Has increased education spending in schools improved student performance in test scores?

When I want a raise, I work harder, but these teachers hold up signs
When I want a raise, I work harder, but lazy teachers quit working to hold signs

One of my friends has been having a debate with one of his former teachers about whether spending more money on government-run education improves tests scores. He tried posting some evidence, but she just dismissed that by claiming:

  1. If we hadn’t spent more money, then the student test scores would have gone down instead of staying the same.
  2. Most of the money that government spends on education goes to vouchers and private schools, not public schools
  3. Economists at prestigious think tanks like that Cato Institute, the Heritage Foundation, and the American Enterprise Institute cannot be trusted to accurately cite the Bureau of Labor Statistics and the National Center for Education Statistics because of the Koch Brothers
  4. You can’t compare the test scores of American students with the test scores of Asian students who outperform them, (for less government spending), because math is different in Asia compared to America

Let’s look at some data and see if her arguments are correct.

Does more spending mean higher student performance?

National Review reported on data collected in the National Assessment of Educational Progress, which spans all 50 states.


Comparing educational achievement with per-pupil spending among states also calls into question the value of increasing expenditures. While high-spending Massachusetts had the nation’s highest proficiency scores on the National Assessment of Educational Progress, low-spending Idaho did very well, too. South Dakota ranks 42nd in per-pupil expenditures but eighth in math performance and ninth in reading. The District of Columbia, meanwhile, with the nation’s highest per-pupil expenditures ($15,511 in 2007), scores dead last in achievement.

The student test scores are dead last, but National Review notes that “according to the National Center for Education Statistics, Washington, D.C. was spending an average of $27,460 per pupil in 2014, the most recent year for which data are available.” They are spending the most per-pupil, but their test scores are dead last.

CBS News reported on another recent study confirming this:

Decades of increased taxpayer spending per student in U.S. public schools has not improved student or school outcomes from that education, and a new study finds that throwing money at the system is simply not tied to academic improvements.

The study from the CATO Institute shows that American student performance has remained poor, and has actually declined in mathematics and verbal skills, despite per-student spending tripling nationwide over the same 40-year period.

“The takeaway from this study is that what we’ve done over the past 40 years hasn’t worked,” Andrew Coulson, director of the Center For Educational Freedom at the CATO Institute, told Watchdog.org. “The average performance change nationwide has declined 3 percent in mathematical and verbal skills. Moreover, there’s been no relationship, effectively, between spending and academic outcomes.”

The study, “State Education Trends: Academic Performance and Spending over the Past 40 Years,” analyzed how billions of increased taxpayer dollars, combined with the number of school employees nearly doubling since 1970, to produce stagnant or declining academic results.

“The performance of 17-year-olds has been essentially stagnant across all subjects despite a near tripling of the inflation-adjusted cost of putting a child through the K-12 system,” writes Coulson.

Where did the numbers come from? The Koch Brothers? No:

Data from the U.S. Department of Education incorporating public school costs, number of employees, student enrollment and SAT scores was analyzed to explore the disparity between increased spending and decreasing or stagnant academic results.

Well, at least government-run monopoly schools outperform private private schools, right? No:

[…][P]rivate schools, where students excel over public school peers, …manage to operate at budgets about 34 percent lower than taxpayer-funded schools, US Finance Post reports.

Public schools spend, on average, $11,000 per student, per year.

Coulson noted an Arizona study he conducted which showed that the average per-pupil spending at private schools was only about 66 percent of the cost of public schools.

A more recent state-specific study from 2016 found that this is still the case.

This problem gets even worse when you look at test scores from other countries, where even less is spent on education.

As the Washington Post reported at the end of 2016:

When it comes to math, U.S. high school students are falling further behind their international counterparts, according to results released Tuesday of an ongoing study that compares academic achievement in 73 countries. And the news is not much better in reading and science literacy, where U.S. high schoolers have not gained any ground and continue to trail students in a slew of developed countries around the globe.

In the latest Program for International Student Assessment (PISA) measuring math literacy in 2015, U.S. students ranked 40th in the world. The U.S. average math score of 470 represents the second decline in the past two assessments — down from 482 in 2012 and 488 in 2009. The U.S. score in 2015 was 23 points lower than the average of all of the nations taking part in the survey.

More money is being spent, but the scores are DECREASING.

Now, why is it that increased government spending in the public school monopoly doesn’t improve student performance? Well, one reason is that very little of the money makes it to the classroom.

Where does all the money go?

Let’s look at four places where the money spent on the government-run public school monopoly ends up.


First, a lot of it gets paid to administrations who implement politically correct programs designed to turn the impressionable young people into little secular socialists.

Here’s a helpful chart from the American Enterprise Institute:

Where does taxpayer money spent on the public school monopoly go?
Where does taxpayer money spent on the public school monopoly go?

I guess if a school wants to make things like Planned Parenthood sex education and LGBT indoctrination into priorities, then they would need more administrators.


Second, education employees get enormous pensions, which are paid by taxpayers and negotiated by their unions. You would never see pensions this large in the private sector.

This is from the leftist Brookings Institute, from 2014:

This figure shows we now spend nearly $1,100 per student on retirement benefits. The average public school student teacher ratio is 16 to 1. So we are spending about $17,000 per year per teacher in pension contributions.

[…]The National Council on Teacher Quality writes,

In 2014 teacher pension systems had a total of a half trillion dollars in unfunded liabilities—a debt load that climbed more than $100 billion in just the last two years. Across the states, an average of 70 cents of every dollar contributed to state teacher pension systems goes toward paying off the ever-increasing pension debt, not to future teacher benefits (p. iii).

While we are spending a huge amount to fund teacher pensions, most of that spending doesn’t go to attracting the best teachers. It’s paying off past debts.

We can’t hire good teachers, because all the education spending of today is paying for the gold-plated pensions of yesterday.

That was 2014. The numbers are even worse today. Teachers contribute very, very little to their pensions, but the benefits are enormous compared to what the private sector taxpayers get in Social Security. (Which is going to be bankrupt by 2034, as reported by the far-left PBS)

Teacher training

Third, a lot of it is spent on teacher training, because apparently teaching multiplication, Shakespeare or geography changes every year, so the teachers need tens of thousands of dollars in annual training.

The Washington Post reports on a recent study:

A new study of 10,000 teachers found that professional development — the teacher workshops and training that cost taxpayers billions of dollars each year — is largely a waste.

The study released Tuesday by TNTP, a nonprofit organization, found no evidence that any particular approach or amount of professional development consistently helps teachers improve in the classroom.

[…]The school districts that participated in the study spent an average of $18,000 per teacher annually on professional development. Based on that figure, TNTP estimates that the 50 largest school districts spend an estimated $8 billion on teacher development annually. That is far larger than previous estimates.

And teachers spend a good deal of time in training, the study found. The 10,000 teachers surveyed were in training an average of 19 school days a year, or almost 10 percent of a typical school year, according to TNTP.

Maybe if more of the money spent on education were spent directly on hiring teachers, then we would see an improvement. Unfortunately, a lot of the money meant for teachers goes to the teacher unions. How do they spend that money?

Political Contributions

Finally, this is from OpenSecrets.org, concerning political contributions made in the most recent election cycle:

Top Political Contributors in 2016 election cycle
Top Political Contributors in 2016 election cycle

The two largest teacher unions came in at #9 and #11. Most of their donations go to Democrat Party. Democrats believe (against the evidence) that spending more money in the government-run public school monopoly will improve student performance on tests.

So, what’s the solution?

The solution is that we abolish the federal Department of Education, which has done nothing to improve the quality of education for students. We need to push the education of children back down to the state and local levels. We need to empower parents to choose the schools that work best for their children by giving parents vouchers. We need to increase tax-free education savings accounts to help parents with school expenses. We should also give free college tuition to homeschooled students who are admitted to STEM programs at any college or university. We can take the money from the pensions of the union administrators, after we abolish ever single public sector teacher union in the country, and seize all their assets and pensions. If that’s not enough money, then we can seize all the pensions of Department of Education employees – a just punishment for their failure to produce results while still taking taxpayer money.

Finally, we should allow people who already have private sector experience doing things like STEM to become teachers. Let’s face it: the departments that grant Education degrees have the lowest entrance requirements, and produce the least competent adults. People with years of private sector work experience teach better than people with Education degrees. Let’s open up teaching to people who have experience in the private sector doing software engineering, statistics, nursing, etc. and then we’ll have qualified teachers.

4 thoughts on “Has increased education spending in schools improved student performance in test scores?”

  1. Shame on these DOE bureaucrats. I do not know if Trump’s appointed DeVos will do anything to change this situation in US education … Teachers unions demanding more of the plundered taxpayer money; the increase in number of Adminstrators! Wow! Every parent should take copies of this article to next Board of Education meeting. The parents in states where teachers strikes are occurring should go to the picket lines and demand that they get back to work! We took our kids out of the indoctrination camps and now homeschool….one in college now, another to soon follow.


    1. I think that’s what most people find surprising. They should be using that money to hire better teachers. And the pay should be based on merit, not on tenure. Pay for performance and you get performance.


  2. I was going to write something up but I was hanging out with my kids for the last week or so (4/14-4/23 was school “April vacation”).

    1. There is incredible *lack* of transparent in terms of school expenditures. Massachusetts is pretty good in that if one is a state employee, one’s salary is listed on a public database, but outside of that, many states have not made it easy to find out what the expenses are and so on. Moreover, many schools underreport the amount spent. I’m not sure what the exact motivation is … maybe if you’re too low, to beg for more money and if you’re too high, to not lose funding?

    2. Schools receive funding from different sources: federal funds, state funds, local funds.
    In MA for instance, we receive relatively low federal funding, and most of the funding is at the local level (= from property taxes, commercial taxes if applicable).

    It’s well-known in my state to go attend school at a wealthier/higher-income town (the top 10 schools districts/regions include Dover-Sherborn, Concord-Carlisle, Weston, Lexington, Wayland, Westford, Newton, Wellesley, Manchester-Essex). All of these have six figure median household incomes and per capita income > $75k. There’s some degree of correlation between money towns and test scores.

    3. As you point out in your second point, I suspect that much of the benefits goes towards pension — which is a huge problem.

    I took a MOOC 5 years ago, “The Finance of Retirement and Pensions” taught by Stanford GSB’s Joshua Rauh. The term team project was to assess any one of the pension plans in our state, using their balance sheets, SSA life expectancy tables, pay-in and payment structures(, modeled rates of return for equities, annuities, fixed income, etc.) Every group concluded that pensions were unsustainable under the current models — Rauh published some of his work and initial findings in 2011 (Policy Options for State Pension Systems and Their Impact On Liabilities) and last year (2017, “Hidden Debt, Hidden Deficits”, published by Stanford’s Hoover Institute).

    You can find it here: https://www.hoover.org/sites/default/files/research/docs/rauh_hiddendebt2017_final_webreadypdf1.pdf

    “Despite the introduction of new accounting standards, the vast majority of state and local governments continue to understate their pension costs and liabilities by relying on investment return assumptions of 7-8 percent per year. This report applies market valuation to pension liabilities for 649 state and local pension funds. Considering only already-earned benefits and treating those liabilities as the guaranteed government debt that they are, I find that as of FY 2015 accrued unfunded liabilities of U.S. state and local pension systems are at least $3.846 trillion, or 2.8 times more than the value reflected in government disclosures. Furthermore, while total government employer contributions to pension systems were $111 billion in 2015, or 4.9 percent of state and local government own revenue, the true annual cost of keeping pension liabilities from rising would be approximately $289 billion or 12.7 percent of revenue. Applying the principles of financial economics reveals that states have large hidden unfunded liabilities and continue to run substantial hidden deficits by means of their pension systems.”

    This guy is a quantitative economist (BA degree in economics, magna cum laude with distinction, Yale; Ph.D., Economics, MIT; taught at UChicago Booth & Kellogg before Stanford GSB) — fact based.

    In any case, pension plans need to be overhauled.

    4. We’ve looked at private and homeschooling options. (What’s interesting about our state is that there are many non-religious homeschooling cooperatives.)

    Many people will accuse certain groups of people of not wanting to foot the bill or that the amount is too much. I say, where you spend your money demonstrates your true values. Our local Evangelical Protestant Christian private school costs about $9k per kid (K-5), $11k (grades 6-8), and $13k for high school, per year. That’s not a huge amount — but it is a cost. [In contrast, MA’s Department of Elementary and Secondary Education indicates that the 2017 total per pupil expenditure was $15,955.88.]

    It’s also far more efficient spending than public schools and the private schools outperform public schools even here in the “most educated state in the Union” (and has the highest OECD PISA scores). We visited a few private school open houses and the kids impressed us. The Montessori school (much more secular/secular humanist) had kids in first- through third- grade learning about eons, eras, periods, and epochs (of course, I would love to talk about the Cambrian explosion).

    The local Christian school had kids in first-grade learning Latin. Middle Schoolers have core classes in Math, English, Lab Science, History, and Bible plus Latin, Robotics and Coding, Public Speaking and Debate, Drama (Theatre Appreciation), Phys.Ed. and Health, Art, and Study Skills.

    If 15 kids pay $15k (=$225k), that’s a lot of money towards a teacher’s salary and activities and even renting a place.

    5. You’re also right that public education spending goes towards salaries and benefits and a lot goes towards unions.
    For full-time teachers and “more than half-time teachers,” between the MTA, MCCC, and NEA, it’s nearly $1000 per year per teacher. Multiply that by some nearly 70,000 “full-time equivalent” teachers = $70 million per year. That’s a lot of salaries for union leaders … or maybe a lot to spend on lobbying.

    6. More important than spending, more important “teacher development,” more important than the choice of school, it should not surprise anyone —

    Both parents being married and actually parenting.
    Both parents being involved and interested in a child’s education.


    “For children supported by a single parent, most often with a missing dad, the stats take a drastic downward turn.

    Kids with absent fathers are twice as likely to repeat a grade, twice as likely to end-up as a drop out.” — from the MIT based “The Review of Economics and Statistics” (August 2010, I believe), not some right-wing blog.

    Liked by 1 person

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