Monday, July 27, 2009

Education spending

The Economix blog has the states ranked by their K-12 education spending:

Here is a website that compares the states on education performance. Let me know if you can find any real correlation between spending and performance.

Update: A graph I made with the K-12 education performance listed on the aforementioned site but listed in the same order as the graph above by spending:

Not really seeing a correlation.

Update: More on spending vs. test scores here.


Nate said...

I'm not sure - it looks close. I'd be interested to see that data thrown into SPSS...

David said...

While it's clear that higher across-the-board spending doesn't inflect educational performance, we should focus on how the money is spent in addition to the overall number (I'm pretty sure you'd agree with this). A couple points:

1) The $4.5 billion to be used by the Dept. of Education is relatively small compared to other recent government outlays (although the argument of "but look at all the money everyone else is getting, so we should get money too" certainly doesn't justify blind spending). If there's an area that we should overspend rather than underspend, then it's education. Yes, some money will always be misspent, but given the choice between a) letting an underprivileged kid have his own textbook (as opposed to sharing it with others, which happens) and sucking up a bit more inefficiency/waste vs. b) sharing that textbook and reducing administrative costs - I choose option "a" every time." True, it's difficult to stomach and reducing waste should be a huge part of our educational goals, but education is simply too important of an issue to pinch pennies.

2) The spending is "all carrot and no stick," as Arne Duncan said. True, one could argue that the criteria by which states can "win" money might not be the most appropriate for every single state (for example, states that can't react fast enough to set up pay-for-performance systems will be penalized by not getting funds in "round 1"), but without a strong incentive to change, teachers unions and other ingrained interests will continue to impede any progress.

This is an important point - vested interests currently (e.g. teachers unions) don't have an incentive to change for the benefit of kids' education. No Child Left Behind was a good policy in theory, but many school districts opted out because 1) there was no monetary incentive to comply ("unfunded mandate"), and 2) there was a disincentive to be beholden to federal policies given the unfunded mandate.

So, there has to be a carrot, and this is what the $4.5 billion is. If states don't want to participate, they don't have to.

A simple example from another policy realm, the EU's accession criteria gives incentives for countries to pass trade reforms, etc. Countries that lag behind in these reforms see the benefits that their peers reap, and then are pressured (or "incented") into undertaking these reforms themselves.


David said...

3) Two of the biggest "carrots" to be used are expanding charter schools and increasing teacher pay-for-performance - two reforms that are decidedly free-market (right?).

In my mind, pay-for-performance is the big issue here. One of the most (if not THE most) powerful men in Alabama is Paul Hubbert, the boss of the Alabama teacher's union. He's almost single-handedly derailed any movement toward pay-for-performance in the state, not to mention other sensible reforms that would threaten the cushy, tenured jobs of many incompetent educators. The only way to loosen his grip is to give an obvious incentive for legislators to stand up to him. $4.5 billion divided by 51 states (John Kyl be damned for derailing DC statehood) won't go a long way toward giving state legislators this incentive, but it's a start.

One last point - yes, education spending is bloated. It's a huge problem, and cutting costs is just as much a solution as giving incentives to combat vested interests. DC spends the third-most per pupil in the nation, but is obviously one of the worst performing systems. On the other hand, Alabama ranks near-last in just about every education measure, and our spending-per-pupil is also near the bottom. Can we say that there's a causal relationship between higher spending and lower performance? Not really. Rather, it's likely a matter of smart spending. Unfortunately, getting to "smarter spending" requires kicking some sense into teachers unions, etc. Money is the most obvious "kick" I can think of that doesn't significantly hurt students in the short-term.

And... now I'm tired from writing too much. Tell me where I'm wrong (I'm sure I am in some regard).

Colin said...

Dave, thanks for the comments. I think that you are basically correct in that how money is spent is far more important than the amount. Really the question -- like so many issues -- is how best to allocate resources (i.e. taxpayer money).

To promote more efficient spending of the money I believe that some type of competition needs to be injected into the system as monopolies are synonymous with waste and a lack of response to the consumer (in this case students and parents).

I proposed some thoughts on the matter here:

Essentially we need things like charter schools, vouchers, education tax credits and the like to give students and parents as much choice as possible. Let the good schools prosper and the poor schools fail. Let the consumers separate the wheat from the chaff. Competition is the key.

David said...

I posted some comments to your previous post on education reforms:

On a partially-related note, I just read a study (for school, of course) on how China has managed to develop without complete liberalization, privatization, or democratization. Here's a link to the study:

It takes a while to read the whole thing, but basically it's about how we (those looking to learn lessons) should consider "transition institutions" that are more politically feasible that are complete, dramatic solutions. This is relevant to our discussion because we're considering what's theoretically ideal vs. what's feasible in the short-term (you talked about this tension in your post on education in 2007). In the study, read the text starting with "to understand how reforms work in developing".

Instead of blogging, I must go back to being a student now...