Here’s what looks like a policy dilemma. To attain the economic growth that it desperately needs, the United States must improve its schools and train a workforce capable of competing in the global economy. Economists Eric Hanushek, Dean Jamison, Eliot Jamison, and Ludger Woessmann estimate that improving student achievement by half of one standard deviation–roughly the current difference between the United States and Finland–would increase U.S. GDP growth by about a full percentage point annually. Yet states and the federal government face severe budgetary constraints these days; how are policymakers supposed to improve student achievement while reducing school funding?
In reality, that task is far from impossible. The story of American education over the last three decades is one not of insufficient funds but of inefficient schools. Billions of new dollars have gone into the system, to little effect. Luckily, Americans are starting to recognize that we can improve schooling without paying an additional dime. In fact, by unleashing the power of educational choice, we might even save money while getting better results and helping the economy’s long-term prospects.
Over the last four decades, public education spending has increased rapidly in the United States. According to the Department of Education, public schools spent, on average, $12,922 per pupil in 2008, the most recent year for which data are available. Adjusting for inflation, that’s more than double the $6,402 per student that public schools spent in 1975.
Despite that doubling of funds, just about every measure of educational outcomes has remained stagnant since 1975, though some have finally begun to inch upward over the last few years. Student scores on the National Assessment of Educational Progress (NAEP)–the only consistently observed measure of student math and reading achievement over the period–have remained relatively flat since the mid-1970s. High school graduation rates haven’t budged much over the last 40 years, either.