New research from the National Bureau of Economics confirms what teachers have always known: Money does make a difference for schools, and districts with large proportions of high-need students need comparatively more money than districts with fewer high-need students.
Researchers Julien Lafortune and Jesse Rothstein of the University of California at Berkeley and Diane Whitmore Schanzenbach of Northwestern University examined student test scores in 26 states that changed the way they fund schools to provide proportionally more funding per pupil for low-income students than students from high-income families. They compared the test scores from these states to the results from the 23 states that did not make such funding adjustments. They used reading and math test scores on the National Assessment of Educational Progress (NAEP), considered the gold standard in testing, to compare student achievement across the states.
The researchers found that from 1990 to 2012 per-pupil revenues rose by roughly 30 percent in the highest-income school districts and by more than 50 percent in the lowest-income school districts. Academic gains increased for every state that provided proportionally more funding for low-income districts, while gains were not consistently realized in the states that did not provide such additional funds.
Moreover, when students were tracked into adulthood, the data showed that a per-pupil increase of $424 each year in school funding from kindergarten through 8th grade resulted in an increase in earnings of more than $5,000 per pupil, adjusted for inflation, or a $1.50 return for every dollar spent. These results were realized regardless of how the money was spent.
The upshot of the research is that equity between low- and high-need school districts in a state is not enough, if funding across the board is not adequate. Moreover, the research suggests, closing the student achievement gap requires funding policies that target more resources both to high-need students within a school district as well as to those school districts, such as New York City, with the most high-need students within the state.