Giving Compass' Take:

• Bruce D. Baker conducted research that concluded that increasing spending improved student outcomes, especially when spending went toward high-value improvements. 

• How should this information be incorporated into education policy? How much money is being spent on students in your state? 

• Find out how much state and local governments are spending on students

For decades, some politicians and pundits have argued that “money does not make a difference” for school outcomes. While it is certainly possible to spend money poorly, this viewpoint is strongly contradicted by a large body of evidence from rigorous empirical research. A thorough review of research on the role of money in determining school quality leads to the following three conclusions:

  1. on balance, in direct tests of the relationship between financial resources and student outcomes, money matters;
  2. schooling resources that cost money are positively associated with student outcomes; and
  3. sustained improvements to the level and distribution of funding across local public school districts lead to improvements in the level and distribution of student outcomes.

While money alone is not the answer to all educational ills, more equitable and adequate allocation of financial inputs to schooling provides a necessary underlying condition for improving the equity and adequacy of outcomes.

That money matters for improving school quality is grounded in the premise that having more money provides schools and districts the opportunity to improve the qualities and quantities of school- and classroom-level resources.

The primary resources involved in the production of schooling outcomes are human resources: quantities and qualities of teachers, administrators, support, and other staff in schools. Quantities of school staff are reflected in pupil-to-teacher ratios and average class sizes. Reduction of class sizes or reductions of total teaching or specialist caseloads requires additional staff, thus additional money, assuming the wages and benefits for additional staff remain constant. Qualities of school staff depend in part on the compensation available to recruit and retain the staff—specifically salaries and benefits, in addition to working conditions. Notably, working conditions may be reflected in part through measures of workload, such as average class sizes, as well as the composition of the student population.