Half a century ago, when sociologist James Coleman was tasked by the U.S. Department of Education with studying educational inequality, a good school was regarded as one that featured teachers with advanced degrees, a well-stocked library, state-of-the-art science labs and the like. The assumption was that these “inputs” were key to students’ success. But the bottom line of the 737-page “Equal Educational Opportunity Survey,” known as the Coleman Report, was dynamite. Families mattered most, schools mattered less — and extra resources didn’t seem to matter much at all.

Battles over whether bigger school budgets can make a difference have raged since.

Those who say more money doesn’t improve education point out that after five decades of K-12 funding increases, 17-year-olds’ reading and math scores on the National Assessment of Student Progress, the nation’s report card, haven’t budged.

When economist Eric Hanushek, at Stanford University’s Hoover Institution, reviewed some 400 studies in 1989, he found “no strong or consistent relationship” between bigger school budgets and greater student success. The focus on how much different school districts spend, in school finance litigation and legislative deliberation, he added, “appears misguided.” In 2015, the Texas assistant solicitor general made the point more colorfully, arguing against more school funding in court: “Money isn’t pixie dust.”


But the skeptics are asking the wrong question. The issue isn’t “does money matter?” but “when does money matter?” and “for which students?” California, in particular, is providing answers.

National data show that careful investments — in initiatives such as high-quality preschools and small class size in elementary school — can pay off. And recent research, using sophisticated statistical tools that weren’t available to Coleman, conclude that targeting children from low-income families can change the trajectory of their lives.

National data show that careful investments — in initiatives such as high-quality preschools and small class size in elementary school — can pay off.

In one such study, infusions of dollars to poor school districts, as a result of court-ordered reform, led to a 10% increase in the predicted graduation rate for students from low-income families and a projected 10% rise in their lifetime earnings. Other research found that increasing K-12 spending by 10% added a half-year of schooling and a wage boost of nearly 10%. “A 22 percent increase in per-pupil spending,” the study concluded “is [estimated to be] large enough to eliminate the education gap between children from low-income and nonpoor families.”


The relationship between school budgets and student success is a big-time issue in California. The landmark Local Control Funding Formula, established by the Legislature in 2013, channels extra dollars to districts based on the number of students from poor families, English language learners and foster children they enroll. And instead of telling districts precisely how to spend this money, as had been the statewide rule, LCFF lets them decide for themselves — what works in Los Angeles won’t always fly in Eureka.

In a study published last month, Berkeley public policy school professor Rucker Johnson and Sean Tanner, a senior researcher at the Learning Policy Institute, confirmed the wisdom of the LCFF approach. All students, and especially those whom the legislation singles out for extra help, are benefiting from the infusion of funds.

Among Johnson and Tanner’s findings: The state’s graduation gap is shrinking. For every additional $1,000 per student that a school district received, 6.1% more students from poor families earned a high school diploma (the overall graduation rate rose 5.1%). And scores on California’s achievement tests are up. The added $1,000 shrank the high school math achievement gap between poor and nonpoor students by 37%.

The researchers concluded that in high-poverty districts, which have received as much as $3,000 per student in LCFF funding, students should be progressing even faster. What’s more, the gains for younger students should get bigger because students still in school will reap the benefits of having a better-funded education for a longer period.


Hanushek, the money-improves-educational-outcomes skeptic, hasn’t commented publicly on the latest research, but even he’s not hostile to a targeted strategy like LCFF. As he told a National Public Radio interviewer in 2016, “What I see as the ideal in many ways is a system that provides extra resources to kids that need more resources. So this would be ELL [English language learner] kids. Special education kids. Disadvantaged kids in general.”

The new generation of research has overtaken the findings of the Coleman Report. How much money schools spend can make a difference, if, as is the case in California, it goes to educate the students who need extra help the most.

David L. Kirp is a professor of public policy at UC Berkeley and a senior scholar at the Learning Policy Institute.


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