INVESTING IN OPPORTUNITY? ASSESSING THE EFFECT OF EDUCATION SPENDING ON INTERGENERATIONAL MOBILITY

The relationship between education spending and student outcomes has been hotly contested for decades. This study attempted to measure whether a systematic correlation between school spending and economic outcomes exists for children born in California between 1978 and 1983. This study used average per-pupil funding estimates based on district-level enrollment and funding data from California public schools between 1995 and 2003, and matched this district level data to economic mobility outcomes at the Census tract level. Mobility outcomes were measured in terms of children’s rank in the income distribution around age 30 relative to that of their parents. After controlling for mean earnings, employment status, poverty levels, average educational attainment, and racial makeup of the community individuals grew up in, this study did not find a significant relationship between either early education or secondary education spending and economic mobility outcomes for White or Native American students. A positive relationship between secondary spending and outcomes was identified for Asian students at the 10th, 25th, and 50th percentiles, suggesting that a $1,000 increase in secondary spending was associated with up to a 0.36 percentage point increase in economic mobility. An inverse relationship between secondary spending and average mobility was identified for Black students born at the 50th percentile, though it is possible that confounding variables related to teacher race contributed to this result. A negative relationship between spending and outcomes also appeared for Hispanic students at the 50th, 75th, and 100th percentiles. Finally, an inverse relationship between elementary school spending and mobility outcomes was identified for Black and Hispanic students at the 25th percentile, which may have been driven by the inequitable effects on minority students of the California K-3 Class Size Reduction Program of 1996.