This study uses a large and unique data set of building-level spending, achievement and student demographical information to test whether there is a correlation between how much schools in Michigan spend and how well their students perform on standardized tests and how likely they are to graduate from high school. The results suggest that there is only a very limited correlation between these two factors. Only one out of the 28 academic outputs analyzed showed a result that was positive and statistically significant, or different from zero.

This is not to say, however, that resources never matter in providing a quality educational experience. They certainly do — but probably only up to a certain point. As research has suggested, this may be because Michigan’s public education system is not designed for the most productive use of resources, at least when it comes to improving standardized test scores and graduation rates. A lack of competitive incentives or of meaningful repercussions for poor performance may contribute to this. It could also be that the way resources are distributed and the way spending is prescribed by overlapping local, state and federal governing bodies interferes with individual schools’ ability to use money in the most efficient and effective ways.

Based on these results, it is unlikely that injecting new resources into Michigan’s public school system, all else remaining equal, will make a meaningful difference in improving student achievement.