Let No Child Be Left Behind: Determining the Cost of Improving Student Performance

Abstract

The No Child Left Behind Act of 2001 and recent legislation in a number of states have raised the standards for accountability in schools, with the objective of closing achievement gaps and increasing student performance overall. These new education policies, however, rarely address the way in which schools are financed. They ignore the fact that characteristics of schools and students require that some schools spend more than others to achieve any given student performance standard. To determine the characteristics that lead to variations in the costs of achieving a specified improvement in student performance, the authors estimate an educational cost function using data from elementary and secondary school districts in Texas. Results indicate that cost differences across districts can be quite large. The cost function results are summarized into a cost index that can then be used in a simple formula to guarantee that every district has sufficient fiscal resources to achieve state-imposed performance goals.