefits children.

During the long period of U.S. economic growth and integration of immigrants, school boards represented local citizens who lived near the schools. Knowing the teachers, students, and community preferences, school board members used locally raised money to satisfy local preferences. The result was a high degree of scrutiny by taxpaying residents and consequently a high level of accountability.

State legislators, however, increasingly centralized financing and control during the half century prior to 1990. During this time, as states paid a growing share of school costs, the number of school districts fell from 117,108 to just 15,367. The average number of students served by each school board member rose by a factor of nearly ten, and average school enrollments rose from 127 to 653. Local board members and even principals could no longer hope to know each student well enough to directly monitor and direct his or her education.

What is to be done? In the U.S. more than in any other country of the world, free markets have wondrously and efficiently brought together entrepreneurs, producers, and consumers to produce an endless array of high-quality goods and services. There can be little doubt that our system of education desperately needs the productivity-enhancing influence of the market.

Dr. Herbert J. Walberg is Chairman of the Board of Directors of The Heartland Institute and Research Professor of Education at the University of Illinois at Chicago. He is the author and editor of numerous books and scholarly articles on the factors of productivity in schooling.