Public Education Spending and Graduation Rates in Michigan
Dr. John Lunn
A belief held throughout much of the industrialized world is that spending on education is an investment in future economic prosperity. Many policy-makers, educators, and citizens unquestioningly assume that higher budgets for education yield better-educated students, who in turn become more productive at their jobs, spurring economic growth. While this appears logical, it is worth investigating these claims to see if increased spending truly is the best way to improve education and to examine the assumption that better education leads to economic growth. This study looks at the first of these two questions by investigating the effects of spending on graduation rates using cross-sectional data on per student spending, allocation of education dollars, graduation rates, and a number of other factors in the state of Michigan’s 301 public school districts with at least 1500 students each. The findings suggest that social factors, especially the racial and economic makeup of the district’s student body, are far more closely related to graduation rates than spending is.
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