Cato’s Andrew Coulson argues that a growing body of evidence shows that it does.
How is that possible? There is little debate in academic circles that raising human capital ? improving the skills and knowledge of workers ? boosts productivity. So an obvious interpretation of the JPS [Journal of Policy Sciences] study is that raising public school spending must not increase human capital. While this possibility surprised study authors Norman Baldwin and Stephen Borrelli, it is consistent with the data on U.S. educational productivity over the past two generations.
Since 1970, inflation adjusted public school spending has more than doubled. Over the same period, achievement of students at the end of high school has stagnated according to the Department of Education?s own long term National Assessment of Educational Progress. Meanwhile, the high school graduation rate has declined by 4 or 5%, according to Nobel laureate economist James Heckman. So the only thing higher public school spending has accomplished is to raise taxes by about $300 billion annually, without improving outcomes.
According to Baldwin and Borrelli’s 2008 study,
…between 1988 and 2005, state per capita income in the US increases as expenditures on higher education and highways increase, and, contrary to hypothesis one*, as K12 expenditures decrease.
*Hypothesis 1: As state expenditures on education increase, state per capita income growth increases.
