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Illinois School Board Journal
July/August 2005

Smart spending boosts return on school dollar

by Richard Rothstein

Richard Rothstein is a researcher at the Economic Policy Institute and a visiting
professor at Teachers College, Columbia University in New York City.

For years now, conservative economists have contended that sinking money into schools is pointless because test scores don't automatically rise when schools boost spending. True, spending and achievement don't always go hand in hand, but the conservative argument still doesn't make sense.

Illinois spends less than $8,000 per pupil, while New Jersey spends more than $11,000. But the economists who deny that money matters don't propose slashing New Jersey's standard to Illinois' more miserly one. Nor do they propose cutting suburban spending, high in many states, to inner-city levels. Yet still they argue, illogically, against pumping more money into schools with less — an inconsistency that suggests their opposition to greater spending is based more on parsimony than on analysis.

Certainly, schools and districts sometimes spend foolishly. But even die-hard opponents of increased spending acknowledge that, when used properly, more money can raise achievement. So let's move beyond sterile debates about whether money matters and focus instead on four areas in which added dollars could make the most difference.

Early care programs

Studies show that early childhood care and education programs are crucial to academic success. Toddlers whose parents have professional jobs possess vocabularies twice as large as those whose parents are on welfare. Middle-class children have more books and watch less television; they play more with toys that develop hand-eye coordination, which facilitates reading. They have had, on average, more conversations with educated adults, which builds confidence for school success.

By age 3, many minority and poor children already are far behind in cognitive and social development. When disadvantaged children are placed in early care programs staffed with enough well educated caregivers to give the children individual attention, research shows the effects are positive. The best of these programs include parental instruction and teach children not only pre-academic skills — counting and letter recognition — but also such school readiness skills as taking turns, handling frustration, following instructions and resolving conflicts with peers.

Even when these early care programs don't consistently produce higher elementary school test scores, the children benefit down the road. They are more likely to graduate from high school and earn more as adults, and are less likely to get pregnant or commit a crime.

James Heckman, a Nobel Prize-winning economist (and, on most other issues, politically conservative), estimates that for every dollar spent on early childhood education for disadvantaged children, society saves nearly $9, mostly in reduced adult incarceration costs. A recent study by the Rand Corp. found that a half-day program for underprivileged 4-year-olds in California would save nearly $3 for every dollar spent. Ensuring quality care for all disadvantaged toddlers and preschoolers in the nation would increase school spending by only about 5 percent — and be well worth it.

School health clinics

Health problems also impede many children from learning. For instance, low-income children enter school with twice the rate of vision problems as middle-class children. A child who can't see well can't read well.

Overall, absence because of illness is 30 percent higher for low-income children. A recent study of low-income minority children in Chicago found that one in four has asthma, now the most frequent cause of absenteeism. Extending health insurance won't by itself solve this problem because low-wage workers aren't routinely allowed to leave their jobs to take their children to the doctor, dentist or optometrist. Medicaid is available, but less valuable when there aren't many physicians in the neighborhood. One study found that the primary care physician-to-population ratio in middle class communities was more than three times that in low-income minority communities.

An obvious remedy is to establish fully staffed health clinics in schools serving disadvantaged children. This might add another 5 percent or more to education spending, although many costs would be picked up by Medicaid.

Wouldn't school health clinics and early care programs in disadvantaged communities be sound investments?

After-school, summer programs

Although rarely recognized, minority children seem to learn as much in school as their white counterparts, and on some measures, their gains are greater. For instance, an analysis of scores from the highly regarded National Assessment of Educational Progress shows that black eighth-graders in 1998 gained more in reading from the time they were fourth-graders than whites. Although schools can do much more to improve minority performance, big causes of the continuing gap in overall achievement are that disadvantaged children start out so far behind, and their education gets less support after school and during the summer break. The best opportunities for smart investments to boost minority performance further may lie outside the regular school day.

Tests suggest this because we can assess children at the end of the school year and again when they return for the next grade. Disadvantaged children's scores fall during the summer break, while middle-class children's don't. One explanation is that in the summer, middle-class children read more, travel more, go to museums more often and learn new social and emotional skills at camp or in organized athletics. Although it is impractical to measure relative daily in-and-out-of-school performance by testing children in the afternoon and again the next morning, it is reasonable to think that differences in after-school opportunities exacerbate the achievement gap between middle-class and disadvantaged children, much as these differences have been shown to do in the summer.

After-school and summer programs that provide academic support as well as cultural, athletic and organizational experiences for disadvantaged children would be a good use for added dollars. They would probably add 20 percent to education spending (including what is already spent by organizations such as the YMCA, Boys & Girls Clubs, Children's Aid Society and other top-rated after-school providers). Only about one in five low-income children participate in after-school programs.

Reduced class size

As for spending more on the regular school day, there's controversy about whether reducing class size is worth the cost. Evidence shows some benefits from smaller classes in early grades, especially for disadvantaged children, but effects may seem small when we measure them only by basic math and reading scores.

But test preparation is not the best use of smaller classes. They are mostly valuable because of the intellectual and social development that children experience in individualized interactions with adults who ask questions and engage in discussions of alternative possibilities. An experiment in Tennessee, where children were randomly assigned to small classes from kindergarten through third grade, found test score gains for minority children. But even more important impacts appeared later, in greater high school graduation rates, for example.

Money spent on reducing class size may be wasted if teachers use the same techniques (whole-class instruction) in smaller classes that they used in larger ones. To individualize instruction, as small classes allow, teachers need to be smarter and better trained. So to use class size reduction funds effectively, we also have to increase spending on teacher training and on attracting more qualified teachers to the profession.

Most economists agree that teachers' pay is uncompetitive: they earn from 5 to 15 percent less than comparable non-teacher professionals. Class size reduction increases schools' demand for teachers. In other fields, economic laws predict that higher demand causes higher prices, if quality is not to fall. Why shouldn't we expect the same for teaching?

Throwing money at problems is not the way to solve them, but smart spending can pay. We spend too little on programs likely to succeed not because we lack consensus on their value. We just don't want to raise taxes to pay for them.