Disease* Runs Rampant In Missouri Public Schools

Baumol’s disease is running rampant in Missouri public schools. Before you jump in the mini-van and rush to school to pick up your children, let me clarify. Baumol’s disease is an economic term, which describes the tendency of labor-intensive industries to continually have rising costs without achieving similar gains in production, i.e., they spend more, but do not produce more.

Recently, Matt Ladner wrote a series of blog posts about Baumol’s disease in public education. Ladner is certainly not the first to point out this problem. Jay Greene even touched on the topic this week in The Wall Street Journal.

I have seen the numbers nationally, but I wanted to bring it home for Missourians. So I constructed my own graph that demonstrates the Baumol phenomenon in Missouri’s public schools.

The graph was constructed using the Digest of Education Statistics Table 194 and results from the National Assessment of Educational Progress (NAEP). NAEP data are only available after 1992 and the tests are typically taken every other year.  The Digest of Education Statistics data stop in 2008-09. Thus, the graph presents the results from 1992 to 2008. When there were gaps between years, I linearly imported the figures.

Since 1992, Missouri has seen nearly a 40 percent increase in per-pupil spending. Yet we have seen little in terms of increases in academic achievement. This is the very picture of Baumol’s disease: increasing cost with very little improvement in output.

Is there a cure for Baumol’s disease? I think so and I will highlight a few in my next blog post. For now, I will leave you with a thought. If a real disease was running rampant in our schools, there would be immediate action. Yet we have a real economic disease that is plaguing our schools and little is being done. We cannot continue operating an educational system that is plagued with Baumol’s disease.