Education

‘Essentially No Link’ Between State Education Spending and Student Performance

April 9, 2014

Brandon Dutcher

Even as various school-employee labor unions and other members of the public-education community converged on the state capitol March 31 for an “education funding rally,” a new study released two weeks prior suggests that “there is essentially no link” between state education spending and student performance.

Using a time-series regression approach, Cato Institute scholar Andrew J. Coulson “adjusts state SAT score averages for factors such as participation rate and student demographics, which are known to affect outcomes, then validates the results against recent state-level National Assessment of Educational Progress (NAEP) test scores. This produces continuous, state-representative estimated SAT score trends reaching back to 1972. The present paper charts these trends against both inflation-adjusted per pupil spending and the raw, unadjusted SAT results, providing an unprecedented perspective on American education inputs and outcomes over the past 40 years.”

Coulson gives state-by-state results, but he says “the overall picture can be summarized in a single value: 0.075. That is the correlation between the spending and academic performance changes of the past 40 years, for all 50 states. Correlations are measured on a scale from 0 to 1, where 0 represents absolutely no correlation between two data series and 1 represents a perfect correlation. Anything below 0.3 or 0.4 is considered a weak correlation. The 0.075 figure reported here suggests that there is essentially no link between state education spending (which has exploded) and the performance of students at the end of high school (which has generally stagnated or declined).”