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Thread: How the US actually stands on education spending

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    How the US actually stands on education spending

    In the thread about the cost of Drones, a poster tossed out this meaningless stat below trying to prove that the US spends plenty on Education. That thread isn't about education, so I started a new thread to address more generally the problem with the stats tossed out by people who claim that the there is no problem with the amount the US spends on primary or secondary education.

    Quote Originally Posted by Derec View Post
    It's a myth that US spends little on education.

    The question is, how are these funds spent? I think the education is in the US too politicized, from both left and right, which reduces effectiveness.
    The first problem with that stat is that it makes no sense to present education spending as a % of total spending
    by that government. If two countries of equal population spend the same on education but one country spends twice as much as the other of healthcare for kids, then the country that spend less on healthcare for their kids will have spent a higher % of its total spending on education. Yet, by any reasonable analysis is doing less for their kids, even less for education because unhealthy kids learn less and can't go to school.

    The second and third problem is that the dollars spent are not adjusted for what matters, which is population size and per Capita GDP.

    If you google "education spending by country" most of what you will get is similarly meaningless stats, because they either only adjust for population (per student spending) or only adjust for national GDP, but not both at the same time.
    What matters is per pupil spending adjusted for per-capita GDP, which is highly related to cost of living and the differences in average income between countries. IOW, it not only adjust for what the country can afford to pay given its wealth, but what it needs to pay to produce the same amount of education as in countries where things like school building, books, and a median teacher salary cost less due to overall lower GDP.
    When you do that, the US is below the 33 country OECD average in dollars spent per pupil as a % of per-capita GDP, for pre-school, primary, and secondary education. Only at the college level does the US spend more than the average OECD countries. (see Table on p. 217 of this OECD report)

    The picture actually gets worse when you look at the % of the per pupil "education spending" that is spent on things to directly impact the quality of the instruction. In the US, a much higher % of the education budget goes to paying for schools construction, heating, air-conditioning, etc.. This is because these industries are completely privatized, so taxes spent of "education" are actually spent on making the CEOs and shareholders of energy companies millionaires. Also, new school construction is a larger part of the total "education" spending in the US, and none of that relates to quality of education. New schools are built due to overall population growth, as well as within-country migrations where lots of people move to previously low pop areas. The US has a higher pop growth than all but a few OECD nations, plus we have much higher than typical within-country migrations. The fact that Reno, NV has had to spend hundreds of millions just to have space for the 100% increase in students migrating to the area since 1990, does nothing to improve the per student quantity or quality of education.

    Only a small part of total spending counted as "education spending" in the US is used in a way relevant to the quality of that education. One aspect of relevant spending is how much is spent to obtain high quality teachers.
    Every viable economic theory predicts that attracting and retaining quality educators to the profession is directly determined by the compensation they receive.
    The OECD also has looked at teacher compensation. Of the 20 OECD countries they have data for, the US ranks 16th of 20 in teacher pay relative to per Capita GDP and typical salaries in that country across professions. Yet, the US ranks 3rd in the total classroom hours per year they require of their teachers. In contrast, those 4 countries that have lower teacher salaries than the US, have way fewer required teacher salaries, and rand 15th, 17th, 19th, and 20th in teacher hours. IOW, the US is dead last in GDP-adjusted salary per hours taught.

    In sum, on the valid stats that account for population, cost of living, hours worked, and whether the money is spent on actual instruction, the US ranks between below average to dead last compared to other OECD nations when it comes to spending that could impacts the quality of k-12 education.

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    Spending as a % of total public expenditure is a silly number.

    What's the absolute dollars per student?

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    Quote Originally Posted by ronburgundy View Post
    The second and third problem is that the dollars spent are not adjusted for what matters, which is population size and per Capita GDP.
    Try again. It's a percentage, it's self-adjusting for population size.

    The picture actually gets worse when you look at the % of the per pupil "education spending" that is spent on things to directly impact the quality of the instruction. In the US, a much higher % of the education budget goes to paying for schools construction, heating, air-conditioning, etc.. This is because these industries are completely privatized, so taxes spent of "education" are actually spent on making the CEOs and shareholders of energy companies millionaires.
    Disagree. Public construction generally costs a lot more than private.

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    Quote Originally Posted by dismal View Post
    Spending as a % of total public expenditure is a silly number.

    What's the absolute dollars per student?
    I'd prefer PPP adjusted dollars per student.

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    The question of which is more expensive, private construction or public construction varies widely across the US. However, there isn't much public construction of schools. It is primarily a plum handed out to local contractors by local school boards. This tends to invite high construction costs, the local contractors don't see much reason to compete with one another, rather they seem to divide the work between themselves.


    Some states have taken over the construction of public schools because of this. The one that I am familiar with is South Carolina. They have standardized the construction of schools, based on the school enrollment and the size of the building site and it topography and soil conditions. They contract for more than one school at a time. A very good contractor of mine from Alpena, Michigan was building schools in South Carolina for six years running. We owned part of the company at the time and provided them with some site supervisors when they got too much work.

    This method of standardizing the design of schools came largely from the method used to build prisons.

    State officials in Columbia told me that previously, most local school boards are only interested in three things in South Carolina, who builds the schools, who provides the schools' annual supplies and football. South Carolina took over the first two, but said that they would have another civil war if they messed with football.

    This is about twenty years old, I don't know if it is still being done this way there. We viewed the biggest risk in the business was that the state legislature would cave and turn the construction of the schools back to the control of the local school boards.

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    Question: Do those US spending figures include the cost of Football tickets at the University of Texas?

    We are spending a ton on education, particularly after high-school. I'm not sure we're getting the best value for it.

    aa

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    Quote Originally Posted by Loren Pechtel View Post

    Try again. It's a percentage, it's self-adjusting for population size.
    No it is not. It's only a percentage of total dollars spent, which has no reliable relationship to population size. As I explained, using that useless stat, a country that spends 30 million on 10,000 students and 30 million on other things would get a 50% on that stat, which is twice as high as a 25% score of a country that spends 30 million on 5,000 students and 90 million on other things. Yet the second country actually spends 33% more per student on education.

    SimpleDon covered the issue of "private" versus "public" construction. Other countries tend to have more central control over both education and contracting decisions. But the far bigger difference in cost comes from regional increases in population. When a region sees an influx of people, new facilities need to be built. If the population later declines there is no getting that money back, classrooms just sit empty. So not only does the overall higher pop growth of the US than other OECD countries increase costs, but the US has an extremely high rate of within-country mobility, with about 3% of the US population moves from one state to another every single year.
    not just between states but just between parts of a county that is enough to require new school construction. In fact, the massive variance in school quality and the instability in that quality is among the countless factors that prompt this movement. Parents in the US regularly move from one district to another because it allows them to send their kids to a different school.

    Teacher pay per hour instruction relative to costs of living and pay in other profession is the portion of all spending that most directly relates to quality of instruction rather than differences in costs due to student mobility, pop growth, energy markets, textbook markets, etc.. The second link in my OP (pages 59-60) shows teacher pay relative to per capita GDP (which is a proxy for both cost of living and pay relative to other professions). Relative pay to other professions will directly determine the quality of applicants who enter into and stay in the field, and the amount of effort they feel obligated to put forth. On that metric, the US is last among the 20 OECD countries that have that data for.

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    it should be percentage of GDP.

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    Quote Originally Posted by ronburgundy View Post
    Quote Originally Posted by Loren Pechtel View Post

    Try again. It's a percentage, it's self-adjusting for population size.
    No it is not. It's only a percentage of total dollars spent, which has no reliable relationship to population size. As I explained, using that useless stat, a country that spends 30 million on 10,000 students and 30 million on other things would get a 50% on that stat, which is twice as high as a 25% score of a country that spends 30 million on 5,000 students and 90 million on other things. Yet the second country actually spends 33% more per student on education.
    The thing is social spending will scale with population anyway. You are right about the distribution of social spending proving nothing, though.

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    Quote Originally Posted by Loren Pechtel View Post
    Quote Originally Posted by ronburgundy View Post

    No it is not. It's only a percentage of total dollars spent, which has no reliable relationship to population size. As I explained, using that useless stat, a country that spends 30 million on 10,000 students and 30 million on other things would get a 50% on that stat, which is twice as high as a 25% score of a country that spends 30 million on 5,000 students and 90 million on other things. Yet the second country actually spends 33% more per student on education.
    The thing is social spending will scale with population anyway. You are right about the distribution of social spending proving nothing, though.
    Spending increases with population? One should think so. The question is, does the increase of spending keep up with the needs of the population? Not necessarily. If it does/is, then one has to ask why our public education system is so lackluster when compared to our western neighbors and allies. Why is our classroom equipment and technology decades out of date? Why can't we afford to pay teachers a proper wage so that we attract the best and brightest? This isn't the case with other nations that have comprehensive public education programs so it can't simply be that public education is bad in general. Logic dictates that the flaw is with either funding, execution, or both.
    Sure, shooting them in the back is illegal in those circumstances, but e cop getting convicted is not doing any good to the dead guy.

    -Derec

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