Increase In Education Spending Research Articles

Fiscal Space and Public Spending on Children in Burkina Faso

Despite high growth rates in recent decades, Burkina Faso is still a poor country. The government acknowledges the need for a stronger commitment to reach the Millennium Development Goals (MDGs), particularly regarding the reduction of poverty. At the same time, the Burkinabe budget deficit has grown in recent years in response to various crises which have hit the country. There are strong pressures to rapidly reduce this budget deficit, but there are active concerns about how this will be achieved. The country thus faces difficult choices: how to ensure better living conditions for children, attain the millennium goals and ensure they have a better future in the present budgetary context?To answer this question, three policy interventions were identified: (i) an increase in education spending, (ii) a school fees subsidy and (iii) a cash transfer to households with children under the age of five. The same total amount is injected into the economy in each of the three cases, facilitating comparison between the three scenarios. The discussions also made it possible to identify the three financing mechanisms that appear most realistic: (i) a reduction in subsidies, (ii) an increase in the indirect tax collection rate and (iii) an extension of the timeframe to reduce the public deficit to ten years rather than five.The results indicate that increased public education spending helps raise school participation and pass rates, thus increasing the supply and education level of skilled workers, leading to a reduced incidence and depth of both monetary and caloric poverty.School fees subsidies have more differentiated effects on education: they promote children’s entry into school to a greater degree, but are less effective at inducing them to pursue their studies. Finally, the supply of skilled workers increases slightly, but their average level of education is lower than in the reference scenario. This type of intervention has a beneficial impact on poverty, greater than under increased public education spending.Cash transfers have a limited impact on educational behaviour, and thus on the supply of skilled workers, but substantially reduce the incidence and depth of poverty.The results are qualitatively similar under each financing approach. In sum, if the objective is to achieve improved education and economic performance, the best intervention appears to be to focus on increased public education spending. However, if reducing child poverty is prioritized, it is cash transfers to families that appear more suitable. Regardless of the intervention considered, the most suitable financing mechanism appears to be a temporary increase in the public deficit, because it is accompanied by a smaller negative effect on the quality of life of the most destitute.

Convergence In State And Local Spending On Education: Are Lotteries Ear Marked For Education The Key?

Using Barro regression analysis, this paper finds evidence that per capita state spending on education converged from 1977 to 2006 across the U.S. states. Convergence was conditional on a states passage of a lottery for education during that time period. Despite evidence that the convergence of state education spending was conditional on the passage of an education lottery, the relative increase in education spending among many states that passed education lotteries was much greater than the revenue from the lotteries themselves. So, education lotteries seemed to be part of a larger bundle of policies in low spending states to increase education funding. Of all the functions of state and local government, education is both the largest and the most important. In 2006, state and local government direct expenditures were $2.12 trillion dollars. Direct expenditures on education were $728 billion, just over one-third of the total spending. No other single category of spending in state and local government finance rivals education in the number of dollars spent. There is clear competition among states over education funding. Legislatures and advocacy groups in states lagging behind their neighbors often will cite this fact as a reason to increase education spending. A popular choice among states recently has been to initiate a state lottery with the proceeds earmarked for education. From 1977 to 2006, sixteen states either started lotteries, which dedicated net proceeds exclusively for education, or redefined their existing lottery to earmark net proceeds to education. In every case, the lottery was hailed as a resounding success, but have these sixteen states that passed lotteries for education recently seen a relative increase in funding verses the other states? This paper addresses that question.

Adequate Funding of Education in Georgia: What Does It Mean, What Might It Cost, How Could It Be Implemented?

Adequate education expenditures are what are required to achieve specified educational objectives, such as a specified pass rate on some exam. While defining adequacy is relatively easy, measuring it is another thing. Several methods have been used to estimate the cost of providing an adequate education, but none of them is without its flaws. Based on adequacy studies for other states, we selected a per student expenditure of $7,500 (for FY 2004) as a reasonable estimate of the cost of providing an adequate education in Georgia. To achieve a minimum per student expenditure of $7,500 for all school districts, would have required an increase of 11.8 percent in total state and local spending on education. This increase is before any adjustment for inflation and enrollment growth. This would be a challenge, but not a huge one. To ensure that all school systems in the State have $7,500 per student, the State would either have to require a sizable increase in local property taxes, 5 mills on average, or increase its expenditures on education by up to 82.4 percent, which would allow a substantial reduction in property tax, or some combination of the two. No one knows when or how the Georgia Supreme Court will ultimately rule on the compliant brought by the Consortium of Adequate School Funding in Georgia. But given that most states have lost adequacy suits, the likelihood that Georgia will lose its case is high. The State has several options, but choosing among these options is not easy. The State can assume that it will win the case as it did in 1981, and thus not do anything until the Court rules. (Simply ignoring the issue is tantamount to assuming the State will win.) If the Court does rule in the State’s favor, the State will have no legal requirement to make any changes in the education funding level. However, if the Court rules against the State, the State will be directed to implement changes in education funding, and perhaps major changes. At that point the State can either follow the Court’s ruling or resist the Court, as many other states have done. Alternatively, the State might assume that the Court will rule against it. In this case, the State could choose to begin to address the issue by slowly moving toward an adequate funding of education. But if the Court then rules in favor of the State, the State will have increased education spending to a level that may not have been necessary. Deciding how to proceed is a very difficult decision since there is no one correct decision. It is also a very important decision since the expenditures at issue are very substantial.

Education Spending and State Economic Growth: Are All Dollars Created Equal?

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.

The Personal Vote and the Efficacy of Education Spending

In this article we explore the ways in which incentives to cultivate a personal vote affect the efficiency of education spending in developing democracies. We argue that where the electoral system provides incentives for political particularism, resources are allocated less efficiently and the effect of increased spending on literacy is diminished. We test our hypotheses using data on education spending and performance in over 40 developing democracies since 1980. We find that though personal vote systems spend just as much on education as party vote systems, particularism in personal vote systems dampens the marginal effect of increased education spending on illiteracy and at its highest levels, incentives to cultivate a personal vote completely undermine the positive effects of increased education spending on literacy.

The effect of state education finance reform on total local resources

Both the federal government and the states use intergovernmental grants to try to change the composition of local spending across different programs, as well as the distribution of resources across localities. Many states are now under court order to use state education grants to reduce local disparities in education spending. While a substantial body of literature suggests that these court orders increase the level and progressivity of state education spending, there is little evidence on their broader effects on the total resources available not just for schools in low-income districts, but for other programs across all localities. We find that states finance the required increase in education spending in part by reducing their aid to localities for other programs, particularly for wealthier areas. Thus, while court-ordered school finance equalizations do increase total state aid to localities for education, they do so at the expense of drawing state intergovernmental aid away from programs like public welfare, health, hospitals, and general services. These findings provide insight into the effectiveness of using earmarked funds to achieve redistribution.

Greatest Generation or Greedy Geezers? Social Spending Preferences and the Elderly

Some researchers, policy makers, and media accounts have challenged the equity of U.S. age-based social spending, invoking concerns about generational equity. The generational equity position, as expressed in the U.S. political landscape, attributes Social Security and Medicare's relative political invulnerability to elderly Americans' willingness to support spending on themselves, to the exclusion of spending on others. We use data from the General Social Survey to examine whether the preferences for increased education, health, and Social Security spending expressed by citizens of various age groups are consistent with age-based self-interest. Our findings indicate that arguments for generational spending preferences based exclusively on age are overly simplistic. A greater percentage of elderly citizens favor increased education spending compared to increased Social Security spending, while younger Americans express higher levels of support for increased Social Security spending than do elderly citizens. We find little empirical support for the negative connotations of generational equity as it applies to support for U.S. social spending.

Public schooling, college subsidies and growth

How does the mix of public education expenditures across primary and secondary (K-12) education and post-secondary (college) education influence economic growth? To address this, I build an overlapping generations endogenous growth model. Human capital is accumulated through compulsory K-12 education and through optional college education. Government uses tax revenue to provide quality in K-12 schooling and to subsidize college tuition. When total expenditures are small, all funds should provide K-12 quality. When expenditures are above a critical value, a positive share should subsidize tuition. The share should increase with total expenditures and with the degree of complementarity of human capital accumulated through the two types of education. Also, increased education spending is more likely to increase growth when a larger share subsidizes tuition.

The Effect of Mandated State Education Spending on Total Local Resources

Many states are under court-order to reduce local disparities in education spending. While a substantial body of literature suggests that these orders and the resulting school finance equalizations have increased the level and progressivity of state education spending, there is little evidence on the broader effects of such measures on the change in total resources available not only for schools, but for other local government programs as well. When states spend more on education, both state and local budget constraints change. We find that while mandated school finance equalizations increase both the level and progressivity of state spending on education, states finance the required increase in education spending in part by reducing their aid to localities for other programs. Local governments, in turn, respond to the increases in state taxation and spending by reducing both their own revenue-raising and their own spending on education and on other programs. Thus, while state education aid does increase total spending on education, it does so at the expense of drawing resources away from spending on programs like public welfare, highways, and hospitals. These findings provide insight into the effectiveness of using earmarked funds to achieve redistribution.

States Wrap up the Year

ACCORDING to Mike Griffith, who specializes in school finance at the Education Commission of the States (ECS), during the first nine months of this year our national economy began to experience a slowdown in growth. This economic downturn was made far worse by the terrorist attacks of September 11. Many individuals are now asking how the economic situation will affect state spending for K-12 education. Says Griffith, education spending has already been negatively affected, and the only questions are how big the impact will be and how long it will last. Griffith asserts that over the past five years state policy makers were in the enviable position of being able to increase education spending and cut taxes at the same time. Those times appear to be over - at least in the short term. From 1996 to 2001 per-student expenditures for K-12 education increased by more than 30.6% - more than 13.6% above inflation. Such a large increase would have been difficult to maintain even in good economic times, and in fact a slowdown in state budgets in general and in education spending in particular was evident prior to September 11. A report issued by the National Conference of State Legislatures (NCSL) last March stated that 19 states either had made cuts in their 2001 budgets or were on the verge of doing so. Of those states making cuts, only one - Alabama - was forced to make actual cuts in education spending. Most states were just lowering the rate of increase in education spending for fiscal year 2002. A New Economic Outlook Griffith believes that the states that felt the economic impact of the terrorist attacks first were those that rely heavily on travel and tourism or on energy production. The drop in tourism since the attacks has had an immediate impact on such states as Florida, Hawaii, and Nevada, he says. Meanwhile, the decrease in oil prices has hit such states as Alaska, Louisiana, and Texas. Although some states may have been hit earlier than others, it appears that all states will eventually feel the impact. The nationwide effect on state budgets can be seen in a survey conducted by Stateline.org - a web-based publication that reports on state policy issues. Stateline surveyed all 50 states and found that 40 had determined to freeze spending or make cuts in their current budgets prior to the attack. While most of the states surveyed had not made adjustments to their budgets since September 11, 15 states said they would need to make further budget cuts as a result of the attacks. What Does the Future Hold? Some states, according to Griffith, will be able to avoid budget cuts in the short term because they were able to put excess funds into their accounts. In a study released in August, the NCSL estimated that by the end of fiscal year 2002 the states would have a combined $19.2 billion in their rainy day accounts. These funds are equivalent to only about 10% of yearly state revenue, so this funding will not be sufficient to carry the states through a protracted economic downturn. A few states have already been forced to make some difficult decisions about education spending. For example, Iowa has been forced to delay its teacher Pay for Performance program, which was seen as a possible model for other states. Some states may be forced to follow North Carolina, which chose to increase its sales and income taxes by $1 billion after September 11, in order to accommodate a previously planned pay raise for teachers. Less than a month after this tax increase, it was announced that state departments in North Carolina would have to reduce their budgets by 4%. If the economy does not turn around soon, state policy makers will be in the unenviable position of being forced to decrease education spending, increase taxes, or both. According to Griffith, it's hard to tell if the party is over or if the band is just taking a break. Either way, no one's going to be dancing any time soon. …

Resource shifts in South African schools after the political transition

Although racial data are no longer available, this article uses a 1997 dataset to compare education spending with the pre-democracy situation. The new government emphasised fiscal resource shifts to eliminate spending discrimination rather than changing educational outcomes. Fiscal resource shifts in education and increased education spending were concentrated in formerly black schools. At the geographic level, non-metropolitan regions gained massively. Yet, as qualified teachers remain scarce in poorer schools, fiscal inequalities have remained, also among black schools. In addition, private resources have considerably supplemented the resources of affluent schools. The large spending shift was mainly a fiscal one (higher teacher salaries in poor schools), although real resource shifts (in pupil/teacher ratios) were not insubstantial. However, poor matriculation results indicate that additional resources, whether fiscal or real, were poorly translated into improved educational outcomes. As equity in education should be measured by equitable educational outcomes rather than equity in educational resource allocation, much work remains to be done.

Where the buck stops: class differences in support for education

There has been little critical scrutiny of the extent to which the members of different social classes support current public educational institutions. This paper explores the attitudes toward education of class groups in relation to the declared agendas of class leaders, using public opinion surveys conducted regularly in Canada's economic heartland of Ontario between 1978 and 1996. An analysis of class leaders’ public discourse indicates that corporate leaders stress the waste and inefficiencies of the current school system, the need for market‐driven initiatives to overcome these problems, and a general belief that such reforms coupled with cost reductions and lower government deficits can lead to economic growth and job creation. Some labour union and other leaders associate declining school quality with spending cuts, defend equal access to education, and promote measures such as a reduced normal workweek to address the education‐jobs gap rather than continuing deficit reduction and more reliance on private and individual initiative. Corporate executives are shown to hold much more strongly consensual, fiscally restrictive views on education than other class groups. Other classes hold less consensual but equally coherent and fiscally responsible attitudes on education spending. Professional and managerial class groups, whom some analysts predict to be most disaffected, have only decreased their degree of support for increased education spending and taxes. Support for education funding among working‐class groups has increased since the early 1980s. There is also now at least plurality support for a shorter workweek in all class groups except corporate executives. Corporate business attempts to resettle the social contract with a downsized state education system are so far failing in the realm of public opinion. It is a question of whether we can grasp the real nature of our society, or whether we persist in social and educational patterns based on a limited ruling class, a middle professional class, a large operative class, cemented by forces that cannot be challenged and will not be changed. The privileges and barriers, of an inherited kind, will in any case go down. It is only a question of whether we replace them by the free play of the market, or by a public education designed to express and create the values of an educated democracy and a common culture (Williams 1961: 155)

Understanding Prisons: The New Old Penology

At the end of 1989, more than 675,000 Americans were imprisoned. Most studies estimate that the nation's prison population will easily surpass 1,000,000 before the turn of the century; indeed, one study estimates that as early as 1994 it will reach over 1,130,000.1 The country's annual corrections tax bill is now estimated to be in the neighborhood of $20-$25 billion, with most of the money rushing into the construction, renovation, and administration of prisons. At the state level, for example, in 1987 corrections spending nationwide increased by about 10%, surpassing the rate of increase in education spending for the second consecutive year.2