The effects of spending on test pass rates: evidence from Michigan

This study uses data on standardized test scores from 1992 through 1998 at Michigan schools to determine the effects of spending on student performance. The years in the data set straddle 1994, when Michigan dramatically changed the way that K-12 schools are funded, and moved toward equalization of spending across schools. Focusing on pass rates for a fourth-grade math tests (the most complete and consistent data available for Michigan), I find that increases in spending have nontrivial, statistically significant effects on math test pass rates, and the effects are largest for schools with initially poor performance. (c) 2004 Elsevier B.V. All rights reserved.