Return on Investment: The Impact of District Expenditure on Student Achievement in New Jersey K-12 School Districts

Abstract

Research on the effect of money on educational outcomes has historically led to considerable controversy. While some studies imply that expenditures have a meaningful impact on student outcomes, other research has demonstrated the lack of a systemic relationship between expenditure and achievement. Nonetheless, New Jersey has often relied on school funding as a vehicle for influencing student performance. Using 217 K-12 school districts in New Jersey from 2004 to 2014, I analyzed how district-level expenditure has impacted student performance on state assessments. Bolstering the literature critical of the efficacy of school expenditure, I find that expenditure does not have a consistent or significant influence on student achievement in New Jersey. Ultimately, these results imply that money is not the solution to diminishing sociodemographic achievement gaps, and another solution must be developed for augmenting the performance of students throughout the state.