The Effects of Public-School Spending on College Enrollment

Introduction

The United States government spends a great deal of money on education. Approximately 4.3 percent of the United States GDP is spent on primary and secondary education (NCES, 2013). That is about $706 billion on education averaging nearly $13,874 per student across all 50 states (NCES, 2013). The United States spends 35% more than the global average on education (NCES, 2013).

This imposes the question: how does per pupil spending affect student attainment?

According to the National Center for Education Statistics, the national public high school graduation rate was 85 percent in the 2016-17 school year which was an increase from 69 percent in 2000. Enrollment for students ages 18 to 24 in 2-year and 4-year Colleges and Universities has increased by about 4 percent since 2000 (NCES, 2013). Over the last 2 decades, the US government has marginally increased the amount of money that allotted per pupil by about $2,000 (NCES, 2013). This increase is in hopes of seeing an economic increase in the United States. As the Government spends a significant part of its money on education, it is imperative to evaluate how spending per pupil increases student attainment. Measuring student achievement can be done in many ways, in this experiment it will take the form of college enrollment.

In this research paper, I will analyze what effect the average spending per pupil has on the average college enrollment. The independent variable is the average spending per pupil by state. The dependent variable is the number of students enrolled in college per state. My units of analysis will be thousands of dollars per pupil spending and thousands of students for college enrollment. Benhabib proves that quality funding in schools has an impact on national growth rates and productivity (1994). The significance of this study is to analyze how per pupil spending affects college enrollment. This is an essential factor the US government should consider when determining a budget on spending for public education.

Literature Review

Previous literature on this specific topic is scarce, many studies have been conducted on how per pupil spending increase test scores. I will begin by examining the gap between school district funding, what caused it, and how that has affected students in the long run. In the 1950s the US Supreme Court ruled that segregation within public education was illegal with Brown vs. Board of Education. Although students of color were integrated into schools, the gap in educational funding for education was still vastly large. This has led to significant segregation in socioeconomic status in public schools today. The lack of resources available for socioeconomically separated schools has led to less successful results in students’ academic attainment (Hanushek, 2003).

Hanushek finds that students who do better in school tend to continue with their education, this shows that students may not continue their education if they do not do well in school (2003). Many improvements have been implemented to equalize the inequality of publicly funded schools (American Progress). In today’s world, there is not racial segregation, but there is economic segregation within neighborhoods (Washington post). Unfortunately, race and poverty are linked with poverty levels. 25 percent of the students in the United States are located in financially challenged public school districts (edbuild).

The government’s response to the inequality in district funding was for the states to fund the gaps. States use property tax to make up for the federal funding, the issue is that high-income neighborhoods generate more taxes for their schools, which does not solve the funding gap (Jackson, 2015). In the 1970s state courts found it to be unconstitutional to have a drastic gap in funding of schools (Neymotin, 2010). The government implemented many School Funding Reforms (SFR’s) that altered the parameters to school spending function to close the gap in educational funding between schools (Jackson, 2015).

Jackson and Johnson find that there are improved outcomes for students who experienced larger spending (2016). The effect of higher spending is found to impact educational attainment for students who come from lower-income families more than it does for students who come from higher-income families (Jackson and Johnson, 2106). Their paper concludes that an increase in per pupil spending generates an overall increase in the number of school years completed and improvements in educational attainment. Many studies have concluded that schools with lower budgets have a number of students who are “difficult to educate” and have a harder time accomplishing academic proficiency (Hoffman, 2013, p 272).

In a study conducted in 2017, Hyman finds that students who received 10 percent more school spending had a 7 percent increase in college enrollment (Hyman, 2017). Hyman concludes that an increase in school spending has improved the future results of students (Hyman, 2017). 

All of these studies conclude that students who received higher spending per pupil had an increase in educational attainment, this does not directly mean a higher college enrollment. This study will conduct a linear regression model that will produce the effects of school spending per pupil on college enrollment rates.

References

23 Billion. (n.d.). Retrieved from https://edbuild.org/content/23-billion

Benhabib, Jess and Spiegel, Mark M. “The Role of Human Capital in Economic Development: Evidence from Aggregate CrossCountry Data.” Journal of Monetary Economics, October 1994, 34(2), pp. 143–74.

Hanushek, E. A. (2007). The alchemy of “costing out” an adequate education. In M. R. West & P. E. Peterson (Eds.), School money trials: The legal pursuit of educational adequacy (pp. 77–101). Washington, D.C.: Brookings Institute Press.

Hoffman, J.|Wiggall, M., L.|Dereshiwsky, R., I.|Emanuel, M., & L., G. (2012, November 30). State School Finance System Variance Impacts on Student Achievement: Inadequacies in School Funding. Retrieved from https://eric.ed.gov/?id=EJ1158691

Hyman, Joshua. 2017. "Does Money Matter in the Long Run? Effects of School Spending on Educational Attainment." American Economic Journal: Economic Policy, 9 (4): 256-80.DOI: 10.1257/pol.20150249

Jackson, C. Kirabo; Rucker C. Johnson; and Claudia Persico (2016). “The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms.” The Quarterly Journal of Economics, 131(1):157–218.

Neymotin, F. (2010). The Relationship between School Funding and Student Achievement in Kansas Public Schools. Journal of Education Finance, 36(1), 88–108. doi: 10.1353/jef.0.0026

Owings, W. A., & Kaplan, L. S. (2019). Spending and Student Achievement. American Public School Finance, 269–294. doi: 10.4324/9781351013796-11