Rand Corp to Pa.: Closing achievement gaps worth big money

If Pennsylvania closed gaps in student achievement, the payoff would be enormous, according to a study released Monday.

Had the Commonwealth wiped out achievement shortfalls based on race and ethnicity, family economic status, and parental education a decade ago, its gross domestic product would be as much as $44 billion higher and its students would sit near the top of U.S. and world rankings, according to the analysis by the RAND Corp.

The study, commissioned by Temple University's Center on Regional Politics, found that each group of Pennsylvania students stands to gain up to $5.1 billion in lifetime income earnings and overall benefit to society if graduation-rate gaps fall away.

"This puts precision on an intuitive feeling," said Joseph P. McLaughlin Jr., director of the center. "We have a potential to really give the economy a boost if we eliminate gaps going forward."

The work comes at a crucial time, with lawmakers in Harrisburg still unsettled on a state budget and an education-funding formula. A bipartisan Basic Education Funding Commission has recommended that the state plow more money into supporting economically challenged students.

The RAND study is believed to be the first of its kind at the state level. It follows a 2009 study by McKinsey & Co. that examined the impact of economic gaps on U.S. schools as a whole.

Pennsylvania performs quite well on such measures as students' test scores and graduation rates when stacked up against other states. But it has among the biggest disparities in performance among different demographic groups.

And it has the nation's widest gulf between spending in rich and poor school districts, according to the National Center for Education Statistics.

"Our best students are doing as well as any U.S. students, and if we could bring the bottom up, the economic payoff is substantial," McLaughlin said.

RAND senior economist Lynn Karoly, the author of the study, concluded that gains in educational achievement would boost the state's economy through higher wages and faster gross domestic product growth. Graduation rate boosts would lower costs to society, such as crime and welfare programs.

The study used state standardized test scores and national and international test results to reach its conclusions.

Funding is not the only solution, the study found.

Though in general, school systems with lower concentrations of economically disadvantaged and minority students outperform those with higher ones, there are some districts with similar demographic profiles that do better than others, and those ought to be studied for best practices, it said.

"It's not just about money," McLaughlin said. "It's how you use that money."

The study stopped short of recommending steps to close the achievement gap, but did note that research supports spending on early childhood initiatives, after-school and summer programs, and dropout-prevention programs.

The RAND analysis was supported by Temple, the William Penn Foundation, and the Greater Philadelphia Chamber of Commerce Regional Foundation.

McLaughlin said the business piece was key.

"We've had panels with employers who are saying, we're not getting from our schools the kind of workers that we're need," said McLaughlin. "We're in a global economy, and we need to step up our game."

Rob Wonderling, CEO of the Greater Philadelphia Chamber, said the report's conclusions were of great importance to the state.

"We feel that, oftentimes, this issue gets caught up in narrow, special-interest politics," Wonderling said. "We've always viewed this as a much broader issue around the notion that a high-quality education system is an economic imperative."