If school finances are tight, should salaries be allowed to lag inflation, or should the number of employees be gradually reduced through attrition? Which is more important: holding salaries intact or keeping class sizes small? As we approach what many fear is a fiscal cliff, what choices should school districts make with respect to the largest item in their budgets?
One way to think about the issue is to look at what has happened in the past when school revenues rapidly increase. What did districts do? What were the consequences?
Nationwide, school expenditures, even after adjusting for inflation, leapt forward by 20 percent between 2002 and 2020, according to a Reason Foundation analysis of U.S. Department of Education data. Despite the large fiscal increment, the number of teachers increased by just 7 percent, the same rate as the increase in the number of students. Teacher salaries barely kept pace with inflation.
So what drove up the cost of schooling over that 18-year period? Multiple factors were at work, but the two most important were a rise in employee benefit costs and a steep increase in the number of non-teacher employees. The nation’s school districts paid 75 percent more to cover the costs of employee health, pension, and other benefits in 2020 than they did in 2002. And the size of their non-teacher staff rose by 20 percent.
Are school districts spending their extra dollars wisely? To explore this topic, Carlos Lastra-Anadón and I, in a presentation at the meetings of the American Political Science Association, look at what happens to student achievement when a district hires additional employees—and how the answer differs when the added employees are teachers, teacher aides (paraprofessionals), other school staff, or employees who work in district offices. We look at the effects on achievement when districts hire more employees per a given number of students than comparable districts within the same state. Put another way, we look at changes in per-pupil employment within each district relative to changes in similar districts elsewhere within the state.
Our achievement data are taken from the National Assessment of Educational Progress, a low-stakes test not used for accountability purposes. We adjust for a large number of social, economic, and demographic characteristics when comparing achievement levels across districts.
We find that the effects on achievement of hiring additional employees differs depending on whether a state has a duty-to-bargain law—that is, a law that requires districts to bargain with a union representing teachers. Thirty-seven states have such laws. They are located mainly in the Northeast, the Midwest, and along the Pacific coast. Most states without duty-to-bargain laws are in the South and Mountain regions.
We are still refining our analysis, but our early results indicate that the recent run-up in non-teacher employment is not as troubling as it seems. In states without a duty-to-bargain law, hiring other school employees yields at least as much gain in math achievement as hiring additional teachers. If districts have a shortage of employees who provide nutritional, medical, social, psychological, and other needed services, then hiring more of them may be beneficial. The need for additional hires may be especially large in states without duty-to-bargain laws.
However, we find no gains in math achievement from hiring additional teacher aides, a finding quite consistent with prior research.
A strange finding pops up. In states without a duty-to-bargain law, hiring an additional employee to work in the district office has a negative effect on math learning. We interpret that as a signal that more district regulation does not make for good schools, an inference with which many principals and teachers are likely to agree. Mabe the finding is not so weird after all.
Of course, we could have the story backwards. It could be the case that the hiring of more non-teacher employees is driven by an increasing commitment to good schools on the part of district leaders. In places where achievement is rising, more employees are put on the payroll. We can’t exclude that possibility, but we think the reasoning is a bit of a stretch.
More concerning is that we see these effects mainly in math. We think that is best explained when one realizes that math, more than reading, is the subject mainly taught at school. Children and early adolescents are reading at home, online, and in many other contexts besides the schoolhouse.
In the duty-to-bargain states, hiring additional employees has no detectable payoff for student achievement. Nor does hiring district office employees have a negative effect on achievement.
In many states, courts have ordered legislatures to distribute additional grants to districts to provide for more equitable and adequate education. These monies can come as a surprise or a “shock” to a district, suddenly providing them with funds they had not anticipated.
Lastra-Anadón and I also look at the impact of school finance reforms on hiring policies. We find that when extra funds suddenly become available, districts use these funds differently depending on whether they are in a duty-to-bargain state.
Districts in a state without a duty-to-bargain law use the unanticipated revenues from the state to hire more teachers. But in states that impose a duty to bargain, districts use the monies for other purposes. Other research says the money is used primarily to boost teacher salaries. Districts in both types of states may be using the money in a sensible way. In duty-to-bargain states, where extra employees don’t have an educational payoff, districts find other uses for the funds. In states without a duty to bargain, they are used to hire more staff, which our results suggest leads to higher math achievement.
The Reason Foundation has released an eye-popping report, but school districts may be using their resources more wisely than a quick glance at the numbers suggests. In states where hiring more employees can lift math achievement, that is the purpose for which states use their extra dollars. In states where there are no achievement benefits from hiring additional staff, the money is used to pay employees more.
Paul E. Peterson is the Henry Lee Shattuck Professor of Government and director of the Program on Education Policy and Governance at Harvard University. He welcomes your reactions to this post by email at paul.peterson@educationnext.org; responses will be curated and shared periodically. His Education Exchange podcast is available with a new episode each Monday.
