Prosperity Watch, Issue 57. No. 3: School funding key to students’ economic prospects

Well-resourced schools can work economic wonders in the lives of individual students and entire communities. A new national study finds that increasing investment in schools that serve struggling communities makes it more likely that students in those schools will rise out of poverty and earn a decent living.

As shown in the chart, a 10 percent increase in school funding is associated with students earning 10 percent more over the course of their careers. Students in schools that received additional funding were also more likely to graduate and less likely to live in poverty.

The study takes advantage of a natural experiment of sorts. The research examines how court-mandated funding increases for some school districts during the 1970s and 1980s impacted students’ long-term academic and economic prospects. The analysts then tracked student income over the next thirty years and found strong evidence that attending better-resourced schools has incredibly durable economic benefits.

These lessons should carry more weight in how we make education policy. Struggling communities often lack the property tax base needed to support adequate school funding, so if the state does not help to fill the gaps, students in those schools are more likely to remain in poverty as adults.

If we want an economy that really works for everyone, we must ensure that every child in North Carolina attends a well-funded school that prepares them for a challenging job market. 

Research & Publications: