Does More Spending Necessarily
Result in Improved Educational Outcomes?

Standard and Poors just released a new study of Michigan's public K-12 schools that says:

1. In terms of return on financial resources, higher spending doesn't always translate into student success. Of the 181 school districts that spent more per student than the state average, 92 had below-average passing rates on the Michigan Educational Assessment Program (MEAP) standardized tests. Of the 343 school districts with below-average spending, only 171 had above-average MEAP passing rates.

2. On the academic performance side, there is some good news. Passing rates on the MEAP tests improved in reading, math, and science in most grade levels tested from 1997 to 2001. Statewide passing rates in 2001 ranged from 74% for fourth-grade math tests to 19% for fifth-grade social studies. Although participation in Advanced Placement (AP) exams increased to 13.8% in 2001 from 9.8% in 1997, the percentage of AP exams receiving scores of three or above decreased to 58.4% in 2001 from 63.3% in 1997. The graduation rate increased to 86.3% of students in 2001 from 80.7% in 1997, while the dropout rate decreased to 3.7% from 5.1% during the same period. The last set of numbers show good improvement.

3. How does Michigan compare to the nation? About 29% of Michigan students who took the 2000 4th grade National Assessment of Educational Progress (NAEP) math test scored at the proficient level, compared with the national average of 25%. About 33% of Michigan students who took the 2000 fourth-grade NAEP science test scored at the proficient level, compared with 28% of students nationwide. Michigan ranked fourth highest in the nation in average teacher salaries in 2001. Only 7 states in 2001 had more students per teacher than Michigan. Michigan’s state revenue per student was among the highest in the nation in 2000, while only five states reported a higher proportion of revenue from state sources.

Again, in the race for human capital talent, education matters.

Go here to get the report.