We present a survey of the literature on the economic returns to school quality. A
dozen studies conducted over the past 20 years show remarkably consistent estimates of the
effect of school quality on students’ subsequent earnings. A 10 percent increase in school
spending is associated with 1 to 2 percent higher annual earnings for students later in life.
We argue that the similarity of the findings across data sources and research methods suggests
that school quality has a true causal effect on student earnings. Increases in school resources
are also associated with significantly higher educational attainment, although the range of
estimates of the effect is relatively wide.