In total, public education spending in the United States totaled $1.13 trillion, and currently accounts for 5.37 percent of gross domestic product. The extraordinary amount of funding and resources poured into public schools in the United States, combined with the fact that education is a widely debated, important issue for voters and a source of endless analysis for scholars, raises the all-important question. whether the money distributed to public education leads to an accumulation of human capital within students that at least offsets the cost. This gut reaction instinct says that the more funding available to a public school, the better off the students should be in the school, a reality that should be reflected in meaningful measures of student outcomes.
While the Coleman Report reached some notable conclusions about racial inequality and the lack of opportunity for minority groups in the United States, its final conclusion is the one that has been of most importance to those interested in the question of the effect of government spending. on the students. results. This thesis contributes to scholarship on the relationship between educational expenditures and student outcomes by examining twenty-two public school districts in the St. Louis metropolitan area.
LITERATURE REVIEW
Hanushek (2009) expresses criticism of a federal stimulus package aimed at pulling the nation out of recession, writing that the stimulus will "pump more money into (schools), but the structure of the package guarantees that most of the money will be allocated and spent in the same way it has always been spent.” In his critique, Hanushek raises the point that per-student spending has increased dramatically in the decades preceding the stimulus with no measurable effect on student achievement.William Blankenau and Gabrielle Camera (2007, page 505) raise a slightly different concern regarding the allocation of funds, and suggests that "If one views students as largely passive recipients of the schooling process, then poor educational outcomes simply reflect a misallocation of educational resources," but if students are required to participate actively in the schooling process, then "poor. Since education has a direct impact on the lives of the average taxpayer and citizen, it is of great concern to many that the allocation of funds within schools is well researched and implemented to optimize student achievement and human capital accumulation.
Instead of following this recommendation, however, instructional spending as a percentage of total spending in Kansas has fallen from 54.2 percent at the time of this funding increase in 2005 to just 53.9 percent in 2018, and is expected to drop further to 51.1 percent in the largest School Districts in Kansas in 2019 (Trabert, 2018). The National Center for Education Statistics reported in 2017 that 61 percent of all education spending in the United States went to “instruction,” using the same definition for instruction as. Even if spending patterns have increased dramatically over the past few decades, if school boards are irresponsibly doling out the increased funding, then we can hardly expect any noteworthy increases in student achievement.
According to a report by Standard and Poor's (2005, page 1), an organization called First Class Education (“FCE”) advocated adopting the “65 Percent Solution,” arguing that it would help students by “1) improving the amount of money spent in the classroom without increasing taxes; 2) reducing the amount spent on “wasteful” administrative costs by making districts responsible for how they spend their money; and 3) improving student performance by focusing on classroom activities.” Based on previous decades of academic research finding a negligible link between school spending and student outcomes, this effort was met with widespread debate that continues to this day. The same Standard and Poor's report notes that "the 65 percent solution is an input-driven initiative, without any measurable outcome, such as a quantified performance goal or a targeted return on resources," which begs the question. As if the topic of school funding and student outcomes wasn't already steeped enough in debate and disagreement, this 2004 “65 percent solution” further complicated the discussion.
One aim of this thesis will be to contribute to the research in connection with the allocation of school funds.
DATA AND EMPIRICAL METHODOLOGY
Because the literature shows that environmental factors are of overwhelming importance, the empirical analysis includes the percentage of students eligible for free or reduced-price lunch as a rough proxy for poverty levels within school districts.3 This variable is used in all schools used. regressions (regardless of outcome or spending measure) in an attempt to capture the likely important environmental factors that would be impossible to explain without a significant increase in socioeconomic data for each district. Perhaps more striking, however, are the statistics on the percentage of students who qualify for free or reduced-price lunch. If it is to be assumed that environmental conditions matter greatly in determining student outcomes and that the percentage of students eligible for free/reduced lunch is a rough but practical indicator of poverty levels, then these data indicate discrepancies in performance of students between school districts. in the St.
Overall, Table 1 shows the remarkable disparities between the most successful and least successful school districts in St. Where, for district i in year t, 𝐼𝑆𝑃 = Instructional expenditures per student, 𝐼𝑆% = Instructional expenditures as a percentage of total expenditures. The squared terms are of particular interest in calculating an optimal value for instructional expenses as a percentage of total expenses, in order to determine whether the data for St.
The twelve regressions will provide insight into any relationship between school spending and short-term measures of student success in school districts in the St. Louis area. Louis, considering the issue of the distribution of instructional expenses within a school district. Since the analysis uses a different proportion of students from schools of different socioeconomic status, the beneficial effects of instructional spending on low-income students may be obscured.
Overall, if the results of this analysis largely reflect the general consensus within the literature on this topic, then we should observe a negligible or nonexistent relationship between instructional expenditures per student and short-term measures of student performance, while the 65 percent rule must be supported by findings.
RESULTS
A student's family background and environment are far more important in influencing student outcomes than instructional expenditures per student. In contrast to the results found in Table 2, we see statistically significant coefficients for the expenditure measure in Table 3. The results in column (2) that include year/district model variables reveal that an additional percentage point in instructional expenditure per pupil results in a approximately 0.80 increase in average ACT composite score.
After calculations, the optimal value for IS% is 66.5%, which closely reflects the 65 percent rule.4 The results in columns (1) and (2) support the conclusion that allocation is undoubtedly the most effective tool available for politicians who hope to bring about improved results in schools. The results in Table 4 have been estimated to reduce the simultaneity problems that may exist since school performance can directly affect the amount of aid a district receives (as when a low-performing school district receives an increase in funding). Again, these results support the finding that tuition costs per student does not affect the results.
In these results, we again note a relatively stronger relationship between ACT scores and tuition expenditures as a percentage of total expenditures than is seen when tuition expenditures per student are used as the spending measure. School districts with lower ACT scores in 2001 had more room to improve compared to the higher performing districts, and this would Table 4 - Effect of Spending per Student in 2001 on Student Outcome Growth. As expected, the results of these regressions largely support the dominant conclusions from the relevant academic literature.
Each regression that was estimated with instructional expenditures per student produced statistically insignificant coefficients, indicating no relationship between expenditures and student outcomes.
CONCLUSION
This spending measure is used to determine how much a school district focuses on education compared to other areas receiving funding. The outcome measures used in this dissertation are the average ACT composite score and the percentage of high school graduates who attend a 2- or 4-year college or university within 180 days of graduation. This finding indicates that policymakers and school district administrators should focus more on allocating spending to influence student outcomes, rather than simply changing how much money is spent per student.
One of the conclusions of this thesis is to reinforce that there is no relationship between school district spending per student and student outcomes. For example, it is possible that the measures of student outcomes used in this analysis are too short-term to capture potential beneficial effects of changes in spending—the ACT is taken during a student's junior or senior year and the percentage of high school graduates by enrollment in a 2- or A 4-year college or university is measured within 180 days of graduation. While it may seem logical that the number of high school seniors who enroll in college after graduation would reflect a school district's effectiveness in shaping its students into lifelong learners, environmental factors unrelated to the classroom experience cannot be ignored. in high school are extremely important in determining whether or not a student will attend college (parental values and expectations, career aspirations, etc.).
Another useful change that could be made to this analysis would be to focus specifically on certain populations within a school district's student body. The data used in this research focused on student achievement at the end of high school—the end of a student's interaction with their school district. Although it is assumed that consumption patterns throughout a student's tenure in their school district accumulated over time to influence the outcome measures, it could potentially be worthwhile to use more age-specific outcome measures, such as test scores within elementary schools.
In summary, future research could benefit from measuring outcomes over a longer period of time than the short-term outcome measurement used in this study and measuring more specific groups within the student population rather than the school district population as a whole.
