Investing in What Doesn't Work

Investing in What Doesn't Work

By Neal McCluskey and Adam Schaeffer - February 6, 2009

President Barack Obama, in discussing the $800 + billion economic stimulus package now working its way through Congress, promised that "we will invest in what works." Well, if that's true, every piece of education spending-- totaling a whopping $150 billion-- in the mammoth stimulus bill should fall by the wayside.

But isn't education one of the best public investments we could possibly make? After all, doesn't spending on education give our students the skills and knowledge they need not just to spur economic recovery, but long-term growth?

No. More and better education may indeed be a good thing, but government spending doesn't give us that. What it gives us is more waste.

Consider elementary and secondary education, which receives the biggest share of the bill's education stimulation.

The average, inflation-adjusted, per-pupil expenditure in the United States was $5,393 in 1970 according to the U.S. Department of Education's Digest of Education Statistics. By 2004 it had more than doubled to $11,470.

And what did we get in return? Almost nothing.

Between 1973 and 2004 mathematics scores on the National Assessment of Educational Progress rose just one percent for 17-year-olds. And math achievement was the good news. Between 1971 and 2004, their reading scores were completely flat.

So much for K-12. How about higher education?

Here too, there's been no dearth of money. According to the State Higher Education Executive Officers, the overall trend for state and local expenditures per full-time-equivalent college student held steady at around $7,000 over the past 25 years. Enrollment, however, increased by more than a third, inflating the overall taxpayer bill. And student aid - most of which came through government - nearly tripled, hitting $10,392.

What are the returns on this outlay? Nada or negative. There isn't much systematic data on higher education outcomes, but what we do have looks discouraging.

Forty percent of people whose highest educational attainment was a bachelor's degree were proficient readers in 1992 according to the National Assessment of Adult Literacy. By 2003, only 31 percent were. For Americans with graduate degrees, 51 percent were proficient readers in 1992. Eleven years later, only 41 percent were. This lack of improvement is not limited reading. Between 1992 and 2003 bachelor's degree holders saw no change in quantitative proficiency, and graduate scores dropped.

Of course, we did get a few things for our money, like campus-based rock climbing walls, nicer dormitories, and ballooning administrative ranks. But these don't increase human capital or confer economic benefits. In fact, economist Richard Vedder has shown that greater state expenditures on higher education are correlated with lower economic growth.

So spending more on elementary, secondary, and postsecondary schooling is a waste. How about pre-kindergarten education? Isn't getting to kids as early as possible is the key to success?

Not so. Head Start, the federal government's flagship early-education program, has received billions of inflation-adjusted dollars every year since 1966, including almost $7 billion last year alone. But there is little evidence that Head Start produces lasting benefits either to society or the children it's meant to help. Indeed, the government's own comprehensive review of the research concluded that while Head Start kids get some initial boosts, "in the long run, cognitive and socio-emotional test scores of Head Start students do not remain superior to those of disadvantaged children who did not attend Head Start."

There is more evidence supporting programs featuring very intrusive and intensive family interventions starting when children are under a year old, at least according to some small-scale research. But no large-scale program has ever accomplished this, and the programs that states have implemented have proven ineffective.

We've spent billions of dollars of public cash on elementary and secondary, higher, and pre-K education, and have received hardly any positive educational returns. Why?

Because politicians spend money so they appear to "care" and to be "doing something" about problems, but once that message is out, whether the money is wasted is of little political importance. Just look at the first round of President Bush's financial bailout - no one is sure where the money went. And education is one of the worst areas for this: Every politician wants to "help" the innocent children, so they've constantly poured good money after bad.

In the end, though, that's neither helped the children nor the economy. It's only helped the politicians.

Neal McCluskey is associate director of the Cato Institute’s Center for Educational Freedom and author of Feds in the Classroom: How Big Government Corrupts, Cripples, and Compromises American Education. Adam B. Schaeffer, Ph.D., is a policy analyst at the Cato Institute's Center for Educational Freedom.

Neal McCluskey and Adam Schaeffer

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