Education Spending Myth

Jay Greene of the Manhattan Institute: (via Maggies Farm)

is the most widely held myth about education in America--and the one
most directly at odds with the available evidence. Few people are aware
that our education spending per pupil has been growing steadily for 50
years. At the end of World War II, public schools in the United States
spent a total of $1,214 per student in inflation-adjusted 2002 dollars.
By the middle of the 1950s that figure had roughly doubled to $2,345.
By 1972 it had almost doubled again, reaching $4,479. And since then,
it has doubled a third time, climbing to $8,745 in 2002.

the early 1970s, when the federal government launched a standardized
exam called the National Assessment of Educational Progress (NAEP), it
has been possible to measure student outcomes in a reliable, objective
way. Over that period, inflation-adjusted spending per pupil doubled.
So if more money produces better results in schools, we would expect to
see significant improvements in test scores during this period. That
didn't happen. For twelfth-grade students, who represent the end
product of the education system, NAEP scores in math, science, and
reading have all remained flat over the past 30 years. And the high
school graduation rate hasn't budged. Increased spending did not yield more learning.

There is a lot more good stuff in the article, from class size to teacher pay.  I would observe that he misses one component of teacher pay -- that they tend to have higher than average benefit packages, which makes their jobs even more competitive with other professionals.  I covered much of the same ground 18 months ago in my Teacher Salary Myth post (which still earns me some good hate mail).


  1. AustinContrarian:

    Teachers are underpaid if and only if we are not getting the quality we want with the pay we're offering. The debate about whether teacher salaries are competitive with other salaries is irrelevant -- it's just the "value" theory of pricing, which is bunk.

    Let's suppose that we are offering "too much" money,i.e., more than is necessary to attract the number of qualified teachers we need. We would expect to see signs of rationing, say a long waiting list for jobs. We generally don't see that, at least not that I've heard, at least not in Texas. In other words, schools are paying roughly the market clearing price.

    I imagine most of the increase in education costs over the years is due to rising teacher pay. Maybe we're paying for more quality than we want. Perhaps we could get the same test scores while paying teachers a lot less. I doubt it. Teacher pay has had to stay competitive with the pay in other professions, the teachers' opportunity cost.

    I don't mean to suggest that we're not wasting a lot of money on education. The Department of Education is just one big boondoggle, IMHO. States have massive bureacracies devoted to maintaining wasteful top-down control. My local school district spends one out of every three dollars on "administration," largely responding to bureacratic mandates from the state and the federal government.

  2. AustinContrarian:

    Sorry, my second sentence was sloppy. I should have said "The debate about whether teacher salaries are _fair_ when compared with other salaries is irrelevant. . ."

  3. Ray G:

    On spending itself, teachers are making a decent enough living, it is the enormous bureaucracy that really soaks up the dollars. Then there are other fringe elements, that were not necessarily common 30, 40 and 50 years ago.

    Swimming pools to air-conditioning, huge stadiums for some, facilities for multiple teams and sports, etc.

    On academic performance itself, the methods of teaching have changed drastically, and we have much lower performance to show for our troubles. Period.

    I taught high school algebra for two years in a private school that was supposed to be immune to the troubles of modern day educator-think, but alas, it wasn't. It was far better than the public schools, but we still had to deal with the whole idea of kids coming to us with a fully intact self-esteem, and how we shouldn't do anything to hurt that self-esteem. And so on.

    The only things that will fix education are parents who care, and their ability to choose. Two extra years of math for AZ high schools, longer school days, uniforms, etc, all sound good, and can make a difference, but if mom and pop don't care, don't expect junior to either. If those three people don't care, the most sympathetic teacher in the world can't make a difference.

  4. Brad Warbiany:

    The question is not whether we're paying teachers enough to get the best teachers. The question is whether the system is structured such that teachers can't do what needs to be done to teach students.

    As Ray points out above, we're spending more on education, but I'd wager a lot of that money is being squandered on things that have little to do with education. We can spend all the money we want, and pay teachers $100K/year, but unless we fix the structure, we won't see improvement.

    Choice will tell parents that it is their responsibility to care. Right now we have school choice, in that if you are affluent enough to move into the right neighborhood (and choose to move into that neighborhood), you get good schools. Part of what makes those schools good is that other parents in the neighborhood also moved there to get their kids into good schools, and they exert pressure on both the kids and the school administration to make sure that the schools stay good.

    But to implement true school choice, you need to change the structure. And there are a lot of political incentives ($$$) to keep the current structure.

  5. Lenny:

    I did detect one flaw in the referenced article with respect to the "Rich School Myth". It doesn't compare apples-to-apples when it compares the private school tuition of $4689 with the $8032 per student that is spent in public schools. Most, if not all, private schools are Non-Profits that also actively solicit donations to supplement the tuition. And so it would be more correct to compare what the private schools actually spend per student rather than the tuition.

  6. Steve:

    Can you post some of the hate-mail you've gotten (redacted is fine)?

    Reading the average pro-teacher letter to the editor is funny. Letters that haven't been selected as exemplars and then edited by the paper must be truly hilarious.

  7. TC:

    "that they tend to have higher than average benefit packages,"

    Now you've gone and done it! Spoken the unspeakable, boy are you in trouble now!

  8. Zoran Lazarevic:

    I wonder if the NAEP test scores from 1970's and 2002 are apples-to-apples comparisons. Are the tests harder today? In that case, the same score would mean that students know more.

    A reply to AustinContrarian: teachers do have licensing and other obstacles which equate to rationing - i.e. they are indeed paid a lot of money. In New York City, it is very hard to become a teacher in a public school (need public school experience in order to become teacher, need to become teacher in order to get experience).

    Update to Coyote's teacher salary calculation: teachers do have free summers, but they also work at home to prepare lessons and to grade papers - in addition to 8 hours at school. On average, I assume their annual salary reflects 2000 hours of work. I am not a teacher, so I can't say this for sure.