There is considerable disagreement in the academic literature about whether raising school expenditure improves educational outcomes. Yet changing the level of resources is one of the key policy levers open to governments. In England, school expenditure has increased by about 40% since 2000. Thus assessing whether such spending has had an impact on educational outcomes is of paramount importance. We address this issue using data of better quality than what are often available in similar studies and test our identification assumption by use of a falsification test. We find that the increase in school expenditure over recent years has had a consistently positive effect on outcomes at the end of primary school. Back-of-envelope calculations suggest that the investment may well be cost-effective. There is also some evidence of heterogeneity in the effect of expenditure, with higher effects for students who come from economically disadvantaged backgrounds.

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1 December 2010

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Economics of Education Review 29(6) , pp.1154-1164, 2010

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DOI: 10.1016/j.econedurev.2010.06.008

https://www.sciencedirect.com/science/article/pii/S0272775710000737

This Journal article is published under the centre's Education programme.

This publication comes under the following theme: Determinants of school performance: Resources, pedagogy, workforce and peers