Ch 6, Betts compares the literature and studies about school spending, graduates' future earnings and education attainment. He finds that the students study in better schools increase earnings. However, the studies do not show there is a significant correlation between increase spending per pupils and education attainment.
The economic concept, diminishing marginal return is used in this chapter. Increase in additional school inputs may have diminished utility in returns. He points out the unionization among teachers and the influence of bureaucracies in public schools lower efficiency of public schools (p.170). Thus, increase in school resources is not equivalent to increase in education attainment. The issue of utilizing school resources to pupils is crucial. Not blindly increase the additional spending!
On the other hand, Betts finds that the estimated benefit cost ratio to keep a student in school (or college)an extra year is strikingly higher than the benefit cost ratio of increasing spending per pupil (p.184). Keeping the students still in school can benefits students' future earnings. In light of this, Betts suggests develop policies designed to encourage students to stay in school longer. And this kind of policies requires extra expenditure.
Increase in school resources is still necessary, because it can lower the drop out rate of schools. I agree with Betts' argument that the utility of school resources and the effects of families and peers affect student educational attainment. However, I have questions about finding a clear and accurate statistic about effects of families and peers on student educational attainment. In what way, can we exclude the other factors and just focus on school input on students? If the factors are interrelated, in other words, we cannot separate them.