A recent report written by Bruce Baker and published by the Albert Shanker Institute entitled “Revisiting the Age-Old Question: Does Money Matter in Education?” reviews the available research on this persistent issue and seeks to definitively answer three basic questions:

a)      Does money matter?

b)      Do schooling resources that cost money matter?

c)      Do state school finance reforms matter?

Baker’s answer to each of these questions is “yes”. His analysis primarily reviews studies from peer reviewed academic journals and books, and he considers the major works that argue against the relationship between increased spending and educational outcomes. His major findings include:

-Re-analyses of James Coleman’s 1964 data, using modern statistical techniques and computing capacity, find that school quality substantially impacts student outcomes;

-Scholarly re-analyses of Erik Hanushek’s  oft-cited 1986 paper that set forth a meta-analysis of studies that indicated over-all that money doesn’t matter showed that many of the studies Hanushek used did not  meet designated quality parameters such as inclusion in peer reviewed journals and controls for socioeconomic characteristics;

– Recent studies that reveal a consistent, statistically significant relationship between student achievement and financial inputs;

-Empirical research indicating that court-ordered school finance reforms can have significant positive effects on student outcomes.

Baker also points out that the majority of financial analyses are reported at the district, not school level, limiting the  research base on the key issue of the relationship between school-level spending and student achievement. He also notes that state school finance research has varying degrees of analytic rigor, and there are few studies that connect funding and longer-term outcomes.

Nevertheless, Baker concludes that although money, by itself, is not a comprehensive solution for improving school quality, “the available evidence leaves little doubt: sufficient financial resources are a necessary underlying condition for improving quality education.”