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Does money matter for schools?

Holmlund, Helena, McNally, Sandra and Viarengo, Martina (2010) Does money matter for schools? Economics of Education Review, 29 (6). pp. 1154-1164. ISSN 0272-7757

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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 per cent 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.

Item Type: Article
Official URL:
Additional Information: © 2010 Elsevier
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
L Education > L Education (General)
Journal of Economic Literature Classification System: I - Health, Education, and Welfare > I2 - Education > I21 - Analysis of Education
H - Public Economics > H5 - National Government Expenditures and Related Policies > H52 - Government Expenditures and Education
Sets: Research centres and groups > Centre for the Economics of Education (CEE)
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 20 Jul 2010 08:36

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