Long Run Growth in Real Per Pupil Public Education Spending

Long Run Education Expenditures

Real per pupil education spending for elementary and secondary schools has increased roughly 23X since 1920. While there are many causes for this increase (special ed availability, reduced student teacher ratios, etc) and spending more on education is often a good thing (see Katz & Goldin or this post for instance), it’s hard not to be struck by the magnitude of this increase in real per pupil spending, especially since I strongly doubt outcomes have gotten anywhere close to 23X better.

The striking rise in cost without a concomitant rise in outcomes echoes the performance of the healthcare sector and suggests that an underlying cause may be contributing to raising costs in both sectors. Baumol’s cost disease is a prime suspect.

HT: Jesse Rothstein on the figure and other reasons for education spending increase.

About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar. http://faculty.chicagobooth.edu/owen.zidar/index.html
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