middle-class societies invest more in public education

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Middle-Class SocietiesInvest More in Public Education

A Stronger Middle Class Is Associatedwith Higher Levels of Spending on Education

David Madland and Nick Bunker November 2011

www.americanprogressaction.o


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Middle-Class SocietiesInvest More in Public EducationA Stronger Middle Class Is Associated

with Higher Levels of Spending on Education

David Madland and Nick Bunker November 2011


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1 Introduction and summary

5 The middle class and public investments

6 A stronger democracy

11 Demand for education and willingness to pay for it

15 Demonstrating that a stronger middle classleads to higher education spending

17 Conclusion

18 Appendix

22 About the authors

23 Endnotes

Contents


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1 ct am pg at Fu | M-c st ivt M pub eut

Introduction and summary

Americas economic uure depends in large par on he qualiy o our naions

public educaion. Educaion increases produciviy, sparks innovaion, and booss

our economic compeiiveness. In a globally compeiive environmen, we can

aord o have a poorly educaed workorce.

o boas a world-class public educaion sysem requires invesmens.1 Alas, we

have no invesed as much as needed o say ahead o our inernaional compei-

ors, and he resuls are clear: Fieen counries now have higher college gradua-ion raes han us, and our average es scores are lower han hose o no jus peer

counries bu also less wealhy places such as Slovenia and Poland.2

No surprisingly, he American public hinks we should be making greaer inves-

mens in educaion, wih polls showing srong and growing suppor or increased

spending. Seveny-wo percen o Americans suppor spending more on educa-

ion oday, up rom 65 percen in 1985.3 So why have we no been making he

invesmens in educaion ha he public desires and he economy demands?

Tere are o course many reasons bu a key, hough oen overlooked, piece o

he explanaion is he decline o he American middle class. Socieies wih a

srong middle class make greaer invesmens in public goods such as educaion,

which helps uel heir uure economic success. Because paying or privae school

imposes a much greaer, and someimes impossible, hardship on middle-class

amilies han i does on he wealhy, middle-class amilies have a srong incenive

o make public schools work. Te middle class invess is ime and energy in pub-

lic schools and suppors higher levels o spending on educaionand especially

he axes necessary o pay or ihan do he rich.

Moreover, people in srong middle-class socieies eel hey share a similar ae and

hus are more willing o make invesmens ha hey may no direcly bene rom,

such as, or example, in educaion when hey do no have school-age children.4


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Over he pas several decades, however, America became less o a middle-class

sociey as he wealhy capured mos o he economys gains. Te op 1 percens

share o income rose o 23.5 percen in 2007, he las year beore he beginning

o he Grea Recession, up rom 9.12 percen in 1974, while over his same ime

period, he share o income going o he middle class (dened as he middle 60

percen o he populaion) ell rom 52.2 percen o jus 46.9 percen. Te share oincome going o he botom 20 percen over his period sayed around 3 percen,

declining by less han 1 percenage poin.5

As he rich pull away rom he middle class, he relaive poliical power o he

wealhy signicanly increases compared o he middle class. Tis dramaic change

in power disors our poliical sysem, leading o no as much invesmen in he

public goods needed o mainain a healhy middle class, including a grea pub-

lic educaion sysem. Te rich are able no only o purchase ever more poliical

inuence bu also boos heir poliical power relaive o he middle class, which

now eels less inuenial and hus voes less oen and ges involved in poliicsless requenly.6 As a resul, he views o he American middle class now hold less

poliical weigh han hey used o.

Because o he decline o he middle class, educaion spending is lower han i

would be oherwise. Indeed, our decades ago he Unied Saes ranked second

among high-income counries in educaion spending as a share o GDPhe

broades measure o a counrys income levelwih only Canada ouspending

us, according o he World Bank.7 In 2008, he mos recen year daa are avail-

able, we ranked 11hand Canada, whose middle class has also shrunk signi-

canly, dropped o 16h, as counries wih sronger middle classes like Sweden

and New Zealand edged ahead.

In saes across he counry, a similar dynamic has played ou as well. Since he

Grea Recession began, mos saes have cu educaion spending, ye in hose

saes wih a sronger middle class, educaion spending has no been cu by nearly

as much on average.8 Moreover, o he ve saes ha cu educaion spending

he mos, he middle class in our is weaker han he naional average. And o he

ve saes ha increased educaion spending he mos, our had sronger middle

classes han he average.

o esh ou hese observaions and help quaniy he imporance o a srong

middle class o making invesmens in educaion, we examined in deail educa-

ional spending in all 50 saes over he pas wo decadeshe enire period or

As the rich pull

away rom the

middle class,

the relative

political power

o the wealthy

signifcantly

increases

compared to th

middle class.


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which complee daa are available. We nd ha a weaker middle class is associaed

wih signicanly lower levels o educaion spending, conrolling or oher ac-

ors ha aec educaion spending such as sae income levels, he percenage o

minoriies in a sae, and he age disribuion o he sae. Specically, we nd ha

a 1 percenage poin increase in he share o income received by he middle class is

associaed wih an increase o $64 per-pupil spending on public school kindergar-en-hrough-12h-grade educaion.

Our sudy suggess ha i he middle class received he same share o income as i

did in lae 1960sapproximaely 7 percenage poins morehen spending per

pupil on educaion would be abou $447 higher oday. In a sae such as Louisiana,

he median sae in erms o suden populaion, ha would have ranslaed ino

$308,839,005 more in educaion spending during he 2009-10 school year.

Imporanly, increased educaion spending ends o lead o greaer levels o

achievemen.9 Many o he acors ha boos educaional perormance requireresources. Hiring and reaining good eachers and principals akes money, as do

supplies, enrichmen programs, small class sizes, and high-qualiy aciliies.

o be sure, here is room o improve he eciency o our curren levels o educa-

ion spending.10 Bu srong middle-class socieies also end o spend governmen

money more ecienly han unequal socieies, wih less wase, raud, and abuse,

suggesing ha he increased educaional spending would be likely pu o good

use. Case in poin: Researchers commonly nd ha in more equal socieies, cor-

rupion is less prevalen and educaional resources are allocaed more equiably,

ensuring mos sudens have sucien resources, no jus he privileged.11

Addiionally, a srong middle class booss educaional atainmen hrough ar

more han jus increased spending.12 Te ways in which a srong middle class leads

o beter educaional oucomes, such as middle-class parens puting pressure on

adminisraors o re or ranser bad eachers, are described more compleely in

our companion repor, Te Middle Class Is Key o a Beter-Educaed Naion.

Skepics may argue ha over he pas several decades as he middle class declined,

spending on educaion generally increased. Bu we spend more on educaionnow because we are a much richer sociey. Per capia GDP nearly doubled over

he pas our decades, adjusing or inaion, increasing rom $26,669 in 1967 o

$46,804 by 2008, providing much greaer resources or spending on a range o

goods, including educaion. Research consisenly nds ha as he income level o
http://www.americanprogressaction.org/issues/2011/11/middleclass__outcomes.htmlhttp://www.americanprogressaction.org/issues/2011/11/middleclass__outcomes.html


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a sociey increases, i spends more on educaion.13

Skepics migh also noe ha all Americans, including he wealhy, generally sup-

por increased educaional spending. Tey would be correc.14 Bu he middle

class expresses higher levels o suppor or spending on educaion han do he

wealhy, suggesing ha spending on educaion would be even greaer i hemiddle class had more poliical power.

As a resul, neiher o hese poins reues he basic argumen o his paper, which

is ha spending on educaion is higher when he middle class is sronger.

In he pages ha ollow, we explore oher sudies done on he relaion beween a

srong middle class and suppor or a variey o public invesmens ha bene he

overall srengh and well-being o sociey. We hen examine how a srong middle

class resuls in a srong democracy, and consequenly in a procliviy or hose

socieies o inves in imporan public programs such as public educaion. Ourpaper hen urns o he opic a handhe demand or a qualiy public educaion

sysem and he willingness o pay or ibeore presening our seminal sae-by-

sae analysis o he correlaion beween a srong middle class and spending on

public educaion per pupil.

In shor, his paper argues ha a sronger middle class is likely o be good or our

naions educaional sysem. And improving educaion in he Unied Saes would

be good or our economy.


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The middle class

and public investments

A growing body o research nds ha socieies wih a srong middle class make

greaer invesmens in public goods ha help spur economic growh such as educa-

ion and inrasrucure.15 New York Universiy economis William Easerly invesi-

gaed he relaionship beween income disribuion and public invesmen in a paper

eniled Te Middle Class Consensus.16 Easerly nds ha a sronger middle class,

dened as he share o income going o he middle 60 percen o he populaion, is

correlaed wih high levels o inrasrucure and human capial invesmen.

Oher empirical sudies nd similar resuls. One sudy by orsen Persson and

Guido abellini, economiss a he Insiue or Inernaional Economics Sudiesand Bocconi Universiy, nds ha he share o income going o households or

amilies in he middle 20 percen o a sociey is posiively correlaed wih inves-

men in advanced democracies.17 And Princeon Universiy poliical economis

Jonas Ponusson argues ha equaliy promoes invesmens in educaion.18 Oher

economiss also make he case or a link beween income disribuion, public

invesmen, and economic growh.19 Nobel Prize-winning economis Joseph

Sigliz, or example, raises concerns ha increased inequaliy can reduce he abil-

iy o a counry o ake collecive acion o improve public goods generally.20

Our sudy expands upon his research in several ways. Firs, we empirically demon-

srae or he rs ime he relaionship beween he srengh o he middle class and

educaion spending in U.S. saes. Tis is seminal research. Previous research con-

necing he middle class and higher levels o educaional spending never examined

his correlaion beween srong middle classes and sae spending on educaion.

Second, and perhaps mos imporanly, we develop a rich explanaion or how

a srong middle class leads o higher levels o educaion spending in he Unied

Saes, somehing previous research has no done. Tus, his paper provides he

heory and empirical research or a specic example (educaion spending in U.S.saes) o he more general case ha more middle-class socieies make greaer

invesmens in growh-oriened public goods.


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A stronger democracy

A srong middle class osers beter governance by helping ensure governmen

is well run, increasing ciizen paricipaion, minimizing acional ghing, andpromoing policies or he bene o all o sociey raher han special ineress.

In shor, as scholars o governmen have long observed, when he middle class

is srong, you are more likely o ge good governance. More han 2,000 years

ago, Arisole argued, Te bes poliical communiy is ormed by ciizens o he

middle class. He explained ha hose saes are likely o be well-adminisered, in

which he middle class is large, and sronger i possible han boh he oher classes,

or a any rae han eiher singly; or he addiion o he middle class urns he scale,

and prevens eiher o he exremes rom being dominan.21

Indeed, he middle class boass a srong ineres in promoing oresighed poli-cies and making governmen work well because he economic opporuniies hese

amilies srive or are more closely ied o he qualiy o governmen han ha o he

wealhy. Te middle class depends more on public services han do he wealhy.22

High-income individuals can more easily op ou o public services because hey can

readily use privae services unavailable o individuals wih average income. Lower-

qualiy public schools, or example, are no as much o a concern or he wealhy

because hey can more easily aord o send heir children o privae schools.

Even qualiy roads and bridges are less o an issue or he wealhy when hey can

ake helicopers and privae planes. Te wealhy can also more easily op ou o

a counrys regulaions over specic aspecs o heir lie, or insance by making

invesmens and banking abroad, or even moving o anoher counry.23 In conras,

he middle class is more likely o be orced o make he sysem generally work.

When he middle class is srong, i has he poliical power o achieve heir goals.

Conversely, economic inequaliy and a weak middle class make he poliical

sysem imbalanced by giving elies ever more power, which depresses he poliical

paricipaion o he nonwealhy; reduces voing, discussion, and ineres in public

policy; and creaes a governmen ha ocuses on special ineress raher han hecommon good.24 James Madison expressed his ype o concern when he wroe in

1787 ha he mos common and durable source o acions has been he various

and unequal disribuion o propery.25 In Madisons view, racious conic led o

bad governmen ha ailed o pursue he public ineres.


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A long line o modern American poliical science research nds, no surpris-

ingly, ha he wealhy are more likely o ge wha hey wan in poliics han he

middle and lower classes, and ha he disproporionae inuence o he wealhy

causes governmen and poliics o operae dierenly han i would i he middle

class had more power.26

oday our naion is increasingly unequal in wealh, wih he rich receiving he

lions share o he economys gains. Te increase in relaive power or he rich and

decline in relaive power or he middle class resuls in serious poliical problems

in America oday, wih hese poliical dierences becoming so lopsided ha he

middle class is ar less inuenial han i used o be.

Some o he poliical success o he rich occurs because o heir abiliy o buy poliical

access and inuence. Te wealhy have always been able o purchase poliical inu-

ence, bu as heir incomes pulled away rom he middle class over he pas several

decades, heir poliical conribuions overwhelmed hose rom he middle class.27

In addiion, corporae- and rade-associaion spending on lobbying and dona-

ions o poliical acion commitees grew rapidly over he pas ew decades, oally

overwhelming any organized conribuions by middle-class organizaions.28 Tis

spending gives corporaions and high-income individuals access o and inuence

wih policymakers ha middle-class Americans lack.

Bu is no jus ha he rich are increasingly able o buy poliical inuence

wih campaign conribuions and lobbyiss. Te excessive poliical power o

he wealhy caused by he lions share o he economys gains going o he rich

insead o he middle class resuls in a spiraling eec on poliics. As he rich

became more powerul, ordinary ciizens el less powerul, causing hem o

wihdraw rom poliics, which gives he wealhy even more power. Sudies

consisenly nd ha a weak middle class and high levels o economic inequaliy

prooundly reduce voing, discussion, ineres, and oher measures o poliical

paricipaion or all bu he mos wealhy.

In a sudy o advanced democracies, or example, Universiy o Souhern Illinois

poliical scienis Frederick Sol nds ha a rise in inequaliy rom low o high lev-els reduces poliical discussion by 12 percenage poins and voing by 13 percen-

age poins. 29 Universiy o Minnesoa poliical scieniss Joe Soss and Lawrence

Jacobs nd ha as inequaliy has increased in he Unied Saes, voing ell sharply

among middle- and lower-income ciizens.30 A sudy by Universiy o exas econ-

Today our natio

is increasingly

unequal in wea

with the rich

receiving the

lions share o th

economys gain


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omiss James K. Galbraih and ravis Hale nds ha higher economic inequaliy

in a sae is associaed wih lower voer urnou.31 And in a sudy o communi-

ies in he Unied Saes, Louisiana Sae Universiy poliical scieniss James C.

Garand and Kim Nguyennd ha ciizens, in general, who live in communiieswih lower levels o income inequaliy are likely o urn ou o voe, while a higher

levels o income inequaliy urnou ends o be lower in general and especially orunderprivileged ciizens, relaive o high-income ciizens.32

Since even in relaively equal socieies he nonwealhy are less likely o paricipae

in poliics han hose wih greaer economic resources, inequaliy srongly inu-

ences who is poliically engaged.33 Compounding his dynamic is ha Americans

signicanly increased heir hours o work over he las several decadesin large

par by women moving ino he paid workorceas wages sagnaed or he

middle class. Tis overload o work reduces he ime and energy Americans have

o ge poliically involved.34

Members o he middle class are aware ha hey are less relevan poliically. oday

nearly hal o all middle-class Americans hink ha people don have a say in

wha he governmen does, while several decades ago only a quarer o he middle

class el so powerless, according o our analysis o he Naional Elecion Survey,

a long-running naionwide academic survey.35 Te General Social Survey, also a

large, long-running naionwide academic survey, shows similar rends.36

Middle-class Americans are also less likely o join volunary associaions han hey

were earlier in our hisory. Work by Harvard poliical scieniss Rober Punam

and Teda Skocpol show how Americans, once lauded by Alexis de ocqueville as

a naion o joiners, are no longer becoming members o groups such as he Elks,

he Knighs o Columbus, or Paren eacher Associaions.37 Tese kinds o organi-

zaions are key o ranslaing he desires o he middle class ino poliical pressure

ha moivaes eleced ocials.38

PAs in paricular help parens engage heir individual schools. Sae and local

PAs play an imporan role in lobbying governmen on behal o parens and

hose ineresed in he welare o children. Tey help keep members inormed o

issues, aler hem o opporune imes o ake acion, and combine he voices andacions o members so ha hey are el by poliicians.

Punams research shows a decline in PA membership across he counrya

decline ha coincided wih he decline in srengh o he middle classand he


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laer noed ha membership in independen Paren eacher Organizaions has

no replaced he decline in PA membership.39 POs are independen organiza-

ions ha generally operae wihin one school, whereas PAs no only operae

a he school level bu also orm regional groups and a naional organizaion

o lobby or he ineress o sudens. Wihou a srong, organized voice in he

educaion debae, he voices o middle-class Americans are no being heard asloudly as hey once were.

Indeed, a hos o recen sudies nd ha in he increasingly unequal Unied Saes,

he views o he rich overwhelmingly prevail.40 While hese sudies have no

ocused on educaion policy, heir ndings are relevan. Firs, hey clearly indicae

ha when he rich have dieren views han he res o he public, he wealhy

almos always ge wha hey wan.

Second, hey provide conex or undersanding how spending on educaion

could be less han i would be i he middle class were sronger. Te preerenceso he middle class or even more educaional spending ake a back sea o he

preerences o he wealhy, who also suppor spending on educaion bu jus no

as much. Ta he middle class would no ge he level o spending hey wan is

especially likely because, as discussed above, when he middle class loses poliical

power o he wealhy, i can have a spiraling eec, where poliical losses on one

issue cause less ineres and suppor or oher issues.41

A paricularly revealing sudy o he U.S. Senae by Princeon Universiy polii-

cal scienis Larry Barels compared senaors oor voes wih he views o he

consiuens on a broad range o issues, including governmen spending, he

minimum wage, civil righs, and aborion, hough no educaion policy.42 Barels

ound ha senaors voes are vasly more responsive o he views o heir afuen

consiuens han o hose o he middle class, and were compleely disconneced

rom he views o heir poorer consiuens. In almos every insance, senaors

appear o be considerably more responsive o he opinions o afuen consiuens

han o he opinions o middle-class consiuens, while he opinions o consiu-

ens in he botom hird o he income disribuion have no apparen saisical

eec on heir senaors roll call voes, he concluded.

Similarly, Marin Gilens, also a Princeon poliical scienis, sudied 2,000 survey

quesions on a range o proposed policy changes, including on axes, governmen

spending, and social issues, and compared he publics preerences wih wheher

governmen policy acually changed.43 Gilens ound ha when Americans wih

Without a stron

organized voice

in the educatio

debate, the voic

o middle-class

Americans are

not being heard

as loudly as the

once were.


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dieren income levels dier in heir policy preerences, acual policy oucomes

srongly reec he preerences o he mos afuen, bu bear litle relaionship o

he preerences o poor or middle income Americans.

Anoher mechanism ha is likely a work is ha he weakening o he American

middle class also may be changing he way Americans hink abou invesing inpublic goods. Exreme economic inequaliy breeds a selsh orienaion oward

public policy. In conras, people in socieies wih a srong middle class believe hey

share a common ae and are hus more willing o inves in one anoher. A range

o sudies nd ha economic inequaliy reduces rus beween srangers, and ha

reduced rus resuls in lower levels o spending on many public programs, especially

programs ha bene oher people.44 As Eric M. Uslaner, a poliical scienis a he

Universiy o Maryland, argues, economic equaliy is a srong deerminan o rus.

And rus leads o policies ha creae wealh and reduce inequaliies.45

Similarly, sudies in experimenal economicsa new eld ha explores heway people behave based on deailed analysis o behaviors in experimenal se-

ingsshow ha inequaliy reduces he willingness o individuals o conribue

o a public good. A undamenal sense o airness drives people o wonder why

hey should conribue o a public good when hey have no seen gains and he

wealhy reciprocae by no conribuing. In hese sudies, he rich are araid hey

will be exploied by he poor, and he res o he subjecs don hink he rich will

conribue enough. Te lack o rus among he subjecs in hese sudies resuls in

underinvesmen.46 In he nex secion o our repor, we will explore his phenom-

enon a work in public educaion.


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Demand for education

and willingness to pay for it

Tough he Grea Recession orced some cus in U.S. educaion spending, over

recen decades combined ederal, sae, and local educaion spending increased

signicanly.47 Ye our public schools would bene enormously rom higher levels

o spending. Many school buildings need signican and cosly repairs, and reduc-

ing class size, improving eacher qualiy, and providing enrichmen aciviies also

cos money.48 No surprisingly, sudies consisenly nd ha increased spending is

associaed wih higher levels o educaional achievemen.49

Few would deny he benes o a highly educaed, highly skilled workorce. Boh

common sense and a deep body o research lead us o he inescapable conclusionha a qualiy educaion sysem yields enormous dividends while weaknesses in

our sysem resul in enormous losses. One recen repor ound ha i schools in

saes wih lower-han-average perormance were brough up jus o he naional

average, he economy would enjoy a $700 billion boos.50

Sadly, we know ha Americas school sysem is alling behind. Tere are any num-

ber o saisics one could cie o show how dramaic he needs are. Suce i o

say ha one esimae pu he economic cos o he gap beween U.S. educaional

achievemen and inernaional achievemen a anywhere beween $1.3 rillion and

$2.3 rillion a year.51 Wihou a qualiy educaion sysem, he Unied Saes canno

hope o compee in he 21s cenury, especially since oher counries are ramping

up heir public invesmens and gaining on he Unied Saes in educaion, scien-

ic progress, echnology, and oher criical areas.52

Given all his, i makes sense ha he American public srongly suppors greaer

spending on educaion. In 1985 65.1 percen o Americans suppored an increase

in educaion spending. Ta suppor increased o 72.1 percen by 2010.53 All evi-

dence indicaes ha he middle class is more supporive o increased spending on

educaion han he wealhy. o be clear, he wealhy do by many measures supporpublic spending on educaion; hey jus don suppor iand especially he axes

necessary o pay or ias much as he middle class. For he wealhy, increasing

educaion spending is less imporan han i is or he middle class. As a resul,


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spending on educaion has increased over recen decades, bu no as much as i

would have i he middle class were sronger.

Tis general endency o especially srong middle-class suppor or educaion can be

illusraed wih a quesion rom he General Social Survey, which asks abou suppor

or increased educaional spending. In 1985, he rs year he quesion was asked,66.4 percen o middle-class respondens suppored increasing spending com-

pared o only 59.5 percen o op earners.54 Over he years, as suppor or increased

educaion spending rose overall, he dierence beween he middle class and op

earners remained he same. In 2006, he mos recen year his exac quesion was

asked, 83.7 percen o middle-class respondens were in avor o increased educaion

spending whereas 76.9 percen o op earners answered he same way. And criically,

he wealhy also have a greaer aversion o he axes necessary o pay or increased

spending. Tis is rue specically on educaion. On he GSS quesion discussed

above, an answer o much more spending was linked o he possibiliy o requiring

ax increases, somehing 41.6 percen o he middle class suppored bu only 33.3percen o op earners waned.55

Bu even more imporanly, i is rue abou general levels o axaion: Te wealhy

preer lower levels han he middle class. I he wealhy are able o secure heir

preerred level o axaion, which sudies sugges ha hey are, hen here is less

revenue available o spend on he publics prioriies such as educaion.

Poliical science research consisenly nds ha higher-income individuals,

because o heir sel-ineres, end o be less supporive o governmen spend-

ing and more opposed o axes.56 Indeed, generally he more wealh people have,

he greaer aversion hey have o paying axes on ha wealh, wih some obvious

excepions like Warren Buet. Te more money people have, he less need hey

have or governmen programs because hey can purchase alernaives, such as

paying or heir children o atend privae schools. In addiion, because o pro-

gressive axaion, people wih higher incomes end o pay proporionaely more

money in axes and hus are paricularly concerned abou axes.

While here are dierences in opinion beween middle- and upper-income indi-

viduals, dierences beween he super rich and he middle class are mos polii-cally relevan. Te super rich (he op 5 percen and especially he op 1 percen

and op 0.1 percen) pulled away economically rom he middle class in recen

decades and hus garnered signicanly more poliical power while he income

Political science

research fnds th

higher-income

individuals,

because o their

sel-interest,

tend to be less

supportive o

government

spending and m

opposed to taxe


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dispariy beween he modesly wealhy (he op 10 or 20 percen) and he middle

class has no changed as much over his ime period.

All signs srongly sugges ha as incomes rise o exremely high levels, sel-ineresed

opposiion o governmen spending and axes increases, bu i is dicul o ease

ou he precise poliical views o he super rich. Mos polls almos never ask incomequesions ha allow you o ease ou who is in he op 0.1 percen, 1 percen, or 5

percen o income earners. And hose polls ha do allow or such diereniaion

rarely have a large enough sample o he ulra-wealhy or any subsanive analysis.

Even capuring he views o he op 10 percen is no commonly done.

Sill, wo imporan academic sudies ha broadly invesigae he poliical

atiudes o he very wealhy argue ha hey are much less supporive o govern-

men spending in general, and much more opposed o paying axes o suppor

governmen programs.

Research by Norhwesern Universiys Benjamin Page, a dean o public opinion

research, and his colleague Cari Lynn Hennessy combines several years o GSS

surveys ha include very high op-end income quesions o invesigae he views

o he op 4 percen o Americans by income. Tey nd economic elies o be

much more opposed o axes han he middle class. While he auhors did no

analyze quesions abou educaional spending, hey did nd ha he op 4 percen

were less likely o express concern abou economic inequaliy and less likely o

avor governmen policy o reduce inequaliy such as more progressive axaion.57

Page and Hennesseys daa are somewha daed, so he economic elies views

could possibly have changed, hough analysis o he views o he wealhy (ha

don separae ou he super rich) indicaes ha hey have become even less

supporive o governmen spending and axes over ime, while he views o he

middle class have no changed.58

Moreover, a more recen sudy by Princeon Universiy poliical scienis Marin

Gilens looks a how he preerences o he wealhies 10 percen o Americans

dier rom hose wih incomes in he exac middle o he U.S. income range on a

wide array o policies. On economic policy issues, Gilens nds ha he views ohe rich and he middle class diverge in raional and predicable ways, wih he

wealhy much less supporive o axes and governmen spending. According o

Gilenss research, he policy preerences o hose in he op 10 percen o income


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earners are wice as likely o become he acual policy o he governmen as hose

earning incomes in he exac middle o he income range.59

As a resul, he axes, which are necessary o pay or increases in educaion

spending, are likely o reec he views o he wealhy and hus be lower han

he ideal poin or he middle class and hus provide insucien revenue or helevel o increased spending on educaion ha he middle class desires. In sum,

he middle class preers higher levels o educaion spending han he wealhy

and is more wil ling o pay or he spending increases wih higher axes i neces-

sary. Te more poliical power he middle class has, he more likely heir v iews

will be implemened ino policy. So when he middle class has more power,

spending on educaion will be higher.


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Demonstrating that a stronger

middle class leads to higher

education spendingTe preceding secions deailed he heoreical channels ha connec a srong

middle class and educaion spending. However convincing hose argumens migh

be, he case canno be ully made wihou empirical proo.

Using regression analysis, we invesigae he relaionship beween he srengh

o he middle class and educaion spending in all 50 saes rom 1989, he rs

year or which spending daa were available, o 2008, he mos recen year or

which all daa are available.

o examine he relaionship beween he middle class and educaional spending,

we analyze sae, per-pupil elemenary and secondary educaion spending. We

conrol or a range o variables ha have been ound o aec educaion spending

levels, including sae GDP per capiahe commonly used measure o a saes

income leveland he age and racial disribuion o he sae and he size o he

sae economy.60 Addiional deails on our analysis are available in he appendix.

We nd a srong and saisically signican relaionship beween he srengh o

he middle class and he amoun o educaion spending per suden. Our resuls

are similar even when using alernaive measures o educaion spending, such as

spending as a share o sae GDP, and when using dieren economeric ech-

niques. Tis indicaes ha our resuls are quie robus.

We nd a srong and signican relaionship beween he srengh o he middle

class and he amoun o educaional spending per pupil. Te relaionship is sais-

ically signican a well beyond he 1 percen level, meaning hese resuls are very

unlikely o occur by chance.

Our sudy suggess ha i he middle class received he same share o income

as i did in he lae 1960s, approximaely 7 percenage poins more, hen per

pupil spending on educaion would be abou $447 higher oday. In a sae like


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Louisiana, he median sae in erms o suden populaion, ha would have rans-

laed ino $308,839,005 more in educaion spending in he 2009-10 school year.

Tese ndings are consisen wih previous research on he relaionship beween

income disribuion and public invesmens oher han educaion spending, or

which here are no sudies unil his seminal repor.61

Moreover, we also nd, as expeced, ha our conrol variableshe age disri-

buion and racial composiion o sae populaions, he oal sae populaion,

and sae income levelssignicanly aec spending levels.62 Tese resuls are

consisen wih sudies on he deerminans o educaion spending, which gen-

erally has no considered he srengh o he middle class, providing addiional

suppor or our resuls.


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Conclusion

A srong middle class helps increase invesmen in educaion by giving a sronger

voice o he majoriy o Americans who wan a srong public educaion sysem.Wih educaion more imporan han ever o Americans and our counry, we need

o make sure ha our counry is living up o is poenial by ensuring a robus

educaional sysem. By creaing a producive workorce, a srong middle class

helps creae economic growh. In order o make he invesmens necessary o

srenghen our economy, we need o rebuild our middle class.


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Appendix

Data

We use elemenary and secondary educaion spending per suden as ourdependen variable.63 Te educaion spending daa rom he Naional Cener on

Educaion Saisics cover all 50 saes rom 1989 o 2008. Tese daa include

capial invesmens bu we ge very similar resuls when we use curren expendi-

ures. Te gures were originally in curren year dollars bu we deaed hem ino

consan 2009 dollars. We also ran our models using educaion spending as a share

o sae GDP as he dependen variable and ound broadly similar resuls.

Our independen variable o ineres, he srengh o he middle class, is he share

o sae income going o he second, hird, and ourh quiniles o he disribu-

ion. Tese daa are rom he Curren Populaion Survey and he AmericanCommuniy Survey a he Census Bureau. Noe ha using a similar deniion o

he middle classhe share o income going o he middle 20 percenproduced

very similar resuls. Tese deniions o middle class are similar because hey are

boh aeced similarly by he rise in income share going o he op.

Te age and racial proles o saes have been ound o aec levels o educa-

ion spending, and hus we include conrols or hese acors. Saes wih a large

amoun o school-age children may have more educaion spending as heir parens

voe in heir childrens ineres. Older ciizens may resis higher educaion spend-

ing as i does no direcly bene hem bu resuls in higher levels o axaion.

Some previous research ound ha spending is lower in saes wih a larger share

o hose over age 60.64 Oher research ound ha suppor or he public educa-

ional sysem does no decrease as a person ages.65 As a resul, we do no have a

clear expecaion or he oldes age groups, hough i seems likely ha age groups

wih school-age children would be more likely o suppor educaion spending.

Age conrols were calculaed using populaion esimae gures rom he Census

Bureau. We creae several age groups and calculae wha percen o he populaion

alls in each age range. Te groups are hose beween he ages o 5 and 18, 19 and29, 30 and 39, 40 and 49, 50 and 59, and hose 60 years o age and older.

We conrol or he racial composiion o each sae by including he share o he

populaion ha is nonwhie. Sudies on educaional spending show ha areas wih

higher shares o minoriy residens spend less on educaion.66


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Wealhier populaions have more o spend on educaion and hus we conrol

or sae income levels, hough some previous research on U.S. sae educaion

spending ignores his variable.67 Similarly, he overall populaion level o a sae

may aec educaion spending as saes wih a smaller populaion may eel a

greaer commonaliy wih one anoher and be likely o spend more on educa-

ion, so we include a conrol or oal populaion.68

Te real sae GDP guresare rom he Bureau o Economic Analysis and he sae populaions gures are

rom he U.S. Census Bureau.

Because sae spending decisions are ypically made or uure years, we lag he

independen variables by one year. We ran regression wih conemporaneous

independen variables and ound very similar resuls.

Models

We use hree dieren regression models: panel correced sandard errors, or

PCSE; sae- and year-xed eecs; and a pooled ordinary leas squares, or OLS,

regression. Bu our preerred choice is o use PCSE. We believe PCSE is he bes

choice because he share o income going o he middle class, he independen

variable o ineres, is relaively slow moving over ime.

PCSE was rs described by Nahaniel Beck, a poliical scienis a New York

Universiy, and Jonahan Kaz, a proessor o social sciences and saisics a he

Caliornia Insiue or echnology, and has since become common in he sudy o

poliical economy.69 PCSE is a mehod o improve he accuracy o esimaes when

using ime-series cross-secional daa. ime-series cross-secional daa are charac-

erized by repeaed observaions (oen annual) on he same xed poliical unis

(usually saes or counries), and hus he daa are oen correlaed over ime.

As Nahaniel Beck and Jonahan Kaz argue, he inclusion o xed eecs almos

always masks he impac o slowly changing independen variables.70 Tey argue

ha using xed eecs wih ime-series cross-secional daa ha have slowly

changing variables o ineres is no jus a minor problem bu raher can be pro-

oundly misleading in assessing he impacs o imporan independen variables.We sress ha we are no simply alking abou some minor changes in esimaion

eciency, bu, raher, esimaes ha are so ar o as o be compleely useless.71

While we preer PCSE, we show all o our specicaions as ohers have used xed

eecs and pooled OLS when invesigaing similar quesions. James Poerba, an


23/29


MI economis, uses boh pooled OLS and sae- and year-xed eecs regres-

sions in his analysis.72 Economiss Amy Redhar Harris, o he Congressional

Budge Oce; William N. Evans, o he Universiy o Nore Dame; and Rober M.

Schwab, o he Universiy o Maryland, also use sae- and year-xed eecs when

looking a educaion spending a he sae level.73 Furhermore, he srengh o he

middle class was associaed wih signicanly higher levels o spending in all hreespecicaions, providing srong conrmaion or our argumens. (see able)

A strong middle class is associated with more education spending

Description of variables*

Variable Description

Spending per student K-12 education spending per student

Strength of middle class The share of income going to the middle 60 percent of the income distribution

Population share of children The share of the population between the ages of 5 and 18

Populat ion share in 20s The share of the population between the ages of 19 and 29




Population share above 60 The share of the population that is 60 years old or older

Nonwhite population share The share of the population that is nonwhite

Log of population The natural logarithm of total state population

per cap GDP ($2009) Real GDP per capita, in $2009

Summary statistics

Variable

Observations

Mean

Min

MaxSpending per student 1000 10072 5039.7 19948

Strength of middle class 1000 0.4851 0.42 0.5402

Population share in 20s 1000 0.1563 0.1216 0.2036




Population share 60 and above 1000 0.1669 0.0622 0.2351

Nonwhite population share 1000 0.228 0.012 0.7681

Per cap GDP ($2009) 1000 34199 21531 57559

Log of population 1000 15.04 13.03 17.42

*put t mtt g tbut vb.


24/29


Results

Spending per student

Panel corrected standard errors

Independent variable Coefficient p-value

Strength of middle class 6383 0.000

Population share in 20s 4875 0.224




Population share above 60 9987 0.000

Nonwhite population share -458 0.060

Per cap GDP ($2009) 0.307 0.000

Log of population -131 0.000

R-squared: 0.7356

N: 950

State- and year-fixed effects



Population share in 20s -3278 0.187



Population share in 50s -15912 0.012



Per cap GDP ($2009) 0.288 0.000


R-squared: 0.9622

N: 950

OLS









Per cap GDP ($2009) 0.307 0.000


R-squared: 0.7356

N: 950


25/29


About the authors

David Madland is he Direcor o he American Worker Projec a he Cener or

American Progress Acion Fund. He has a Ph.D. in governmen rom Georgeown

Universiy and received his B.S. rom he Universiy o Caliornia a Berkeley.

His disseraion abou he poliical reacion o he decline o he dened-benereiremen sysem was awarded he Bes Disseraion Award by he Labor and

Employmen Relaions Associaion. Previously, he worked or Congressman George

Miller (D-CA) on he House Commitee on Educaion and he Workorce as well as

he Resources Commitee.

Nick Bunker is a Special Assisan wih he Economic Policy eam a he Cener

or American Progress Acion Fund. He works on issues relaed o economic

securiy and working condiions o he American worker. Nick graduaed rom

Georgeown Universiy wih a B.S. in inernaional economics. During his under-

graduae career, he was involved wih suden governmen and helped ound amagazine on inernaional aairs. Nick was an inern a CAP during he 2009-10

academic year. He was born and raised in Norwood, Massachusets.


26/29


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45 e M. U, Tut M Vu. i d ctg, J W.v dt, Gugm Wb, ., Handbook of Social Capital(ox: ox Uvt p, 2008).

46 F g ttu vw t ubjt, : B G, ax ok-, pt W, T d m it i qut

Tut a exmt stu. Wkg p 2173 (ces, 2007).

47 T c, s stugg t rv am y eu-t Bugt cut, at p, M 25, 2011, vb ttt://www.ugtt.m/2011/05/25/ut-bugt-ut__866963.tm; cut xtu u -

mt ub mt : st ,1961 1962 tug 2007 2008 , vb t tt://..gv/tt/.?=66 (t otb 2011).

48 M F, G Bug, Btt s: a m tmuutut wt g-tm bt (Wgt, em pittut, 2008); dm J. Bw t, etmtg t t t z ut u t ttv,eut evut p a 21 (2) (199): 179192.

49 Bk, Gg, lt, sm sttu, sQut, nt em dvmt; Gm lg,equt eut otut ; Bum, Mug FmBkgu itt stu eut; Fu ck,rg s et W igg cutu?

50 MK & cm, T em imt t avmtG am s (2009).

51 ib.

52 d et, ivtg eut pw U.s. cmttv(Wgt: ct am pg, 2011). ew G,rub Mut emb eut, nt Tx cut, Bmbg,otb, 24, 2011, vb t tt://www.bmbg.m/w/2011-10-25/ub-mut-mb-ut-t-tx-ut-w-g.tm.

53 aut ut ug nces t m 2008 uv.

54 aut Gss t. W zg t t, w ut mt-b gug t u g-m. du t t g t t, t gu g 10t t but b m 3 t.

55 aut Gss t.

56 Bjm i. pg c l h, Wt aut am

Wt m pt, p v t t u mtg t am pt s at, 2010.

57 ib.

58 Uub mut b M.

59 G, iqut dmg rv.

60 s x m t t vb t jut-t u t m.

61 et, T M c cu em dvmt.

62 a xt, t t ut tt wt ut v ttt gt gtv t wt ttt mut g g tut. sm, xt, tt wt m ut t t m tut, uggtg tt kwg g mm xwt t tt t t g v g. F, xt, u ut w tg t btw tg tt ut g, wt gt t g gu k t v -g (30- 40--) g t g v g. (nt tt ukm vu , u ut w gt tvt btw t t ut v 60 u-

t g, tug vu t t tg gu. ot tt t t g gu,wv, u m ut u.) s, xm: Jmh. ptb, dmg stutu t pt em pub eut,Journal of Policy Analysis and Management16 (1)(1997) 4866; am r h, Wm n. ev, rbt M.swb, eut g gg am,Journal of PublicEconomics 81 (2001): 449472.

63 W w m bvt g btw g tut m- , t t w gtv.

T t bm tv, wv, Gdp t t.

64 ptb, dmg stutu t pt em pub eut; h, ev, swb, eut g gg am.

65 e putz M Bkm, T Gg am su-

t Fug t nt s,Public Opinion Quarterly69 (1)(2005): 6686; ct d. ck t, Wg t Fupub eut ru, rtmt dtt cut,Journalof Research in Rural Education 24 (6) (2009): 116.

66 ptb, dmg stutu t pt em pub eut.

67 Bk, Gg, lt, sm sttu, s Qu-t, nt em dvmt.

68 dv d l s stzw, Jut sz l dm: ev it pt e m lg- Mu rm,American Political Science Review 105 (2)(2011): 238258.

69 nt Bk Jt n. Ktz, nu v. ubt: -g tmtg tm--t m,PoliticalAnalysis 6 (1996): 136; nt Bk, TiMe-seriescross-sec-

Tion daTa: Wt hv W l t pt Fw y?, AnnualReview of Political Science 4 (2001): 271293.

70 nt Bk Jt n. Ktz, Twg out t Bb Wtt Bt Wt: a cmmt G, Km y, InternationalOrganization 55 (2) (2001).

71 ib.

72 ptb, dmg stutu t pt em pub eut.

73 h, ev, swb, eut g ggam.
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