Strong teacher unions are critical to improving equity in school funding according to a new study published in the academic journal Review of Economics and Statistics. They also play a major role in translating funding increases into increases in student achievement.
The study said that strong teacher unions ensured that school finance reforms in the US “were effective in reducing inequality across school districts in education resources and student achievement” [p. 5]. It concluded:
We find large and important impacts of unions on the size and allocation of school district budgets and on student outcomes [p. 5].
School finance reforms (SFRs) across the US between 1990 and 2010 resulted in changes to school funding formulas in many states. The goal was to increase state government funding for schools in high-poverty school districts to supplement local government funding. In the US, local government property taxes are the major source of funding for school districts but reliance on property taxes resulted in large funding disparities between wealthy and poor school districts.
A key issue for the outcome of the reforms was whether the state funding increased overall school funding or whether local school districts responded to the increases in state funding by reducing local taxes. Some districts receiving more money from the state used it to replace some of their own spending.
The study found that strong teacher unions played a critical role in determining both the amount of state funding that translated into education expenditures and the allocation of these funds. School districts in states with the strongest teachers’ unions increased education expenditures nearly one-for-one with increases in state funding, whereas states with the weakest unions increased expenditure by less than 25 cents in the dollar because they reduced their local tax effort.
Districts in strong teachers’ union states allocated more of the additional spending toward increasing teacher salaries, while districts in weak union states spent the money primarily on teacher hiring. Spending on capital outlays, curriculum and administrative and classroom support also increased more in strong teachers’ union states than in states with weak teachers’ unions.
The study also found that the increase in expenditure under the finance reforms translated into increases student achievement. The increases in student achievement were larger in the states with strong teachers’ unions: “the larger expenditure increases in strong teachers’ union states in response to SFRs translated into larger student achievement gains” [p. 29]. It said that the increased expenditure on education inputs was an “important mechanism behind the larger achievement gains” and that this finding is “consistent with the recent literature finding that money matters in education” [p. 30].
A number of recent studies have found that funding increases arising from school finance reforms sustained improvements in student achievement, and long-run increases in educational attainment, earnings, and intergenerational mobility. The new study provides an important perspective on these results in showing the contribution of teacher unions in ensuring their success. Without strong teacher unions the increase in state funding may have otherwise led to reductions in property taxes rather than increases in expenditure on schools.
….in the absence of teachers’ unions, the reforms would have had little impact on school resources or student achievement, leading instead to large increases in property tax relief. [p. 4]