The Relationship Between Resource Allocation and Pupil Attainment: A Review

The Centre for the Economics of Education is an independent research centre funded by the Department of Education and Employment. The view expressed in this work are those of the authors and do not necessarily reflect the views of the Department of Education and Employment. All errors and omissions remain the authors. 1. This report examines the impact of measurable resource inputs on primary and secondary school students' achievement. The objectives of this report are to summarise the findings from the educational production function literature, to identify the many methodological difficulties in this field, and to provide an outline for a high quality research project. 2. Section 1 concentrates on the methodological techniques most commonly used in the field – regression analysis 1 and stochastic frontier/data envelopment analysis-evaluating each technique and commenting on the advantages and disadvantages associated with each method. 3. Section 2 reviews a 'high quality' subset of the recent (post-Hanushek, 1997) international educational production function literature. This section has two aims. First and foremost, and in keeping with the methodological focus of the report, to evaluate how effectively the methodological issues have been addressed in the predominantly US centred literature. Second, to report the empirical results from this literature. 4. In Section 2 it is established that recent international research, in contrast to the widely held view that inputs have no systematic impact on student outcomes, has generally been able to establish a link between certain education inputs (particularly expenditure and teacher characteristics) and enhanced student outcomes. 5. Sections 3 and 4 present a r eview of the UK literature. Reflecting our interest in UK policy, and the limited amount of high quality research in the UK, the criteria for inclusion in this section are weaker than for Section 2 and consequently the review is more broad ranging. The review of the UK research is divided into two parts. The first (Section 3), reviews the production function based literature, while the second (Section 4) examines studies of cost effectiveness of school provision. 6. The UK literature review shows that, while the link between educational expenditure and outcomes is not proven, some real resources seem to have an impact on outcomes. For example, several studies found a correctly signed and statistically significant relationship between the school level pupil teacher ratio and outcomes. However, there is almost no UK evidence that smaller class size leads to better outcomes. In …

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