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More than a million students are enrolled in highly inefficient districts, says the report.

If education were a business…

More than a million students are enrolled in highly inefficient districts, says the CAP report.

A controversial new study published by the Center for American Progress (CAP) analyzes K-12 school districts based on their productivity: the academic achievement a district produces relative to its education spending.

CAP researchers call their new index for evaluating school systems “educational productivity,” and according to the study, low efficiency costs the nation’s school systems as much as $175 billion a year in unproductive spending. Released last week, the report was blasted by many critics who argued that the success of a school system cannot be measured like that of a business.

“At a time when states are projecting more than $100 billion in budget shortfalls, educators need to be able to show that education dollars produce significant outcomes—or taxpayers might begin to see schools as a weak investment,” says the report.

Called “Return on Educational Investment: A district-by-district evaluation of U.S. educational productivity,” the report was written by Ulrich Boser, a senior fellow at CAP and research director of “Leaders and Laggards”—a joint project of the CAP, the U.S. Chamber of Commerce, and Rick Hess of the American Enterprise Institute that evaluates systems of education.

The study is not meant to undermine the need for education spending, or limit schools’ resources, CAP says; but rather, to explore whether education systems can be evaluated like companies: If public education were a business, with school districts as its franchises, would the business remain open? Would its customers ultimately be happy, or would they demand refunds?

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According to the study, a year-long effort that analyzed more than 9,000 school districts in more than 45 states, after adjusting for inflation, education spending per student has nearly tripled over the past four decades. “But while some states and districts have spent their additional dollars wisely—and thus shown significant increases in student outcomes—overall student achievement has largely remained flat,” the report says.

Besides Luxembourg, the U.S. spends more per student than any of the 65 countries that participated in the recent international reading exam from the Organization for Economic Cooperation and Development (OECD), the report says—and while Estonia and Poland scored at the same level as the U.S. on the exam, the U.S. spent roughly $60,000 more to educate each student to age 15 than either nation.

Boser and a panel of experts relied on education spending data from the 2008 school year, the most recent available, as well as on the results of 2008 state reading and math assessments in fourth grade, eighth grade, and high school.

Educational productivity was measured based on a district’s return on investment (ROI), controlling for differences in special education, low-income students, and living costs. This measure rates districts on how much academic achievement they get for each dollar spent, relative to other districts in their state.

The report’s main finding is that many school districts could “boost student achievement without increasing spending if they used their money more productively.”

An example of this is an Arizona school district that could see as much as a 36-percent boost in achievement if it increased its efficiency from the lowest level to the highest, all else being equal, the report said.

Another finding is that without controls on how additional school dollars are spent, more education spending will not automatically improve student outcomes.

To illustrate this point, the report cites the Wisconsin school systems of Oshkosh and Eau Claire: the districts are about the same size and serve similar student populations. They also get largely similar results on state exams; however, Eau Claire spends an extra $8 million to run its school system.

Another example is California, which earmarked more than $41 million in 2009 to hire additional gym teachers to combat childhood obesity. “This, despite there being no shortage of gym instructors in the state, or any evidence that increasing the number of gym teachers reduces obesity. Worse,” says the report, “the grants are not even targeted at schools with large percentages of overweight students.”

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“In more than half of the states included in our study, there was no clear relationship between spending and achievement after adjusting for other variables, such as cost of living and students in poverty,” said Boser.

Other findings include:

• Low educational productivity reportedly costs the nation’s school systems as much as $175 billion a year.

• More than a million students are enrolled in what the report calls “highly inefficient” districts.

• High-spending school systems are often inefficient.

• Students from disadvantaged backgrounds are more likely to be enrolled in highly inefficient districts.

• The nation’s least-productive districts, as defined by the report,  spend more on administration.

• States and districts fail to evaluate the educational productivity of their districts and schools.

• The quality of state and local education data is often poor.

• Educational productivity varies widely within states.

• Some urban districts are far more productive than others.

• “Highly productive” districts are focused on improving student outcomes.

So far, only two states—Florida and Texas—provide data to their districts on how well they use education spending, says Boser.

“Districts are so used to being told where to put their dollars in order to remain compliant, they haven’t thought of how they could use money innovatively to improve productivity. It’s an issue of culture,” said Jacob Adams, professor of education at Claremont Graduate University, during a conference at CAP headquarters Jan. 19.

The CAP report is more blunt in explaining why more states and school systems don’t measure educational productivity: “Schools and districts have long been effective at deflecting or watering down meaningful change in order to protect entrenched bureaucracies and interests,” it says.

Several critics of the report have fired back, arguing that it’s a mistake to measure or compare educational productivity based on student achievement. Even when comparing similar student populations, there are huge variances from one district to another that make such comparisons unfair, they say.

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“The aspects of education that can be looked at like a business are the non-instructional components: facilities, cafeteria, transportation, security, human resources, and the business office,” said Dan Domenech, executive director of the American Association of School Administrators. “Productivity and efficiency can and should be determined in those areas.”

He continued: “The instructional side of the equation is more difficult to gauge as a business. It is a public service that must accept all comers, is not expected to make a profit, is highly regulated by laws and codes, and is highly influenced by community pressures and politics.”

Diane Ravitch, an education researcher at New York University, put it this way: “This is quite simply an abhorrent way to measure the quality of education. Education is not a business. We can’t know its value for many years.”

CAP’s recommendations

The report presents several recommendations, with one being that policy makers promote educational productivity and conduct further research on this issue.

“We agree that there needs to be a discussion on district productivity and that more research be done,” said Jim Shelton, assistant deputy secretary for Innovation and Improvement at the U.S. Department of Education, “and we also need more transparent data from the states.”

The report recommends that states and districts report far more data on school performance, but Shelton says there’s more at issue that just sending in reports.

“After we were shown this report, we went and gauged local opinions and feelings on this, and while there’s a high level of political willingness to discuss this issue of productivity and examine its implications, districts and states need the tools and know-how to produce this kind of data,” Shelton said. “Most districts and states don’t currently have these.”

The report also recommends that states and districts reform school management systems to ones that focus on performance and are “flexible on inputs and strict on outcomes.” It says state and federal governments “should also provide educators with the tools, technology, and training required to succeed with limited school dollars.”

Finally, the report recommends that education leaders should encourage smarter, fairer approaches to school funding, ones that direct money to students based on their needs, so that all schools and districts have an equal opportunity to succeed.

To help districts, states, federal experts, and the public learn more about how districts compare from state to state, CAP has created a website that color-codes districts within states, categorizing each district based on its educational productivity.

The full report also details some best practices of districts found to be most efficient, such as a willingness to make tough choices, strong community relations, and smart use of data.

For more school reform news:

School Reform Center at eSN Online

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Should student test scores be used to evaluate teachers?

But even with these recommendations, attendees at the CAP conference voiced their concerns about a focus on educational productivity.

“What incentives are there for educators to move from the idea of compliance to innovation, especially when jobs are on the line right now?” asked one attendee.

“What will a focus purely on productivity mean for special programs and extra curriculars, like sports or after-school programs?” asked another.

“If we want to change our culture to one of efficiency,” asked an attendee, “do we do it with marginal changes, like moving away from seat-time requirements, or do we make huge systemic changes?”

“It’s the question of ‘What are we trying to accomplish in schools,’ and it’s a question that we’ve been trying to answer in different ways for decades,” said Adams.


“Return on Educational Investment: A district-by-district evaluation of U.S. educational productivity”

Center for American Progress

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