Posted on April 21, 2011

The Myth of Racial Disparities in Public School Funding

Jason Richwine, Ph.D., Backgrounder #2548 (Heritage), April 20, 2011

Abstract: Achievement disparities among racial and ethnic groups persist in the American education system. Asian and white students consistently perform better on standardized tests than Hispanic and black students. While many commentators blame the achievement gap on alleged disparities in school funding, this Heritage Foundation paper demonstrates that public education spending per pupil is broadly similar across racial and ethnic groups. To the extent that funding differences exist at all, they tend to slightly favor lower-performing groups, especially blacks. Since unequal funding for minority students is largely a myth, it cannot be a valid explanation for racial and ethnic differences in school achievement, and there is little evidence that increasing public spending will close the gaps.

In 2009, white public school eighth-graders outscored their black classmates by one standard deviation (equivalent to roughly two and a half years of learning) on the math portion of the National Assessment of Educational Progress (NAEP) test. Racial differences in achievement like this one are pervasive in the U.S. education system, and the gaps have persisted for decades.

The Program for International Student Assessment (PISA), a standardized test battery given to 15-year-olds in all 34 OECD countries, puts the gaps in stark terms. If white American students were counted as a separate group, their PISA reading score would rank them third in the world. Hispanic and black Americans, however, would score 31st and 33rd, respectively.

Blaming “Unequal Funding.” A common hypothesis is that Hispanic and black students perform worse in school because less money is spent on them. In 1995, Columbia University’s Linda Darling-Hammond claimed, “The resources devoted to the education of poor children and children of color in the U.S. continue to be significantly less than those devoted to other American children . . . and it is these inequalities that create and sustain the ‘bell curve’ of differential achievement.”

Part of the NAACP’s official statement on education policy reads: “Quality public education for African American and Latino students is persistently threatened as a direct result of inequitable school funding.”

Responding in 2001 to criticism that blacks and Hispanics perform poorly on the SAT, College Board President Gaston Caperton declared, “Tests are not the problem. . . . The problem we have is an unfair education system in America–an unequal education system.”

Even conservative author John McWhorter, while downplaying structural and institutional explanations for the racial achievement gap, still asserts that the alleged funding disadvantage for black students “is a real one.”

These commentators are mistaken on two levels. First, increasing school spending has rarely led to better outcomes. Second, and more fundamentally, based on data from the U.S. Department of Education itself, the assumed funding disparities between racial and ethnic groups do not exist.


Data and Methods

This paper uses two datasets published by the Department of Education’s National Center for Education Statistics (NCES). The Secondary School Universe Survey for the 2006–2007 school year provides the racial and ethnic breakdown of schools across the nation; the Financial Survey for the 2006–2007 school year contains detailed expenditure and revenue data for public school districts. Merging these two datasets allows expenditures to be weighted by the racial composition of each district, creating per-pupil expenditures for each group.

Specific Procedure. In each district, the number of white students is multiplied by per-pupil spending to generate the total spending on white students, district by district. The district totals are summed to create a national grand total of spending on white students. That grand total is then divided by the total number of white students across the country, producing the national per-pupil figure for white students. The same procedure is repeated for each racial and ethnic group.


Cost-of-Living Adjustment. {snip}

Cost adjustments should be regarded cautiously. Living expenses can still vary within markets, sometimes considerably. The District of Columbia, for example, is a high-expense city overall, but its poorest (and mostly black and Hispanic) sections have a lower cost of living than the white sections. While the raw data are likely to overstate the minority school funding advantage, the adjusted data probably understate it. Nevertheless, the CWI is the best dataset currently available for making cost adjustments.


Table 1 displays three columns of results. The first shows the raw per-pupil spending figures for whites, blacks, Hispanics, and Asians. The second column shows per-pupil spending on white students. The third column adjusts this percentage with the CWI to reflect differences in the cost of living. All three data points for each group are then broken down by census region.

Nationwide, raw per-pupil spending is similar across racial and ethnic groups. The small differences that do exist favor non-white students. After breaking down the data by region, the non-white funding advantage becomes more pronounced. In the Northeast, for example, blacks receive over $2,000 more than whites in per-pupil funding per year. The region with the smallest differences is the South, where spending on black and Hispanic students is only slightly higher than on whites.

Adjusted for cost of living, the differences narrow. Asian and Hispanic students receive slightly less money than whites overall, while blacks receive slightly more. Regional differences persist after the adjustment, especially in the Northeast.


The results in the previous section are straightforward–minority students receive about as much public school funding as white students. {snip}



Although it is often blamed for the racial achievement gap, unequal school funding is largely a myth. Per-pupil spending in the U.S. is broadly similar across racial and ethnic groups. If any one group enjoys an advantage in funding, it is black students, especially in the Northeastern states. Group differences in school achievement cannot be the result of an unequal commitment of resources to minority students, and simple increases in public school funding are not likely to close the gaps.

[The mathematics and notes are available with the original paper.]