Dropout Nation

Who knows what Virginia State Sen. Chap Petersen was expecting when he attended a Back to School night for his four kids at a Fairfax County school? But what he saw pleased him not one bit. The Democrat’s complaint brings up one of the most-fractious issues in discussions around the direction of American public education: Do schools get enough money to help kids succeed?

On Facebook, Petersen expressed dismay that Fairfax County school leaders deemed it appropriate to force families to watch a five-minute video asking them to lobby state legislators for additional funding. While sympathetic to the district’s call, Petersen declared that “forcing a captive audience of parents to watch a five-minute political commercial before meeting their kid’s teacher is not the answer.” That the “video’s facts were highly selective” – including leaving out news that Fairfax County gained large increases in state funding as well as gave school leaders 60 percent pay raises – also bristled the state legislator.

But there’s a reason why Fairfax County played that video: Because it works. Twice as many upper-income Americans as lower-income Americans tell pollsters that “lack of financial support” is the biggest problem facing schools (28 percent vs. 14 percent). Because affluent families have influence in American politics, teachers’ unions and school districts use their considerable resources to win their support. As Dropout Nation noted last year, National Education Association and American Federation of Teachers spend $700 million annually to shape education discussions.

But as Petersen points out, there’s far more to the story than the claims that public education systems are underfunded. Can America’s traditional public schools use resources more-effectively? Absolutely. Can more resources help schools improve the odds for our children? The answer to question number two is more-qualified than the first. Which is why Sen. Petersen had more than a few reasons to look askance at the video he was shown that night.

The best, though, imperfect way, to understand how well America is spending money on education is look at how much other nations – most-notably highly-touted Finland and South Korea — spend on their schools.

There are numerous differences between those two systems, from class size (smaller in Finland, bigger in South Korea), to levels of school choice (more in Finland, less in South Korea), to testing (recently less in Finland after decades of central testing; continued heavy testing in South Korea), to the role of unions in education policy and practice (collaborative in Finland, adversarial in South Korea).

What they have in common, however, is that they spend less than the United States. Finland’s per-pupil spending of $10,905 in 2011 is lower than the $15,345 spent by the United States; South Korea’s $8,382 per-pupil is 83 percent lower. Based on comparisons with those two countries alone, it becomes clear that money isn’t the main problem in American public education.

But traditionalists tend to dismiss those facts – and the results achieved by both countries – by pointing to the fact that America has different prevailing conditions – from levels of poverty to the legacy of slavery and immigration – than Finland and South Korea. But that argument falls apart when you look at the performance of the nation’s public charter schools.

Earlier this year, Stanford University’s Center for Research on Education Outcomes (CREDO) released an extensive study based on six years of data on the performance of charters in 41 urban communities. From that data, CREDO concluded that “urban charter schools in the aggregate provide significantly higher levels of annual growth in both math and reading” than traditional public schools – results that translate to “roughly 40 days of additional learning per year in math and 28 additional days of learning per year in reading.”

The study also concluded, “gains for charter school students are larger by significant amounts for Black, Hispanic, low-income, and special education students in both math and reading. … Gains for these subpopulations amount to months of additional learning per year.” Further, the study showed that the charter sector is steadily improving, with significantly larger gains at the end of the time period studied than at the beginning.

These results, by the way, come even though charters spend $1,800 per-pupil less than traditional public schools.

Traditionalists claim that charters succeed by taking the best students or pushing out the worst students. Research since 2009 has empirically rejected these claims. But the most decisive repudiation emerged recently from analysis of the charter sector in New Orleans.

Since the city of New Orleans moved to a charter system, Tulane scholar Doug Harris was able to assess the impact of a system-wide move to charter schools by comparing post-Katrina performance in New Orleans to that of nearby Baton Rouge (which also suffered terrible hurricane damage but did not switch to an all-charter model). Harris wrote of the New Orleans result that “on average student outcomes is quite positive by just about any measure. … We are not aware of any other districts that have made such large improvements in such a short time. The effects are also large compared with other completely different strategies for school improvement, such as class-size reduction and intensive preschool.”

The evidence shows that other nations provide high-quality education to their children while spending significantly less money than spent in America – and that charter schools, with little in the way of bureaucracies that typify traditional districts, deliver significantly better results than their counterparts. We even know from the New Orleans experience that charter schools can improve student achievement across an entire system, at more significant levels than expensive interventions such as class size reduction and universal preschool.

But does that mean American public education doesn’t need more money? That is a different question entirely.

In 1966, President Lyndon Johnson commissioned Professor James Coleman to conduct research as to how much school funding mattered to student achievement. To Coleman’s shock and that of many other liberals, the answer that emerged was “very little if any.”

Over the following five decades, scholars pressure-tested those assumptions in the context of rapidly rising school budgets. As Stanford’s Eric Hanushek concluded in 1989, “Two decades of research into educational production functions have produced startlingly consistent results: Variations in school expenditures are not systematically related to variations in student performance.”

How is this counter-intuitive result possible? Don’t kids in rich areas do better? Isn’t it because of all the fancy buildings they have? Well, no. Kids in rich areas have lots of advantages in life. Those advantages, not school funding, make most of the difference for those children.

But this doesn’t mean that money can’t help. Neither Coleman nor Hanushek have ever said that money never matters. In fact, within the last decade, research shows that money spent properly can be helpful in improving achievement.

Three years ago, the American Federation of Teachers’ Albert Shanker Institute released a study by Rutgers University Professor Bruce Baker that concluded that money can help children and that they can’t be helped without it. Baker reanalyzed the same sources that Hanushek used, but dismissed some as methodologically flawed, while choosing to emphasize others.

Earlier this year, however, a team led by Northwestern University Professor Kirabo Jackson reached similar conclusions in a study that ran in Education Next. Isolating the effects of additional funding resulting from court rulings in school funding torts, Jackson and his team realized that the dollars served as an exogenous shock that could be isolated from the advantages wealthier students already had. They analyzed concluded that in this specific case, additional resources helped improve results for low-income students.

A careful review of both reports, however, reveals three important caveats. First, “can” is not the same as “will” or “must.” As Coleman and Hanushek observed, money is usually spent in ways that don’t make a significant difference for children. Fancy offices for central headquarters or gold-plated and retroactive pension increases do little for current students. As Hanushek notes, Jackson’s team based their conclusions on student achievement results from 1970 to 2010, during which time real per-student spending increased by 150 percent. While results for students have improved during that time, the improvements have been very small compared with the spending increases, and the improvements have been mostly concentrated in places that have adopted aggressive non-spending reforms.

Secondly, what can be done at scale with more money is often much less than what can be done better with existing funds. While any effort at precision will lead to a false sense of certainty, the scale of the difference is clear. For example, the CREDO report showed that urban charter students obtained the equivalent of 40 extra days of math instruction, which would add up to 480 days — or more than 2.6 school years — over the course of 12 years. By comparison, Jackson concludes that a 10 percent increase in funding would result in .44 years of extra schooling for poor children. A zero-cost investment, therefore, would deliver about six times the impact of the $60 billion additional national investment that Jackson’s team suggests.

Finally, even Baker and Jackson concede that what matters most is how money is spent. As seen in school funding torts, traditional district bureaucracies don’t immediately capture court-ordered increases in funding. New money goes first to instructional and support services, at higher levels than traditional budgets. But ultimately, bureaucracies find ways to absorb the money, a fact that my colleague Sandy Kress will discuss in tomorrow’s commentary. This provides further weight to the argument of school reformers that new money should be allocated to what works – especially via the mechanism of Parent Power and School Choice to make sure the money stays focused on kids. [Ulrich Boser of the Center for American Progress, by the way, hints to this in his studies of school spending.]

Petersen has good reason to be skeptical – and so should we. America’s schools are not underfunded. There’s nothing wrong with using new money to help all children succeed. But we can do much, much more with the dollars we have, and do it in ways that are focused on kids.