Whether and How Money Matters in K-12 Education

When policy makers make decisions about the amount, type, and distribution of revenues, they are faced with the issue of educational productivity. Given limited resources, multiple goals, and a wide range of possible approaches, policy makers must choose a course of action. Questions such as the following are key considerations in policy debates: How do we ensure that we getting the most for our educational dollar? How do we target resources to help students achieve at higher levels? What are the best strategies for better educating those students who are not being well-served by our schools? How do we eliminate existing inequities in the distribution of resources? What have we learned from prior efforts to allocate resources ef! ciently and effectively? The answers to these questions are complex and variable. The nature and the extent of the educational challenges differ in important ways at each level of the policy-making system (state, district, school, and classroom) and the speci! c conditions for students and teachers within each level of the system vary considerably. Expected educational outcomes are multidimensional and sometimes even in con" ict with one another. Attributing outcomes to speci! c interventions strategies is problematic, as much of student learning results from numerous types of interwoven interactions that are very dif! cult to model or measure. Nevertheless, the effective and ef! cient use of public funds is a prime expectation of the taxpayers who provide the majority of revenue for public schools, and for the policy makers who represent those taxpayers. Some have argued whether spending additional public money on education will improve student achievement or whether additional money would be wasted by inef! ciencies that may exist in the education system. Thus, the question is often posed: Does money matter, and if so, in what ways? As Ladd and Hansen (1999) summarize, “There are, however no easy solutions to this challenge, because values are in con" ict, conditions vary widely from place to place, and knowledge about the link between resources and learning is incomplete” (p. 1). Numerous studies have focused on the extent to which speci! c levels and types of investments produce positive educational outcomes. Among other issues, studies have examined the relation between student achievement and: (a) overall expenditure levels, (b) the types of resources purchased (e.g., teachers, support staff, facilities, technology, etc.), and (c) the way in which resources are allocated and used (e.g., lower student-teacher ratios, additional supports for struggling students, compensation differentials, etc.). The focus of this chapter is to describe what we have come to understand about research on the ef! cient and effective allocation of resources to support the improvement of student learning in K-12 public education. There are three main sections to this chapter. The ! rst section provides an analysis of the context and the nature of the policy debate surrounding the question: Does money matter, and if so, in what ways? It includes a portrayal of the conceptual and methodological issues involved in the research concerning this question, along with a discussion of the numerous ways in which this research has been critiqued. The second section of the chapter describes some of the common policy approaches designed to make money matter that have been implemented in one manner or another over the past two decades. The chapter concludes with a discussion of the emerging topics and methods that are shaping the future of analyses about how money matters.