Invest in people, not pavement

Noelle Texidor, Opinion Columnist

In 2020, the U.S. government spent $204 billion on roads and highways; compared to other state and local expenditures, highways and roads were the government’s fifth-largest expenditure. In the same year, hospitals received $345 billion, while schools only received $122 billion. There are multiple institutions in America that deserve greater government funding, even more than roads and highways.

Choosing to invest more in schools, for example, can have long-term benefits for the economy, society and the country as a whole. Well-funded schools can provide better education, which can lead to a more educated workforce, higher-paying jobs and economic growth. In addition, investing in schools can help to reduce inequality by providing opportunities to those who may not have access to quality education.

In a study conducted by Kirabo Jackson, an Institute for Policy Research economist, K-12 standardized test results were examined to observe long-term effects, such as how much students earn as adults. He examined changes in K-12 public school spending due to school finance reforms in 28 states, and Jackson found strong connections between increased school spending and positive earning outcomes.

Jackson’s findings showed that when a district’s per-student spending increased by just 10 percent, those exposed to the increases across all 12 school-age years completed more years of school. As adults, the students earned more and were less likely to be poor.

One example from 2012 showed that schools spent $12,600 on average per student. Jackson’s findings suggested that a permanent 10 percent spending increase – or an increase of $1,260 per student overall – would lead to seven percent higher wages at age 40 and a three percentage point lower likelihood of adult poverty among those exposed to the spending increases across all 12 years of their public school education.

There are still advantages to investing money in roads and highways, such as improving transportation and reducing traffic congestion. This can lead to better access to jobs and businesses and more efficient transportation of goods and services. According to Bidnet, transportation budgets tend to change based on different needs, including the previous year’s spending. In 2007, $146 billion were spent maintaining highways, costs that included the building and operation of new highway infrastructure. About three-quarters of the total funding came from state and local governments, while one-quarter came from the federal government. While there are benefits to investing in roads and highways, investing in schools results in higher growth for the economy; an increase in spending on roads does not.

In the long run, a permanent increase of public investment in schools of one percent of GDP raises output by about 24 percent, whereas an equal investment in roads boosts production by only five percent, according to IMF Blog. Both assets are essential, and the choice depends on the priorities of the government and the needs of the community. But, it’s necessary for the government to prioritize spending on institutions like schools and higher education. When the government invests in schools, students are able to contribute to the economy as they enter the workforce and are more likely to earn higher incomes, while also being educated.