Study: More Money, No Improvement


A new study by the Cato Institute reinforces the findings of SCPC and other researchers: more money doesn’t produce better results. The Cato study examines SAT scores from 1972 to 2012 in each state. Student SAT participation rates and demographics are controlled for using an improved version of a previously established research model. Once the controlled SAT scores were established, their percent change over time was compared to the percent change in dollars per pupil funding over the same period.

So here’s the straightforward conclusion: Not one state showed a significant positive correlation between SAT scores and school funding. The overall correlation of school funding to SAT results for all states was found to be .075, where 1 represents perfect correlation and 0 represents no correlation. The study indicates a correlation of 0.3 or 0.4 could be considered meaningful but the correlation that was found is virtually indistinguishable from no link at all. South Carolina fared no better in the study than the average state.

From 1972 to 2012 South Carolina’s education spending increased by over 140 percent. Over the same period the adjusted SAT scores of South Carolina students have fallen by about 1 percent. Despite rapid growth in funding, South Carolina’s education system has continued to produce students with the same level of skills in mathematics and reading comprehension. This stagnation is the inevitable result of the lack of even the threat of competition.

This point cannot be emphasized enough: money alone will not fix education. Yet legislators continue to go back to the well of this failed assumption. A few lawmakers had to fight tooth and nail least year to get South Carolina’s first school choice program, capped at $8 million in tax credits and applicable only to special needs students. This year, the governor’s new education plan – the largest part of which is increasing funding to chosen school districts – was included in the House budget without a word of protest.

Why does this demonstrably failed idea stay alive? The answer is simple. It’s easy for legislators to increase funding for schools and tell their constituents that they’ve done something to fix education. Increasing funding to improve results is an intuitive solution, and few members of the public are aware of the research showing the approach’s failure. By contrast, school choice efforts have been demonized, despite a lack of evidence, as harming public schools and ever-underappreciated teachers. But while it may not be as intuitive a solution, the evidence is there: school choice actually produces better results. It works not just to improve academic outcomes, but also to save public funds.

If legislators truly wish to help South Carolina’s school children and their parents, they should consider looking past the easy answer.

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