(C) Ohio Capital Journal
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Smart money: Study says more money for public schools is good for the Ohio economy [1]
['Marty Schladen', 'More From Author', '- December']
Date: 2023-12-15
Better funding for Ohio public schools won’t just make kids smarter, it will also be a smart investment in the state’s economy, a new economic analysis says.
Putting K-12 spending on a par with neighboring Pennsylvania would produce $23 billion to $90 billion in economic benefits, while cutting down to levels in Indiana would create losses of between $30 billion and $120 billion, the report by Scioto Analysis said.
The analysis, by Michael Hartnett, worked from a separate study published in January by two Northwestern University social scientists. It examined the effects that specific changes in educational spending had on outcomes for students.
Economists have a fancy word for the asset the education helps to develop: human capital. The more skilled and healthy a company’s workforce is, the more productive and profitable the company should be. That productivity and profitability spurs yet more economic activity — and spending on public education is an attempt to develop human capital.
At $13,358 in such spending per student, per year, Ohio ranks 19th in the country. New York is highest at $25,139 a year, while Idaho ranks last, at $7,985.
Ohio recently saw a big boost in K-12 spending, Hartnett’s report notes.
“The state’s biennium budget for fiscal years 2024 and 2025 allocates a total of $12.97 billion for primary and secondary education, representing an 11.4% increase over the previous biennium,” it said. “This marks the largest commitment of state appropriations for education in Ohio’s history, driven by this recent school funding reform package.”
But it’s still well behind Pennsylvania, which is spending $16,864 annually per student.
As Hartnett modeled what would happen in Ohio if funding were increased to that level, he determined that test scores, high school graduation, and college attendance would all increase. Meanwhile, social costs associated with government assistance, incarceration and crime would decrease, the report said.
The opposite would be true if Ohio cut per-student spending to levels like those in Indiana — $10,400 a year.
One beneficial outcome from increased educational spending outweighs the others, Hartnett wrote.
“The largest contributor to benefits and costs is the change based off of college matriculation,” he said. “These results indicate that there would be a large increase in overall economic output with an increase in K-12 school spending in Ohio, and an equally large decrease in economic output if per student spending went the other way.”
One reason why this might be so is because the greater the level of post-high school attainment, the more people can expect to earn over their lifetimes.
“These lifetime earning calculations are based on the estimate that the average associate’s degree holder earns $400,000 more than just a high school graduate, a bachelor’s degree $1,200,000 more, a masters $1,600,000 more, and a doctoral degree $2,400,000 more,” the report said.
Those finishing high school can also expect to earn about $322,000 more during their lives than those who don’t, according to a report from the Federal Reserve Bank of Richmond.
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https://ohiocapitaljournal.com/2023/12/15/smart-money-study-says-more-money-for-public-schools-is-good-for-the-ohio-economy/
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