Educational Test Scores, Education Spending, and Productivity in Public Education: National Trends and Evidence Across States and Over Time, 1990 – 2015

John Garen
University of Kentucky

Rex Bray

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Abstract: We examine national trends in educational funding, test score outcomes, and productivity as well as variations in funding and test scores over time and across states to assess how changes in educational spending are (or are not) related to changes in educational test score outcomes for states. National trends show small increases in test scores, large increases in educational funding (until the last recession), and a continued fall in educational productivity. The cross-state, over time analysis indicates a statistically significant but very small association of state funding to test scores; so small that large changes in funding have little effect on scores. This is consistent with the continued decline in educational productivity. We also find similar results for black students, implying that the increased funding has not served to reduce racial inequality. We suggest that the continued decline in productivity of public schools adds further reason to question the ability of non-competitive, public organizations to improve educational performance and to look for alternatives that embrace or emulate private-sector, competitive organizations. 

Published: January, 2018