Does spending more on higher education stimulate economic growth and development? | Eastern North Carolina Now

Does spending more on higher education stimulate economic growth and development?

For a select few, the answer is yes. But not for the taxpayer.

    A million years ago I did my doctoral dissertation on court cases that dealt with school spending's impact on student achievement. I spent an entire summer in the Duke Law Library researching this question: Does more money produce better education results?

    What I found was that the answer to that question was "no." Relatively small increments of increases in spending produced no statistically significant changes in student performance by any measure one chose to use. However, to be honest, the absence of money did make a significant difference. In other words, schools and school systems that spent considerably less than the average for the population within which they existed did much more poorly in student performance than other school system who spent more. I went into my dissertation defense and argued (quiet extensively as I recall) with one member of my panel that a school/system having a critical mass of funding was essential for good education but that incremental increases would not produce any meaningful affect.

    I recall the end of
Results do not identify a statistically significant relationship between K-12 education spending and economic growth.
our debate. He asked me: "Mr. Blinson, if money does not matter, even a bit more money, why do those who have it fight so hard to keep the ones that do not have it from getting more (of the rich ones' share)?" I'll not tell you what my answer was, but I will tell you he voted to give me my degree. I will tell you my conclusion: Money (in education) matters, but it is not the only thing that matters. Money does not guarantee quality but you seldom have quality without it.

    North Carolina is griped in the throes of a huge debate about how much money it is going to spend on higher education, particularly the University of North Carolina system. The Republican controlled General Assembly has put the clamps on the UNC system. That system has responded by raising tuition, fees and other charges it assesses on students.

    One of the arguments the UNC people make is that spending on higher education produces economic growth and development in the state. But that is seldom challenged and even less frequently documented.

    What has been documented
...increased spending on higher education generally exhibits a relatively large negative effect on private sector employment or gross state product growth...
is that much of the increase in spending goes to hire more non-teaching, often very high paid people in the University system. You can read more about that phenomenon in an article written by Daniel J. Mitchell in TownHall.com, with links to substantiating material, by clicking here. And for what it's worth, the same thing has happened in K-12 budgets. The increase in non-teacher expenses has been much greater than in teacher-related expenses (teacher salaries and regular classroom teacher allotments). And speaking of teacher allotments, we would remind you that similar research has shown over and over that incremental decreases in class size have essentially no impact on student achievement.

    The article linked above, written by Daniel J. Mitchell in TownHall.com, raises another issue that has produced much less research than has per pupil spending and class size. That is, "what impact does spending increases on university education have on the economic growth and development of the state in which it is spent?

    Mitchell cites a study done in 2009 that examined that question and here is the published abstract of the study:

    This article contributes to the literature on the effect of state and local education spending on U.S. state economic growth by separately analyzing higher and K-12 education spending and by taking into account the possibility that education spending may generate spillover effects to neighboring states. Results from a series of fixed-effects regressions using a 1992-2002 panel of state-level data indicate that increased spending on higher education generally exhibits a relatively large negative effect on private sector employment or gross state product growth when the increase in education spending is financed through own-source revenue. Results do not identify a statistically significant relationship between K-12 education spending and economic growth. This finding is an important clarification in the literature because an analysis of combined higher and K-12 education spending yields an overall negative effect. Results do not provide consistent evidence of cross-state spillover effects associated with either form of education spending. See: Education Spending and State Economic Growth: Are All Dollars Created Equal?

    So what does all this mean? Simply that spending more money does not produce better results--except for feathering the nest of a select few, mostly administrators and bureaucrats. But not spending more does not produce better results either. The trick is how you spend what you do have.

    Delma Blinson writes the "Teacher's Desk" column for our friend in the local publishing business: The Beaufort Observer. His concentration is in the area of his expertise - the education of our youth. He is a former teacher, principal, superintendent and university professor.
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