Money Myth

The disparity between public-school spending in posh suburbs and public-school spending in poor inner cities is a potent symbol of economic inequality. The contrast between schools in Watts and Beverly Hills, North Philadelphia and Lower Merion, is vivid testimony to the difference that property values (and taxes) can make.

But a recent study of Ohio's public schools contradicts the impression created by such comparisons. Analyzing achievement-test scores and per-pupil spending in more than 600 school districts, a policy analyst at the Urban Policy Research Institute found that, when socioeconomic factors were taken into account, students in districts that spent more performed worse, not better.

"The implication," study author Marjorie Davies notes laconically, "is that Ohio school districts are not effectively using existing dollars to boost student achievement."

Davies found that the most important factor affecting student performance was socioeconomic status, as measured by family income and welfare rates. More-affluent students tended to do better on achievement tests. But when she controlled for income and welfare rates, she found compelling evidence that more funding is not the way to improve public education: Higher spending was actually associated with lower test scores.

Per-pupil spending ranged from $2,807 to $11,106, with a median of $3,590. But even the lowest figure was high by private-sector standards. "Neighborhood parochial elementary schools in Cincinnati thrive on far less money," Davies notes.

Davies suggests that inefficiency in public schools is largely due to spending on heavy administrative costs, desegregation plans, and nonacademic programs such as social clubs and athletics. To curtail waste, Davies recommends school choice. Without competition, she stresses, money doesn't matter.