ERIC Digest 119 - March 1998
School Productivity
By Margaret Hadderman
The current debate over the cost-effectiveness of America's schools
is sparked by the public's desire for increased accountability and
efficiency in public education, now a $300 billion enterprise.
Taxpayers want to know where their money is going and whether
additional funds are justified.
Researchers are themselves divided. Some find that dramatic
increases in funding over recent decades have brought little or no
advancement in student achievement. Others are more optimistic,
claiming that some expenditures are tied to improved achievement.
Experts do agree on three points: resources are shrinking; research
should examine how funds are actually spent; and schools must
discover more cost-effective ways to allocate and utilize existing
resources.
Is There a Relationship Between Educational Funding and Student
Outcomes?
Early production-function research, modeled on classical economic
theory, tried to correlate a set of educational "inputs" to a single
"output." Most of these studies were inconclusive. Because of the
complexity of the schooling process and factors (like child poverty)
outside schools' control, it has been difficult to isolate
statistically significant one-to-one correlations between inputs and
student learning.
The most common outcomes measured in such studies are
standardized test results, graduation rates, dropout rates, college
attendance patterns, and labor-market outcomes. Inputs usually
include per-pupil expenditures; student-teacher ratios; teacher
education, experience, and salary; school facilities; and
administrative factors (Lawrence Picus 1995).
The most famous production-function study was the U.S. Department
of Education's 1966 "Coleman Report." This massive survey of 600,000
students in 3,000 schools concluded that socioeconomic background
influenced student success more than various school and teacher
characteristics (Picus 1995).
This type of research culminated in Eric Hanushek's 1989 study,
which analyzed results of 187 production studies published during the
previous 20 years. Using a simple vote-counting method to compare
data, Hanushek found no systematic, positive relationship between
student achievement and seven inputs.
Hanushek's findings have been challenged by recent studies using
more sophisticated research techniques. When Larry Hedges (1994) and
associates reanalyzed Hanushek's syntheses using meta-analysis, they
discovered that a $500 (roughly 10 percent) increase in average
spending per pupil would significantly increase student achievement.
Likewise, Faith Crampton's comprehensive analysis (1995) of inputs
affecting achievement in New York State schools found that
expenditures seemed to matter when they bought smaller classes and
more experienced, highly educated teachers.
What Are Some Reasons for Schools' Productivity Problems?
Although low student performance can be blamed partly on
deteriorating social and economic conditions, lack of student effort,
and diminishing parental involvement, several factors are
controllable by schools.
Allan Odden and William Clune (1995) point to poor resource
distribution across states, districts, schools, and students;
unimaginative use of existing funds; schools' bureaucratic structure;
and focus on services and labor-intensive practices that drive up
costs.
A report from the Consortium on Productivity in the Schools
(1995) attributes flat productivity to schools' "unstable governance,
lack of incentives to leverage productivity improvement, structures
favoring continuity over continuous improvement, and inadequate
quality controls on innovations." Students' time could also be used
more effectively.
School-district budgeting practices are also at fault. Educators'
inability to obtain accurate school-level spending data is a "major
impediment to efficient planning, equitable distribution, and client
choice," says James Guthrie (1994).
A study of teacher compensation between 1970 and 1994 discovered
another inefficient practice &emdash; paying disproportionately high
salaries to veteran teachers. This practice obviates districts'
expressed goals to attract and retain the best and brightest new
teachers (Lankford and Wyckoff 1997).
Some researchers claim that regardless of available funding,
"school districts tend to utilize their resources in the same basic
proportions," with 60 percent earmarked for direct instruction and
about 40 percent going for support services (Picus 1995). Others have
shown that most new funding dollars over the past 30 years have gone
for specialists and services, not the core instructional program
(Odden 1997).
What Would Productive Schools Look Like?
Combing the productivity, systems-analysis, and
social-organizations literature, the Consortium on Productivity in
the Schools (1995) discovered that clear focus, responsive internal
and external adaptation mechanisms, intrinsic and extrinsic
incentives, and continuous improvement were essential traits.
Employing the "x-efficiency" concept, which holds that dramatic
organizational changes will produce greater efficiency gains than
reallocation of resources, Henry Levin (1997) identifies five
dimensions of productive firms. X-efficient schools would have a
clear, objective function with measurable outcomes; incentives linked
to success; efficient access to information; adaptability; and use of
the most productive, cost-effective technologies. These
characteristics resemble those identified in the literature on
effective schools and total quality management.
What Are Some Promising Research and Policy Directions?
Some research, like Crampton's study of New York schools, has
isolated the types of expenditures that matter in the
school-productivity equation. A good example is Harold Weglinsky's
study (1997), which found that fourth- and eighth-graders' math
achievement was positively associated with lower student-teacher
ratios and with expenditures on instruction and school-district
administration. Expenditures on facilities, recruitment of highly
educated teachers, or school-level administration were not
significantly related.
Another kind of efficiency research explores schools'
resource-allocation practices. David H. Monk (1996) examined how
teacher resources are distributed and utilized at various levels of
the New York State K-12 system. The study found a 55 percent increase
in secondary-level special-education instructional resources between
1983 and 1992, alongside modest increases in allocations of science
and math teachers. Of course, legal mandates may prevent an
"efficient" distribution of teacher resources across different
subject areas.
In another cost-allocation study, Bruce S. Cooper and associates
(1994) developed and applied a microfinancial measure, the School
Site Allocation Model, to track financial resources through school
systems. Test-site data from twenty-five school districts were
analyzed to provide indicators of cost ranges required to operate
central offices and schools. The model effectively reported schools'
usage of funds by function (administration, operations, staff
development, student support, and instruction), level, and type in a
"user-friendly" manner.
A third research area takes an organizational-development or
restructuring approach to improving school productivity. An example
is Levin's "x-efficiency" study of schools using the Accelerated
Schools model to improve efficiency along five dimensions.
What Are Some Practical Strategies and Implications for
Schools?
One obvious strategy is to reduce noninstructional expenditures
through such means as conserving enery and restructuring food-service
programs.
Another strategy is to restructure the instructional program.
Odden (1997) points to Karen Miles and Linda Darlington-Hammond's
work with five "high-performance" urban schools. By imaginatively
reallocating existing teaching staff, these schools reduced class
size, personalized the learning environment, and expanded staff
development. Ready-made high-performance models like New American
Schools, Accelerated Schools, and the Edison Project can also aid
schools' redesigning process.
Odden and Clune (1995) recommend that schools focus on clear
outcomes (such as the 1990 National Education Goals), change teacher
compensation to make beginners' salaries more competitive and
veterans' remuneration more knowledge-based; make educational
management more decentralized and participatory; and restructure
school financing to be more equitable and goal-directed.
Some states' funding systems link schools' expenditures and
outcomes into their funding systems, and several other states provide
financial rewards for raising student achievement.
Resources
Consortium on Productivity in The Schools. "Using What We Have: A
Productivity Focus for American Education." New York: Author, 1995.
103 pages.
Cooper, Bruce S., and others. "Making Money Matter in Education: A
Micro-Financial Model for Determining School-Level Allocations,
Efficiency,and Productivity." Journal of Education Finance 20
(Summer 1994): 66-87.
Crampton, Faith E. "Is the Production Function Dead? An Analysis
of the Relationship of Educational Inputs on School Outcomes." A
presentation to the Annual Conference of the American Education
Finance Association, March 1995.
Guthrie, James W. "Implications for Policy: What Might Happen in
American Education If It Were Known How Money Actually Is Spent?" In
Where Does the Money Go? Resource Allocation in Elementary and
Secondary Schools, edited by Lawrence O. Picus and James L.
Wattenbarger. Thousand Oaks, CA: Corwin Press, 1996. Pages 253-68. ED
403 659.
Hanushek, Eric A. "The Impact of Differential Expenditures on
School Performance." Educational Researcher 18, 4 (May 1989): 45-51,
62. EJ390 070.
Hedges, Larry V.; Richard D. Laine; and Rob Greenwald. "Does Money
Matter? A Meta-Analysis of the Effects of Differential School Inputs
on Student Outcomes." Educational Researcher 23, 3 (April
1994): 5-14. EJ484 418.
Lankford, Hamilton, and James Wyckoff. "The Changing Structure of
Teacher Compensation, 1970-1994." Economics of Education
Review 16, 4 (1997): 371-84.
Levin, Henry M. "Raising School Efficiency: An X-Efficiency
Approach." Economics of Education Review 16, 3 (1997): 303-11. EJ 547
333.
Monk, David H. "Resource Allocation for Education: An Evolving and
Promising Base for Policy-Oriented Research." Journal of School
Leadership 6, 3 (May 1996: 216-42. EJ527 501.
Odden, Allan, and William Clune. "Improving Educational
Productivity and School Finance." Educational Researcher 24, 9
(December 1995):6-10, 22. EJ519 250.
Odden, Allan. "Raising Performance Levels Without Increasing
Funding." School Business Affairs 63, 6 (June 1997): 4-12. EJ
547 295.
Picus, Lawrence O. "Does Money Matter in Education? A
Policymaker's Guide." In Selected Papers in School Finance 1995,
edited by William J. Fowler. 19-35. Washington, D.C.: National Center
for Education Statistics, 1997. ED408 691.
Wenglinsky, Harold. When Money Matters. Princeton, NJ: Educational
Testing Service, 1997. 44 pages.
This publication was prepared with funding from the Office of Educational Research and Improvement, U.S. Department of Education, under contract No. OERI RR93002006. The ideas and opinions expressed in this Digest do not necessarily reflect the positions or policies of IES, ED, or the Clearinghouse. This Digest is in the public domain and may be freely reproduced.
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