More spending doesn’t clearly translate into better academic outcomes, according to research from the center-left Brookings Institution.
For years, American Experiment has argued that there is a weak and often inconsistent relationship between higher K-12 education spending and improved academic outcomes, emphasizing that simply increasing budgets does not guarantee better performance.
The recent research from the Brookings Institution reinforces this position, finding that additional school funding — while sometimes helpful in specific contexts — does not reliably translate into meaningful gains in student achievement. Together, these findings highlight that the quality of spending and the effectiveness of policy design matter far more than the size of a school’s budget.
The dollars
There are very large and persistent gaps in how much states spend per student: Some states spend more than double what others do. For example, Brookings Institution calculates that raising all states’ spending to match the 2018-19 average in the highest-spending state (New York) would cost almost $600 billion. Even raising spending to match the next-highest state, New Jersey, would cost roughly $360 billion.
So, while other factors may influence educational outcomes, differences in funding across states are large enough that — if money is a key driver of school quality — we would expect to see differences in outcomes across states; and we believe examining that relationship systematically has merit.
The results
Despite the big differences in spending, the link between state-level per-pupil spending and educational outcomes (like test scores and high school graduation rates) is weak, according to Brookings.
When comparing spending-outcome slopes (i.e., how increases in spending relate to outcomes) to causal estimates from other research, the authors find that the slope across states is much smaller than what causal studies suggest. Much of the small positive correlation is explained by differences in student socioeconomic status. After adjusting for state poverty rates or per-capita income, the relationship between spending and outcomes shrinks or even disappears.
One might expect that more funding benefits disadvantaged students more (because they often have greater needs), but Brookings does not find a stronger positive relationship between spending and outcomes for economically disadvantaged students. In fact, they find the spending-outcome slope for disadvantaged students is “if anything, flatter” than for more advantaged ones.
…[W]e show that no matter how we cut the data, the state-level relationship between spending and test scores is small; it is essentially zero for economically disadvantaged students. For high school graduation, there is more evidence of a spending–outcome connection, but the relationship is much weaker than expected based on the results of a recent meta-analysis (JM benchmark) and, again, essentially zero for economically disadvantaged students.
The authors suggest several possible reasons why more spending doesn’t clearly translate into better outcomes, including efficiency/productivity issues — higher-spending states may not be using additional resources in the most effective ways — and differences in input costs.
Minnesota, take note
Simply increasing state-level school spending isn’t guaranteed to improve outcomes significantly, according to Brookings.
That conclusion resonates strongly in the case of Minnesota. Despite historically high funding levels in public education and COVID-era aid, statewide proficiency remains low, with just under half of public-school students proficient in reading and less than half proficient in math. National test results also show the state has not recovered to pre-COVID levels of proficiency, and Minnesota’s ranking has fallen to middle-of-the-pack, with states that spend far less and serve similar demographics outperforming Minnesota in both reading and math.
This suggests that the decline in achievement in Minnesota — accelerated by disrupted in-person learning and extended school-closure policies during COVID — has not rebounded effectively despite large investments. Other states have rebounded, with less spending involved.
To make spending more effective, Minnesota should consider reforming institutional or regulatory barriers so that resources could possibly translate to better outcomes. For example, pay structures are often tethered to rigid teacher union salary schedules, which are based only on years in the classroom and educational attainment. Salary scales based instead on evaluation scores and performance metrics have shown positive and significant effects on student math and reading achievement.
Conclusion
Focusing on raw education spending is not the solution to persistent education challenges. Instead, policymakers should shift more attention from how much is spent to how effectively resources are used. Scrutinizing whether additional funds are being spent in ways that improve instruction, support students’ needs, and raise productivity doesn’t happen enough. Greater attention to governance and spending transparency in how school boards budget and spend, and a shift to outcome-based or performance-informed resource strategies, would be positive places to start.
The findings of the Brookings report, along with other research, underscore a growing recognition that improving educational outcomes will require more than simply adjusting the size of state budgets. Policymakers, researchers, and advocates are increasingly converging on the idea that productivity, not just funding levels, must be central to future reforms.
In the months and years ahead, the impact of this report will likely depend on whether state leaders embrace its challenge to move beyond funding debates and toward a more nuanced understanding of educational quality and efficiency. If they do, the conversation about school finance may finally shift toward more of what students truly need to learn and thrive.
