More Money, Same Results? Two Decades of Evidence on School Spending and Student Achievement

Public elementary and secondary education commands a substantial share of state and local government resources in the United States. Based on the 2023 State and Local Government Report published by the Census Bureau,  just over one-fifth of all state and local direct general government spending is devoted to K–12 education, making it the single largest non-federal expenditure category. Data from the National Center for Education Statistics (NCES) shows the nominal spending per pupil increased by 94 percent from $8,044 in 2003 to $15,591 in 2022. After adjusting for inflation, per-pupil spending nationwide increased by 20.4 percent between 2003 and 2022.

Over this period, inflation-adjusted spending per pupil has generally trended upward over time, but the overall upward trend masks many periods of increases and decreases across the years, and varies across the individual states and the District of Columbia.  One important question is whether this overall increase in spending per pupil has delivered a measurable increase in student learning. Here, we look at correlations over time in spending per pupil and in student performance on standardized tests, and the results are ambiguous at best. A paper by PERC shows substantial cross state variations in how changes in spending from 2003 to 2022 align with changes in 8th grade math and reading outcomes.

The Source of the Math and Reading Outcomes

Math and Reading outcomes are evaluated using standardized test scores, which have become a central tool for assessing educational outcomes under federal and state accountability laws. Because state-designed assessments differ widely in structure and content, direct comparisons across states are difficult. To better ensure consistency, we rely on the National Assessment of Educational Progress (NAEP), administered by the National Center for Education Statistics and often called the “Nation’s Report Card.” NAEP uses a common testing framework across all states, assessing student performance in mathematics and reading at different grade levels. The assessment is conducted every two years on a representative sample of students, with results reported at the state level and for selected large districts. Although the testing cycle was disrupted by the COVID-19 pandemic—creating a three-year gap between 2019 and 2022—the NAEP remains the most reliable source for interstate and longitudinal comparisons of student achievement, with the most recent 8th-grade results available for 2024.^[1]

The following dashboard  summarizes statewide patterns by linking the map, indexed chart, and tables interactively. Hovering over a state on the map (top left) updates the indexed line chart (bottom left) to display that state’s 8th-grade math scores, reading scores, and real per-pupil spending, all expressed as index values with 2003 = 1.0. This normalization places spending and achievement on a common scale, allowing changes over time to be compared directly. Index values above 1.0 indicate improvement relative to 2003, while values below 1.0 indicate decline. Hovering over a state also updates Table 1 in the dashboard to show the nominal scores and inflation adjusted spending per pupil over the years for the state selected. The dashboard’s Table 2 presents the same information as Table 1 but for the nation as a whole.

Cross-Sectional Evidence: High Spend, Mixed Results

Figure 1 highlights the long-run disconnect between per-pupil spending growth since 2003 and 8th-grade NAEP math and reading outcomes across states. In 36 states, per-student spending rose after 2003, yet both 8th-grade NAEP math and reading scores declined relative to their 2003 levels, placing them in the dominant “higher spending, lower NAEP scores” category. This group accounts for the large area (teal color) on the map and reflects the national pattern of rising education expenditures alongside weakening achievement outcomes over time.

By contrast, only 6 states managed to convert higher spending since 2003 into higher NAEP scores in both math and reading.  For 8 states, there were mixed-performance categories.  One group of 4 states that had higher spending was associated with higher math scores but lower reading scores, and another 4 states that had higher spending coinciding with higher reading scores but lower math scores. Finally, Idaho stands out as a unique outlier, the only state for which real per-pupil spending declined relative to 2003, yet 8th-grade math scores improved and reading scores remained unchanged, indicating that improvements can occur even in the absence of spending growth. Overall, the map shows that while spending increases since 2003 have been nearly universal, improvements in NAEP math and reading have been relatively uncommon. 

Figure 1: Per Pupil Spending Change vs 8th Grade NAEP Math and Reading Score Change, By State(2003-2022)

While Figure 1 emphasizes changes over time, spending levels themselves also vary widely over time across states. To place the cross-sectional patterns in context, Figure 2 focuses on states with the highest real per-pupil spending in 2022 and the corresponding NAEP outcomes. The table provides a detailed, state-by-state ranking of real per-pupil K–12 education spending in 2022, alongside two key contextual measures: the percent change in real spending per pupil from 2003 to 2022 and student performance on the 2022 NAEP 8th-grade math and reading assessments. At the top of the ranking, the District of Columbia and several Northeastern states—most notably New York, Vermont, New Jersey, and Connecticut—stand out with  high real spending levels, generally exceeding $25,000 per pupil, and long-run real spending increases often above 40% percent since 2003. These high-spending jurisdictions, however, show considerable variation in outcomes: while some post relatively strong NAEP math and reading scores, others perform closer to or below the national average despite their large financial investments.

As the ranking moves downward, states with mid-range spending levels—typically between $17,000 and $22,000 per pupil, such as Pennsylvania, Maryland, Washington, California, and Minnesota—display a mix of moderate to strong NAEP results, with several achieving math and reading scores comparable to or higher than many higher-spending states. In the lower portion of the table, states spending closer to $12,000–$15,000 per pupil, including Texas, Florida, Georgia, and Arizona, generally report smaller real spending increases since 2003, yet some still attain competitive NAEP outcomes, particularly in math. Idaho appears as a notable outlier at the bottom of the spending distribution, with real per-pupil spending below $10,000 and a decline in real spending since 2003, while still recording relatively flat NAEP scores. Overall, the table shows three key patterns, a  dispersion in real spending across states in 2022, widespread real spending growth over the past two decades (with Idaho as the lone exception), and variation in student achievement among both high- and low-spending states.

Figure 2. State Rankings by Per Pupil Spending and NAEP Outcomes in 2022

The experience of U.S. states since 2003 offers a cautionary lesson: rising per-pupil education spending has not been reliably correlated with higher NAEP student achievement.  Even among the highest-spending jurisdictions in 2022—such as New York, Vermont, Connecticut, and New Jersey—academic outcomes have been mixed at best, and in many cases worse than two decades earlier.

These results do not imply that education funding is unimportant. Rather, they emphasize that the returns to spending depend critically on how resources are used. Differences in instructional quality, curriculum rigor, administrative efficiency, student demographics, policy choices, and societal changes are all candidates for explaining the low correlation between educational spending and educational achievement. 

 FOOTNOTE

^[1] NAEP scores are available for 2024, but NCES data on per pupil expenditures is only available up to 2022, so our comparison uses data up to 2022.  In general, overall NAEP scores fell between 2022 and 2024.