The United States has dramatically increased its funding for public schools over the last four decades. Real per-pupil expenditures have nearly doubled since 1980.

In a paper in the American Economic Journal: Economic Policy, author Jason Baron found that when school budgets increased in Wisconsin, how that money got allocated made a big difference into student outcomes.

Baron says that additional spending on operations, such as teacher salaries and support services, positively affected test scores, dropout rates, and postsecondary enrollment. But extra capital expenditures on new buildings and renovations had little impact.

He spoke with Tyler Smith about why different types of school funding matter and how school budgets may continue to evolve.