by Peter Franklin
Friday, 27
August 2021

More money doesn’t make better schools

Even socialists now reject the connection between expenditure and quality
by Peter Franklin

Freddie deBoer is a full-on socialist and also a former teacher. He’s therefore the last person you’d expect to doubt the effectiveness of more spending on schools. 

And yet he’s looked at the data and is hard-pressed to find a link between educational expenditure and educational outcomes. For instance, take a look at the country comparisons in this chart:

Average learning outcome by total education expenditure per capita. Credit: Our World in Data

As you can see, the poorest countries that can afford the least do worst — as one might expect. However, after a certain level of expenditure any extra funding makes little difference to country outcomes. DeBoer points out that “the USA spends something like 8 times what Vietnam spends per student and performs just about exactly as well.”

Obviously, a given budget goes a lot further in some countries than others — but note that these expenditure figures are adjusted for purchasing power. 

As well as comparing countries, deBoer looks at the impact of the increase in educational spending within one specific country: the United States. As a share of GDP, US educational spending has more than doubled since the 1950s: there’s a lot more money sloshing around the education system.

US education expenditure as a share of GDP. Credit: Our World in Data

What’s more, policy-makers have got much better at directing resources towards the most disadvantaged pupils. So, after “throwing money at our achievement gaps for 40 years” have we seen corresponding improvements in outcomes and greater equity between educational cohorts? No, says deBoer, “we’ve burned money on it and gotten nowhere.”

It’s not that extra resources can’t make a difference. At a micro-level we have plenty of evidence that they can. The clearest example is the so-called “2 sigma problem”. This was a 1984 study (whose findings have since been replicated) that randomly assigned pupils one-to-one tutoring. The difference made to outcomes was enormous — two standard deviations’ worth. 

The ‘problem’ with the 2 sigma problem is that we don’t have the resources to scale-up these methods. Nevertheless, it does demonstrate that individual educational outcomes aren’t fixed, and that, in the right circumstances, a difference can be made — even if it isn’t as spectacular at scale as can be achieved with intensive interventions. 

And so the question remains, why doesn’t more spending make a bigger difference at the macro-level? Is the explanation that education systems are wasting their extra resources? Or are factors in the wider world cancelling out the good that schools do with more money? 

These are hard questions. Let’s hope that, one day, we have the ability — and courage — to answer them. 

Join the discussion

  • More money doesn’t make better medicine either. Covid is probably caused by a health industry’s, investment into pandemic prevention. Read Ivan Illich.

  • What is the money spent on in the UK? I am surprised the expenditure is so high.
    I also notice that Kazakhstan has a higher outcome than every European country, except Russia.
    Personally I would invest on paying teachers way more and insure their status was enhanced, which would mean less paperwork, but more accountability and performance driven pay (even in the worst schools, so that an improvement from “crap” to “middle of the road” is equally rewarded).
    Where I am in Scotland in our primary most teachers are very young, very few are middle-age and I think none is older, which means that you train, but do not retain.

  • The more you spend the more creeps come to get some. I always turn to ‘Little House On the Prairie’, Ingalls-Wilder for the example of a school. I have worked in 3 extremely remote communities in USA that had one room schools where one teacher teaches all grades.

    “On December 10, 1882, two months before her 16th birthday, Ingalls accepted her first teaching position” She became a school teacher at 15… and everyone learned to read, write, basic math, and some history. A great set of books, non-fiction, autobiographical account of wagon train settling of the Prairie of North Dakota. Great TV series – children should read them…

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