How can we best use public funding for schools improve the educational outcomes of socially disadvantaged children?

1. How can we best use public funding for schools improve the educational outcomes of socially disadvantaged children? Presentation for International Conference on The Right to Education for Every Child Belgrade June 2-3 2009 Rosalind Levačić, Institute of Education, University of London

2. Interlinked issues in using public finance to combat educational disadvantage

3. Examples of additional funding to compensate for social disadvantage Netherlands (from 2007) abandoned use of immigrant status and fund only in relation to parents’ education. Additional 30% for pupils whose parents’ highest level is junior secondary and 120% more for parents whose highest level is primary or less. England: central government funds local authorities about 70% more per pupil for those with additional educational needs (about 19% with AEN) 12% of total funding is for AEN + deprivation. AEN based mainly on social welfare payments data.

4. How has additional funding to combat educational disadvantage been used? Policies in advanced economies date from 1960s. Examples: USA: Title 1 for schools- small additional funding and not well used (e.g. withdrawal of pupils from class) Head Start and Follow Through for early years U.K. A range of different programmes for schools. Since late 1990s stronger focus on early years and integrating education, health and social work services. Broad conclusions: additionally funded school based programmes have had at best small positive effects. most effective are good quality early years programmes which also involve families; decentralization: greater focus on responsibility for delivery of results at the school level

5. Stylisation of rates of return to investment in education at different stages of the life cycle Carneiro and Heckman (2003) Rate of return to expenditure on education and training (%) Pre-school Opportunity cost of funds Cost % School Post school 5 16 Age of individual

6. Main methods of funding from central government to local level Sustained public funding rather than one-off short term projects. • Categorical (ear-marked) grants for specific programmes to raise attainment of socially disadvantaged children: can be combined with local matched funding 2. Priority areas/schools: extra funding to pay teachers more or provide more teachers per 100 pupils 3. Per pupil funding: additional funding for socially disadvantaged pupils

7. Per pupil funding for social disadvantage • First best: as part of system-wide funding of pre-school and basic education using a formula in which the main element is per pupil funding. Budgets allocated to schools and managed by them • Second best (if school financial decentralisation is not introduced): additional funding per socially disadvantaged pupil in relation to numbers of such pupils enrolled at the school

8. Why per pupil funding and school based financial management could improve education for the socially disadvantaged Per pupil funding: horizontally equitable - stops any under-funding of pupils of low socio-economic status (SES) Funding formula can include additions for educationally disadvantaged pupils – makes them more attractive to enrol and retain. Schools have more flexibility in how to use resources to combat educational disadvantage- provided teachers value this, have knowledge of how best to use resources, and are provided with information on their pupils’ progress in relation to SES and prior attainment compared with other schools.

9. 1. Basic per pupil allocation 3. Special programmes 2. 4. Schools’ additional site costs Four Components of a Per Capita School Funding Formula Pupils’ additional educational needs

10. Indicators for funding pupils’ additional educational needs Dimensions of social disadvantage Low educational achievement Learning difficulties Poverty Low socio-economic status Ethnicity Indicators Test results at end of previous education phase Psychological/educational assessment of the child Income of family or area Occupation or education of parents Self-identification: census data from school or national survey

11. Characteristics of a good indicator of additional educational need The indicator (or indicators) should: • be a good predictor of low educational attainment • not be manipulatable by local governments or schools • not give schools wrong incentives (e.g. use of test results of the school receiving the funding) • use data that are easy to collect e.g. are already collected for other purposes

12. What has to be overcome in combating educational disadvantage in central and eastern Europe: attitudes • Lack of awareness of and concern about the relationship between socio-economic status and educational outcomes • Schools judged by outcomes of the most able pupils and not by value added i.e. how well the school educates pupils of all social groups- e.g. focus on olympiads- with extra funding

13. What has to be overcome in combating educational disadvantage in central and eastern Europe: provision • Low funding per pupil and consequently low teacher salaries • Decline since communist period of pre-school education and in particular of free provision and in rural areas • Lack of good quality early years education, in particular for socially disadvantaged groups

14. What has to be overcome in combating educational disadvantage in central and eastern Europe: funding methods • Centralised and inefficient use of finance and resources • Traditional systems of school funding still remain in a number of countries- based on historic expenditure and actual numbers of staff in post • Absence of compensatory funding for social disadvantage- only for special education to which children from poor backgrounds tend to be assigned in order to remove them from mainstream schools • Lack of accountability for how human and financial resources used in achieving educational outcomes

15. Barriers to school funding reforms • Impossible to introduce system-wide school based financial management reforms without strong political will from central government • Lack of interest in using indicators of social disadvantage in funding formulae • Lack of data to identify children from socially disadvantaged backgrounds (Open Society Institute (2006) Monitoring Education for Roma.)

16. What can be done? • High quality early years provision integrated with health and social services and targeted at socially deprived areas to develop children’s social and cognitive skills in order to make them better prepared for school. • Considerably higher per pupil funding for low SES children at school (at least twice as much) but should be used to provide good quality teaching over a longer sustained period (instruction hours, attendance and retention) rather than lower class size. • More control at school level of use of finance and resources to improve the attainment of socially disadvantaged pupils. • Much better data: transparent and reliable information on how pupils of different social backgrounds progress through the education system - used for evaluation, monitoring and accountability. • Hearts and minds: teachers who value each child equally.

17. THE END

18. Additional funding for education of socially disadvantaged: allocation • Major funding source must be central government since incidence of social disadvantage is uneven.

19. How has additional funding to combat educational disadvantage been used? Policies in advanced economies date from 1960s. Examples: Netherlands Funding for schools with high proportions of socially disadvantaged pupils for additional teachers as part of formula funding. France (Priority Education Zones) Additional pay for teachers and additional staff

20. Use of additional funding to combat educational disadvantage: USA Title 1 (since 1965) Reconfirmed in 2002 No Child Left Behind Act. Federal funding to states then allocated to schools. But relatively small amount per pupil. Not well used (e.g. withdrawal of pupils from class) Pre-school programme: Head Start (also from 1960s) Evaluations: positive effects into adult hood of high quality programmes on attainment, income and reduced criminality.

21. Use of additional funding to combat educational disadvantage: England • Central government funded programmes e.g. Excellence in Cities learning mentors; learning units within school for disruptive pupils; gifted and talented programmes. Modest positive effects. • Sure Start: Neighbourhood Nurseries and Children’s Centres (0-5 years): home-visits, support for parents, play and learning activities; health care, special needs support. Sure Start Evaluation (2008) Improved social development of 3 year olds

22. Why improve the educational attainment of children from socially disadvantaged groups? • Equity: a child’s educational opportunities should not depend on gender, ethnic group or socio-economic-status • Efficiency (Carneiro & Heckman, 2003; Heckman and Masterov, 2007 ) Public investment in the education of children from socially disadvantaged backgrounds creates much higher benefits over the lifetime of the child than the additional costs – but the right types of investment needed.

23. Social disadvantage and educational attainment: importance of family influence A complex of factors reflected by indicators of: • Low household income • Parental occupation- unskilled or unemployed • Parental education: low qualifications • Family structure – single parents • Home language different from national language and language of instruction • Ethnic groups which have some of the above characteristics and are in addition discriminated against • Living in an area of social deprivation

24. Indicators of social disadvantage used in the allocation of additional funding to local authorities in England DATA SOURCE: NATIONAL Children in households receiving state benefits Low birth weight babies Deprivation indicator of area based on income, employment and qualifications of adults DATA SOURCE: LOCAL English as additional language Ethnic groups with low educational attainment Pupils entitled to free school meals

25. Indicators of social disadvantage used in the school funding formulae in the Netherlands • Parents’ highest education: junior secondary and for higher per pupil allocation • Parents’ highest education: primary Replaced indicator of child or parent born abroad- i.e. emphasis more recently is on social disadvantage not ethnicity

26. Central or local discretion in use of funding? Central: for Local: for Effect ways of using additional resources depend on local contexts and cannot be determined centrally Local professionals need to be motivated and empowered Central control can be exercised through holding local managers to account for performance- requires appropriate data • Ensures funding spent on socially disadvantaged • Best practice knowledge can be applied

27. Studies on use of additional resources to combat educational disadvantage • Carneiro, P. and Heckman, J. J. (2003), 'Human Capital Policy. Inequality in America: What Role for Human Capital Policy?'. IZA Discussion paper 821. • Heckman, J. J. and Masterov, D. V. (2007), 'The productivity argument for investing in young children'. NBER Working Paper No. 13016. • Karsten, S. (2006), 'Policies of disadvantaged children under scrutiny: the Dutch policy compared with policies in France, England, Flanders and the USA'. Comparative Education, 42 (2), 261-282. • Leuven. L. and Oosterbeek, H. (2007), 'The effectiveness of human capital policies for disadvantaged groups in the Netherlands'. In L. Woessmann and P. Peterson (eds), Schools and the equal opportunity problem (pp. 327): MIT Press. • Machin, S., McNally, S. and Meghir, S. (2004), 'Improving pupil performance in English secondary schools: Excellence in Cities'. Journal of the European Economics Association, 2 (2-3), 396-405. • Nores. M., Belfield, C. R., Barnett, S. and Schweinhart, L. (2005), 'Updating the economic impacts of the High/Scope Perry Pre-School Program'. Educational Evaluation and Policy Analysis, 27 (3), 245-262. • Stewart. K. (2009), ''A scar on the soul of Britain': child poverty and disadvantage under New Labour'. In J. Hills, T. Sefton and S. K. (eds), Towards a More Equal Society? Poverty, inequality and policy since 1997. Bristol: Polity Press. • Sweinhart, L. J. and Weikart, D. P. (1997), Lasting Differences: The High/Scope Perry pre-school curriculum through age 23. Ypsilanti, Michigan: High Scope Press. • The National Evaluation of Sure Start (NESS). (2008), The Impact of Sure Start Local Programmes on Three Year Olds and Their Families: Institute for the Study of Children, Families and Social Issues. Birkbeck, University of London. HM Stationery Office.

28. From what angle am I approaching this question? • As an education economist: recent revitalisation the this area of economics due to (a) realisation of importance of human capital of all members of society for its welfare; (b) more empirical evidence • As an international consultant who has worked on school finance reform attempts in 7 transition countries

29. Conference proceedings highlight importance for improving Roma education of • Access to good quality early years education • Inclusion into mainstream schools Consistent with what has been learnt in west Europe and North America about best ways to combat educational disadvantage

30. Accountability: monitoring and evaluation Is an essential component of an effective and efficient decentralised education system. Transparency in how funds allocated and used. Monitoring of attainment of children from socially disadvantaged backgrounds. Evaluation of education interventions for socially disadvantaged children to learn which are cost effective and which not.

31. Pupil Level Annual Survey in Englanda question: “What is the child's ethnic group?” White: British White: Irish Traveller of Irish Heritage Gypsy/Roma Any other White background Mixed: White and Black Caribbean Mixed: White and Black African Mixed: White and Asian Any other Mixed background Asian or Asian British: Indian Asian or Asian British: Pakistani Asian or Asian British: Bangladeshi Any other Asian background Black or Black British: Caribbean Black or Black British: African Any other Black background Chinese or other ethnic group: Chinese Any other Parents supply information when registering child: self-classification

32. What can be learnt from experience of compensatory educational policies? • The richer economies of Europe and North America have made limited progress in the last 40 years in reducing educational inequality. • Nevertheless the issue is receiving ever greater political attention because of the increasingly apparent social costs of educational inequality. • Eastern and central Europe can learn from this experience and adopt and adapt what our current knowledge indicates are better practices