Tuesday, June 9, 2009

It’s Not the Money, It’s What You Spend It On

Our neighbor from the Hoover Institution, Eric (Rick) Hanushek, who also currently chairs the National Education Sciences Board, has just published a very interesting book (with co-author Alfred Lindseth) on the financing of schools1. It provides a very readable narrative of the last couple of decades’ court decisions about how much money it should take to provide an equitable and adequate K-12 education. The authors’ basic thesis is that the amounts of money schools spend are generally unrelated to increases in achievement, unless one considers what the money is spent on. Clearly, if spending was focused on policies and programs that lead to achievement gains and to decreases in the achievement gaps between populations, things would improve. But court-ordered increases in education spending have seldom used credible estimates of likely impact of various programs, even though the programs' costs were used in calculating how much an equitable or adequate education will cost. The authors document in fascinating detail the irrationality of the process of producing these cost estimates.

Hanushek and Lindseth propose that, where administrators and teachers are accountable and rewarded for results, they will consider the trade-offs in efficiency of spending money one way or another. For example, smaller class size may lead to better results but, if the same money were spent to increase teacher quality, the results may be much more substantial. This proposal, of course, depends on there being sufficient evidence that various programs, policies, or approach have a measurable impact. And they further acknowledge that getting this information is not a matter of running one-time experimental evaluations. The wide variation of populations, resources, and standards in US school systems means that a large number of smaller scale evaluations are called for. If states and school districts were to get into the habit of routinely pilot testing programs locally (and collecting and analyzing the data systematically) before scaling up within the district or state, the gains in efficiency could be substantial.

Hanushek and Lindseth do not address the question of how local evaluations of sufficient quality and quantity can be paid for. If one depends solely on the Institute of Education Sciences for grants and contracts, the process will be slow and the resources inadequate. Setting aside a certain percentage of federal grants to states and districts for evaluations is often unproductive because the evaluations are not designed or timed to provide feedback for continuous improvement. Too often, educators and administrators treat the evaluation as a requirement that takes money from the program. We have argued elsewhere that integrating research into program implementation at the local level calls for building local school district capacity for rigorous evaluations. It also calls for a reform agenda that changes how decisions are connected both to explorations of district data and to locally generated evidence as to whether programs and policies are having the desired impact. This is different from contracting with the evaluator once program is under way because the plan for the evaluation is part of the plan for implementation. Directing a good portion of the program funds to a process of continuous improvement will make the program more efficient and provide educators with the hundreds of studies that will begin to accumulate the kind of evidence that they need to make a rational choice about what programs are worth trying out in their own locale.

Educators, especially those who spend their days engaged with children in a classroom, may find the rational economic model on which the authors’ proposals are based unsatisfying and perhaps simplistic. Most people don’t go into education because they are maximizing their economic return. Nonetheless, it is hard to find a rationale for retaining teachers who are demonstrably ineffective beyond the traditional practice of union solidarity that militates against differentiation of skills among its members. The authors' arguments are thought provoking in that they demonstrate in rich narrative detail the obvious irrationality of considering only the amount of money put into schools and not considering the effectiveness of the programs, policies, and approaches that the money is spent on. —DN

1 Hanushek, E.A. & Lindseth, A.A. (2009). Schoolhouses, courthouses and statehouses: Solving the funding-achievement puzzle in America’s schools. Princeton NJ: Princeton University Press.


  1. once again people who have never taught a day in their life know more than everybody else......i bet if these so called college geniuses ever had to teach in a low income school they would not last a year let alone a career

  2. We at Modern School, Lucknow, India226024 have tentatively introduced teacher quality performance and degree of performance related bonuses. Our supervisory staff is starting with self assessment by each teacher based on rubric given. The ultimately goal is that all the members of the community – the teachers, supervisors, principal, parents and students have the same standards in the mind –ONE MIND OF THE COMMUNITY. It may take more than six months to reach a high score of 80% plus. We will start from 60% and expect a 5% increase each month in each area (subject knowledge three classes higher, methodology knowledge and know how, impact on student achievement and development, impact on student- parent perceptions of school quality and cooperation). Please see our websites www.themodern.in and www.kqes.org as to what our educational system is.