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December 1, 2011
Vol. 69
No. 4

Research Says… / U.S. Schools Get Less for More

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On rainy days, educators at Trenton Central High School scramble through the 77-year-old building, placing buckets to collect water leaking from the sagging roof. Mice dart across the student tables in the library with such regularity that the librarian keeps a mousetrap in her desk. "It's unconscionable to ask these kids to go to school in these conditions," a Trenton school board member told a TV station (Muchanic, 2011).This scene, and others like it playing out across the country, might suggest that the United States is investing too little in public education.
The reality, though, is quite the opposite. According to a new report from the Organisation for Economic Cooperation and Development (OECD, 2011), in the last 40 years the United States has more than doubled its spending on K–12 education and now outspends almost every other country in the world—devoting 4 percent of its gross domestic product (GDP) to K–12 education compared with, for example, Japan's 2.6 percent.
Somehow, though, doubling down on school spending has not translated into commensurate gains in student achievement. On international measures, U.S. students' achievement has remained relatively flat, while other countries have improved their performance. On the 2009 PISA assessment of 15-year-olds, the United States ranked average and below average, respectively, in reading and mathematics achievement (OECD, 2011).
So why hasn't our big investment in education translated into better returns in improved student achievement—or spared kids in Trenton from attending dilapidated schools?
Certainly, much of the additional spending has been directed toward special education, which by one estimate had mushroomed from a small sliver (2.8 percent) of district budgets in 1967 to 15.4 percent by 2005 (Alonso & Rothstein, 2010). It may be unrealistic to expect this targeted spending to result in general achievement increases.
Research suggests, however, that there are lessons we can learn from other countries that are spending less yet getting more bang for their buck. Two key differences between the United States and higher-performing nations may prompt some reexamination of time-honored approaches to allocating school dollars.

The U.S. Trade-off: More Teachers, Smaller Salaries

One of the most striking oddities that emerges from research on school funding in the United States is that despite increased spending on schools, average teacher salaries have actually declined about 2 percent per year since 1970 when calculated in terms of per capita GDP (Auguste, Kihn, & Miller, 2010). U.S. teacher salaries now rank fourth from the bottom among 34 competitor countries (OECD, 2011).
As salaries have declined, U.S. schools have gone on a hiring spree. The number of teachers increased by 46 percent between 1980 and 2007, more than twice the rate of student enrollment growth (21 percent) (Podgursky, 2011). During this time, teacher–student ratios fell from 18.7 to 15.7; if they had remained constant and the funding increases had been funneled into teacher salaries, the average teacher would now make $78,574, instead of $52,578 (Podgursky, 2011). This trade-off has resulted in a uniquely American teaching corps of low-salaried classroom teachers teaching smaller classes amid a supporting cast of higher-paid specialists (OECD, 2011).

Persistent Inequities

Although U.S. educators often believe that other nations educate only their elites while American schools take responsibility for educating everyone, the 2011 OECD report asserts that this is not true. Indeed, the U.S. graduation rate (77 percent) is actually below average among OECD countries (80 percent), and only 8 of 34 OECD countries have a lower graduation rate than the United States (OECD, 2011). Further, student success is more strongly tied to parents' income in U.S. schools than in schools in other countries. In the United States, socioeconomic status accounts for 17 percent of the variance in student achievement, compared with 9 percent in Canada and Japan (OECD, 2011).
This variance in achievement may be related, in part, to gross inequities in funding that persist in the United States, despite state and federal efforts. Although all but a handful of states provide dollars to equalize funding between wealthy and poor districts (Hightower, Mitani, & Swanson, 2010), these efforts often fail to make up for funding gaps within local districts. To wit: An equalization effort in New York sparked by reports of a $4,000 gap in per-pupil funding between New York City and wealthy Westchester County overlooked the fact that within New York City itself, some schools were receiving $6,000 more per pupil than other schools (Roza, 2010).
One reason for such gaps is the fact that many districts allocate resources by formulas that distribute teachers, not dollars, to schools. Because more experienced, higher-salaried teachers generally opt for schools with fewer impoverished students, schools with more privileged students receive a disproportionate share of district funds. An analysis of Baltimore schools in 2002, for example, found that teacher salaries averaged $37,000 in one school and $57,000 in another (Roza, 2010).
Even the $14 billion federal investment in Title I funds, explicitly intended to target funds to low-income students, may be exacerbating the problem. That's because its complex formulas tend to skew toward schools with less concentrated poverty in larger districts and wealthier states (Miller, 2009).
The overall effect of the Byzantine system of school finance in the United States is gross disparity in funding. For example, a case study of two schools with comparable student populations revealed that one school in Virginia received more than twice as much combined federal, state, and local funding per student ($14,000) as a similar school in North Carolina did ($6,700) (Carey & Roza, 2008).

The Gap Between Funding and Rhetoric

What may be most striking about school funding in the United States is the glaring contradiction between spending habits and lofty rhetoric. We proclaim classroom teachers to be the key to student success, yet we opt for a low-salaried teaching corps. We have long sought to use federal and state funds to mitigate funding disparities between poor and rich students, yet in practice we may be making the gaps worse.
So if there's any good news to this research it may be this: Translating the United States' highest-in-the-world education investments into best-in-the-world performance may not require us to change our values or to copy other countries. Rather, we may need only to translate our own rhetoric into reality.

Alonso, J. D., & Rothstein, R. (2010). Where has the money been going? A preliminary update (Briefing paper no. 281). New York: Economic Policy Institute.

Auguste, B., Kihn, P., & Miller, M. (2010). Closing the talent gap: Attracting and retaining top-third graduates to careers in teaching. London: McKinsey and Company.

Carey, K., & Roza, M. (2008). School funding's tragic flaw. Washington, DC: Education Sector.

Hightower, A. M., Mitani, H., & Swanson, C. B. (2010). State policies that pay: A survey of school finance policies and outcomes. Bethesda, MD: Editorial Projects in Education.

Miller, R. T. (2009). Secret recipes revealed: Demystifying the Title I, Part A funding formulas. Washington, DC: Center for American Progress.

Muchanic, N. (2011, March 23). Officials: Trenton school in shambles. WPVI-TV. Retrieved from

Organisation for Economic Cooperation and Development (OECD). (2011). Strong performers and successful reformers in education: Lessons from PISA for the United States. Paris: Author. Retrieved from

Podgursky, M. (2011). Teacher compensation and collective bargaining. In E. A. Hanushek, S. Machin, & L. Woessmann (Eds.), Handbook of the economics of education (Vol. 3, pp. 279–313). The Netherlands: North-Holland.

Roza, M. (2010). Educational economics: Where do school funds go? New York: Urban Institute.

Bryan Goodwin is the president and CEO of McREL International, a Denver-based nonprofit education research and development organization. Goodwin, a former teacher and journalist, has been at McREL for 15 years, serving previously as Chief Operating Officer and Director of Communications and Marketing. 

He has authored or co-authored several books, including Simply Better: Doing What Matters Most to Change the Odds for Student SuccessThe 12 Touchstones of Good Teaching: A Checklist for Staying Focused Every Day, Balanced Leadership for Powerful Learning: Tools for Achieving Success in Your School and The Future of Schooling: Educating America in 2020. Goodwin also writes a monthly research column for Educational Leadership magazine. 

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