The Money Myth: School Resources, Outcomes, and Equity

Chapter 3: When Money Does Matter: Explaining the Weak Effects of School Funding

Chapter 3 When Money Does Matter:Explaining the Weak Effects of School Funding IN THE PREVIOUS chapter, I identified the school resources that enhance a variety of schooling outcomes.This was the first task required of improved approaches to school resources.The second task is to understand better what role money plays in enhancing these effective resources—whether, as the myth of money implies,increased spending increases effective resources and then outcomes, or whether this relationship is more complex and checkered . In this chapter, I apply the NELS88 data to equation 1.3, or the causal path between revenues and school resources in figure 1.2. I look at where increased spending makes a difference, where it fails to do so, and how we might construct more effective schools in the future. In analyzing when money might matter, the most critical question is whether increasing expenditure per student—the conventional measure of high and low spending—increases various effective school resources.1 In addition , more detailed patterns of expenditures and revenues may affect resources . For example, various conditions are often attached to the use of state and federal revenues: state revenue often comes in the form of funds for categorical expenditures only on specific resources—textbooks or counselors or computers—and federal revenues are largely earmarked for certain groups like low-income students, English learners, and special education students. It is possible, therefore, that the sources of revenue as well as overall revenue levels may affect spending on effective resources. In addition , to test the common view that non-instructional spending is “bloat” that fails to contribute to outcomes, I examine whether the proportion of instructional versus non-instructional funding influences outcomes. Finally, contri- butions through private foundations set up by parents may enhance effective school resources, on the theory that parents spend their own money to enhance the effectiveness of schooling. As in chapter 2, the results reported in this chapter rely on tables of regression coefficients, and those readers who are uninterested in following the details should skip the rest of this section and continue with the summary in “Revising the Money Myth.” Appendix table B.2 presents coefficients on the five measures of expenditures and revenues, in regressions following equation 1.3.2 As in the prior chapter, the numbers presented are beta coefficients, which describe the standard deviation change in the dependent variable associated with a one-standard-deviation change in the independent variable. The magnitudes of these pure numbers can be compared with each other to make statements about relative magnitude. I again include symbols for significance at 1 percent, 5 percent, and 10 percent. SPENDING PER STUDENT:HOW EFFECTIVE IS IT? The most powerful effects of expenditures per pupil are on simple resources , not surprisingly: the pupil-teacher ratio, low and high teacher salaries, and teacher experience in secondary education.The effects of such expenditures are all substantial, with beta coefficients ranging from –.234 for the pupil-teacher ratio—that is, increased spending decreases the number of students per teacher—to .472 for the highest teacher salary in a district .The effects of expenditures on other effective school resources, however , are much smaller. Higher spending increases teacher experience in secondary education (really a compound resource describing experience at a particular level), presumably by increasing salaries and reducing turnover. Increased spending also positively affects the amount of teacher planning time and student use of counseling, two resources that cost additional money in obvious ways—for teacher salaries and counselors. Furthermore, higher spending reduces the likelihood of conventional teaching in math and science. Although the reason for this finding is not transparent, improving the quality of teaching usually involves sustained professional development that requires spending for teacher release time, materials, and sometimes outside consultants (Little 2006). Finally, a number of positive but statistically marginal effects of additional spending—on more extracurricular activities , more teacher control over instruction, and an improved school climate —are less important because of relatively small beta coefficients. However, a few of these results have the “wrong” sign. Higher expenditures appear to reduce teacher collaboration and reduce school attendance rates.3 Higher spending reduces the likelihood of conventional teaching but also enhances the likelihood of the most innovative teaching—perhaps implying that increased spending leads to more balanced instruction that draws 78 The Money Myth on both pedagogical approaches. So the effects of revenue patterns are not always clear. Ineffective Use...