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Does money matter for schools?

Centre for the Economics of Education IZA Discussion papers (2010) Does money matter for schools? Economics of Education Review, 29 (6). pp. 1154-1164. ISSN 0272-7757

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Identification Number: 10.1016/j.econedurev.2010.06.008


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
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
L Education > L Education (General)
JEL classification: 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
Date Deposited: 20 Jul 2010 08:36
Last Modified: 16 Jul 2024 07:15

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