This paper explores and expands upon the work of Hanushek and Wößmann (2007) whose accumulated findings propose increased educational spending provides only marginal returns in terms of student’s cognitive outcomes. This study constructs an OLS regression model to explore the significance of U.S. state education spending and financial allocations as independent factors of state-level average ACT scores over a 10-year time series. The model additionally accounts for self-selection and socio-economic status. The results of this study support Hanushek and Wößmann’s conclusions while also demonstrating evidence that shifts in allocations towards instructional spending, as opposed to increasing total expenditures, could have a more substantial impact on returns to educational quality.
"Modelling Public-Education Spending vs. Allocation as Independent Factors of Educational Outcomes,"
Undergraduate Economic Review: Vol. 13:
1, Article 10.
Available at: https://digitalcommons.iwu.edu/uer/vol13/iss1/10