American educational dollars down the drain

July 31, 2012

Free Market Foundation

In 1983, the National Commission on Excellence in Education released its report, “A Nation at Risk,” that showed American children lagging behind in education. Since then, the teacher unions have continually asked for more money to solve the educational crisis. However, the relation between dollars and units of educational output is dubious.

The period of declining test scores, from the early 1960s through the early 1980s, coincided with a period when expenditures on education were rising in real terms that is, after adjusting for inflation.

Per-pupil expenditures rose 58 percent in real terms during the 1960s and 27 percent in the 1970s.

The lack of connection between dollars spent and education output persisted after “A Nation At Risk”:

During the rest of the 1980s and the early 1990s spending rose 29 percent.

Simultaneously, American 13-year-olds finished last in a test comparing science and math skills internationally and Scholastic Aptitude Test (SAT) scores were still abysmally low.

American corporations have also noted the decline in education.
For example:

American Telephone and Telegraph (AT&T) has reported that, on average, 115 out of 117 applicants (98.3 percent) fail its employment exam.

Motorola found that 80 percent of its applicants fail its exam which evaluates English skills at the seventh grade level and math skills at the fifth grade level.

Historically speaking, additional money does not result in improved results.

Source: Jonathan Klick, Do Dollars Make a Difference? The Relationship Between Expenditures and Test Scores in Pennsylvania’s Public Schools, American Economist, Number 1, Spring 2000.

For more on State & Local Spending http://www.ncpa.org/pi/edu/edu9.html#d

RSA Note:
Even the wealthiest country in the world is unable to make government schooling work by committing more resources to it South Africa has even less chance of doing so. This country can leapfrog into the developed-country category in a decade merely by allowing schooling to be provided by the market. This means that the most talented managers and educators be allowed to mobilise resources to educate and train the countrys youth free of bureaucratic regulation and constraint in a demand-led/choice-driven schooling market. What must government do? Stop prescribing curricula and stop preventing innovation. And what about the poor? Government can purchase basic high-quality schooling for the poor from competitive private providers at a much lower cost than it currently delivers a very inferior service.

Eustace Davie, director, FMF.