The Long-Term Economic Implications of Investing in Student Education

While there are countless free online resources for adults to gather economic knowledge to better understand the world around them, kids rely heavily on the formal K-12 system for this education. This makes the curriculum a significant foundation to how kids are prepared for the real world. With schools being funded based on the socioeconomic status of the towns they reside in a ground for disparities across schools create critical determinants of their future economic success and entrepreneurial behavior of the students who are a part of lower founded schools. If these students grow up without an education in basic economics they are set up to fail in their adult lives.

Research across multiple articles firmly establishes socioeconomic status (SES) as a powerful and consistent predictor of cognitive function, language ability, and academic achievement in youth. The Capstone Project on North Linn Middle School and the LPI Fact Sheet both highlight inequity in some towns compared to others based on the funding they receive. Students from low-SES backgrounds are listed by factors like eligibility for Free and Reduced Lunch which can be consistently correlated to lower achievement in test scores. A core challenge is pointed out about unequal resources in the Learning Policy Institute's fact sheet, "How Money Matters." The article explains that reliance on local property taxes creates significant funding disparities where high-poverty districts often receive less funding to the local school system. The drop in school founding for these areas directly translates into student performance dropping, a pattern that is exacerbated by funding cuts.

A systematic review on "Associations of socioeconomic status with cognitive function, language ability, and academic achievement," provides a crucial view on the link between low SES and poor academic outcomes. This research article identifies three key environmental factors: Stress, Support, and Stimulation. Cognitive stimulation, such as access to learning materials, reading activities, and language input, was the most consistent mediator across all outcomes including executive function, language, and academic achievement. Additionally, stressors, like financial strain and parental stress, along with a lack of emotional support, including positive teacher-student relationships and parental warmth, significantly bring about the negative effects of low SES. These findings demonstrate that poverty creates a more stressful environment that hinders the development of kids during a fundamental stage in their life where cognitive skills are necessary for school success.   

While home environment and parenting are critical, research also points to schools and systemic factors playing a vital role in a student's ability to succeed. The systematic review specifically found that broader contextual variables like educational expectations from students, parents, and teachers promote academic self-efficacy, and a positive classroom and school environment. Helping implement support systems for the students for a more positive school environment was a strong area of thought to get the SES-achievement link. The impact of effective schools and positive adult relationships can act as protective factors that buffer the impact of low SES. Furthermore, one article offers a unique perspective on the curriculum, showing that introducing economics classes in high school led to a significant 4 percentage point increase in students' likelihood of engaging in entrepreneurial behavior later in life. This suggests that the content of the education itself can be a powerful, modifiable tool that can help shape long-term economic outcomes for the student.

The collective body of research provides many areas that are clear targets for intervention by the school system. The fundamental solution lies in reducing poverty itself through structural changes like economic reform and targeted financial support, as noted in the systematic review. Secondarily, schools and policymakers should focus on strengthening the key protective factors. The protective factors would include increasing funding equity in education, as advocated by the LPI. Founding equity in education would include access to high-quality child care by implementing programs to enhance cognitive stimulation for disadvantaged youth. Some other help could include deliberately fostering high, yet non-pressuring, educational expectations by teachers to support students across all school levels. By addressing both the material and environmental disparities, the goal of reducing socioeconomic inequality in educational outcomes becomes an achievable policy and should be an educational priority.