The patterns of expenditure on schools tell a fairly simple story. Real spending on schools has been increasing for a long time. The spending has in broad-brush terms been happening in the ways that is commonly advocated: teacher education has been increasing, teacher experience has been increasing, and pupil-teacher ratios have been falling. Yet, at least for the past three decades when student performance has been measured, there is little indication that these increases in resources have led to discernible improvements in student outcomes.

Consideration of other factors that might distort the resource outcome picture does not change the conclusions. Although cost pressures on teachers and special education have had some influence on the resource flows into school, they do not change the overall conclusions.

Beyond the level of resources, concern about their distribution has been an important focus of policy. Coincident with increases in the level of resources has been a shrinking of the variations of spending across districts. A portion of this has driven by court cases about spending equity, although the most important issues are variations in resources across states. With this movement toward spending equity, however, there is no evidence that outcomes have become more equalized.

All this suggests that resources per se are not the issue. And there is little reason to believe that future resource flows will have the desirable impact on student outcomes unless other, more fundamental factors change.

The puzzle of why resources do not systematically affect performance remains. The most consistent explanation is that the current incentives within schools do not push schools to concentrate on student performance. A good teacher can expect roughly the same salary pattern, employment opportunities, and other job outcomes as a poor teacher. The same holds for virtually everybody within schools. Thus, it is not particularly surprising that added resources are not consistently translated into improved student performance. Improving the incentives in schools appears to be the most important task if resources are to be used more effectively in the future.

(Some Conclusions, Spending on Schools by Eric A. Hanushek, A Primer on America's Schools)