Penn GSE's Center for Benefit-Cost Studies of Education releases new policy brief on Pennsylvania's Basic Education Funding proposal

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Philadelphia, PA (June 18, 2024) — The Center for Benefit-Cost Studies of Education (CBCSE) at the University of Pennsylvania Graduate School of Education (Penn GSE) has published a comprehensive analysis of the economic impacts of the Pennsylvania State Basic Education Funding Commission (BEFC) $5.1 billion proposal. The policy brief, titled "The Benefits of Adequacy: Estimating the Economic Impacts of Pennsylvania’s Basic Education Funding Commission Proposal," is authored by Center Director Brooks Bowden and Penn GSE doctoral students David Loeb and Katie Pullom.

“The BEFC proposal has a significant cost, but our analysis shows it would represent a strategic investment that would pay off for the state and its students," said Bowden, an expert in the economics of education. "Students would have better access to teachers and counselors, succeed in higher numbers, and strengthen the state's workforce.”

Upcoming Policy Decision in Pennsylvania

The BEFC has recommended an additional $5.1 billion in K-12 funding across 371 school districts to address inadequate funding levels. This policy brief summarizes the findings from a detailed benefit-cost – or "return on investment" – analysis of the BEFC proposal, focusing on its economic implications for school staffing, student outcomes, and long-term economic benefits for Pennsylvania.

Key Findings: Academic, Societal, and Equity Benefits Far Outweigh Costs

The analysis reveals that the benefits of enhancing school quality outweigh the costs of increased school funding. The proposed investment is expected to lead to significant improvements in student outcomes and long-term economic benefits for the state.

Benefit #1: Improved Student Outcomes

Drawing on existing literature on the causal effects of state K-12 adequacy reforms, the CBCSE predicts notable impacts on high school graduation rates, human capital development among high school graduates, and postsecondary enrollment. The analysis forecasts:

• A 4.47 percentage point increase in high school graduation rates.
• A 4.54 percentage point increase in college enrollment.
• An additional 3,800 high school graduates.
• An additional 3,860 college enrollees.

These projections are based on a conservative approach, assuming the benefits will be realized by approximately one-third of students. The phased approach proposed by the BEFC will gradually increase funding and school quality, with incoming kindergarten cohorts from September 2024 experiencing the full benefits throughout their schooling.

Benefit #2: Increased Earnings & Societal Benefits

The policy brief employs a rigorous benefit-cost analysis model to estimate societal benefits, using Pennsylvania-specific data. Key findings include:

• The societal benefits of increased educational attainment, such as higher earnings for high school graduates, will exceed the costs for every cohort.
• The model accounts for inflation and projected enrollment, showing that increased educational quality provides substantial economic returns over time.

Benefit #3: Improved Parity in School Staffing

The proposal is also expected to address staffing disparities between underfunded and adequately funded districts, with significant short-term economic implications:

• 82% of underfunded districts could achieve parity with adequately funded districts in terms of student-teacher and student-counselor ratios.
• The investment could create more than 18,000 K-12 sector jobs.
• Teacher salaries in underfunded districts could increase by more than $7,000.

Conclusion

The CBCSE's analysis indicates that the BEFC proposal represents a prudent investment in Pennsylvania's future, with substantial benefits for students, the economy, and society. For more details, please refer to the full report and technical appendix available on the CBCSE website.

About Penn GSE's Center for Benefit-Cost Studies of Education: The Center for Benefit-Cost Studies of Education at the University of Pennsylvania Graduate School of Education conducts rigorous research to inform education policy and practice. The Center focuses on analyzing the costs and benefits of education programs and interventions to guide effective decision-making.