NYC vs London - School Spending — reading pack

Page: https://gautsch.org/research/nyc-vs-london-school-spending/

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The short version

Cowen’s “through the roof” is not rhetoric. New York City is projected to spend $42,168 per student in 2025–26, the highest of any large district in the United States, while enrolment has fallen by roughly 100,000 since 2019–20. England’s national funding formula averages £6,608 per pupil; even generously adjusted for London weighting and converted to dollars, the London figure lands somewhere near $11,000–14,000. That is a gap of roughly three to four times. ⚠ But a large slice of that gap is accounting, not classrooms, and the honest version of this comparison needs that spelled out — which is what most of this page does.

Relevant transcript excerpt

Source: https://conversationswithtyler.com/episodes/daron-acemoglu-2/

Annotated transcript: https://gautsch.org/research/#a15

COWEN: When you say given up, you look at New York City, which is a complex place with some real problems, but per capita spending per student is through the roof.

Research commentary

Adam asked: “Can you give me some data on per capita spending in New York City. Compare it to, say, London and give some historic data on spending growth indexed for inflation?”

New York City

New York State as a whole spends about $30,723 per student — also first in the nation. The state’s spending gap over the national average has more than quadrupled since 2000.

The enrolment fact is the one that makes the number strange: NYC has roughly 100,000 fewer students than in 2019–20, and spending per student rose anyway. Fixed costs — pensions, debt service, buildings, transportation — do not fall when a child leaves.

Sources: Citizens Budget Commission · Empire Center · Reason Foundation

London / England

London attracts an area cost adjustment above the national formula — inner London is historically the highest-funded region in England. I could not source a clean 2025–26 inner-London per-pupil average; a rough estimate of £8,000–9,000 is plausible but unverified.

At roughly $1.27/£: £8,500 ≈ $10,800.

Sources: DfE school funding statistics 2025–26 · ASCL information paper · IFS annual report on education spending

The comparison, honestly

Headline: NYC ≈ $42,000 vs London ≈ $11,000 — about 3.8×.

Why that overstates the real gap:

1. Different things are being counted. The US per-pupil figure is total current expenditure: teacher pensions and retiree health, debt service, student transportation, food service, special education, central administration. England’s NFF number is the mainstream schools block — it excludes high-needs funding, most capital, and portions of pension costs funded through separate grants.
2. Pensions and retiree health are enormous in NYC and are a legacy-cost transfer, not instruction.
3. Health care is in the number. US teacher compensation carries employer health insurance; the UK’s does not, because the NHS does.
4. Cost of living and salary structure differ; so does the definition of a “pupil.”

A fairer frame — national totals. OECD comparisons of total primary-and-secondary spending per student, PPP-adjusted, put the US around $15,000–16,000 and the UK around $12,000–14,000 — a gap of maybe 15–25%, not 400%. NYC is an outlier within the US, not a representative American figure. ⚠ These OECD figures are from memory and should be re-sourced before use.

What survives the caveats: NYC really does spend far more per student than almost anywhere in the world, the gap has widened sharply since 2000, and spending has continued rising as enrolment falls. Cowen’s point stands. The 3.8× number does not survive scrutiny; a 2–2.5× real-resources gap probably does.

Why this matters in the conversation

This is the exchange where Acemoglu is at his most exposed and he knows it. His claim is that America has “given up on the education of about a third to a half of the youth.” Cowen’s counter is that NYC is the richest-funded school system on earth and the results are middling — so money is plainly not what was given up on.

Acemoglu concedes immediately — “Oh, yes, I know… We’re throwing money at it, but we’re not really dealing with the root causes” — and pivots to a claim about dysfunction and ideology, then agrees teachers’ unions “need to be reconstituted.” That is a substantial retreat from “we have given up,” and it happens in three lines.

The interesting thing for you: the CBC’s framing is literally “Highest Costs, Middling Marks.” Both men accept the premise that the money isn’t reaching the outcome. Neither offers a mechanism.

From the book

The interview’s NYC-versus-London comparison is Cowen’s, and it is not in What Happened to Liberal Democracy?. What the book has is the same argument at national scale, in Chapter 1, as part of the case that liberal democracy stopped delivering:

“Building schools is expensive, but it’s much easier than increasing the quality of education once the buildings are there… Many indicators point to worsening educational performance over the last decades, even as inflation-adjusted spending per pupil rose from around $6,500 in the 1970s to almost $17,000 in 2019, both in 2022–23 dollars. By the late 2010s, only a third of fourth-grade students could read at the proficient level expected for their grade.”

A 2.6× real increase in per-pupil spending, against a third of fourth-graders reading at grade level. That is the shape of the claim this page is testing, sourced to a figure Acemoglu himself publishes, and it does the job the “3.8×” ratio was going to do — without the London estimate the working notes below say not to publish.

Two things worth noting about how he uses it:

• It is deliberately not a story about schools. The passage sits inside a longer list — health spending three times France’s or Japan’s against lower life expectancy, one in four Americans without a primary care physician — and the conclusion drawn is about public services in general failing to convert money into outcomes. Education is one instance of “the crisis of drains and dole” he names in Chapter 10, not the subject.
• He does not blame teachers’ unions, in the book or, notably, anywhere the transcript reaches. The causes offered are that the low-hanging fruit was picked, that American schools serve a harder population, and that the pandemic made it worse. Cowen’s framing of the exchange invites the union answer; Acemoglu doesn’t take it.

The book supplies no international comparison of school spending, so nothing above needs re-sourcing to it — and the NAEP-style outcome data the working notes ask for is exactly what his “only a third of fourth-grade students” figure is.

Working notes

Confidence. The NYC figures are well sourced and mutually corroborating across three independent organizations with different political priors — CBC, Empire Center, Reason. Treat $42,168 (2025–26 projected) and $35,914 (2021–22 actual) as solid.

⚠ The weakest numbers on this page are the London ones. The England-wide NFF average is solid; the inner-London figure is my estimate and is marked as such. The dollar conversion compounds that with an exchange-rate assumption. Do not publish the “3.8×” figure. If this page graduates to something reader-facing, someone needs to pull the DfE’s local-authority-level schools block allocations for the London boroughs and do the arithmetic properly. That is a one-hour job with the right spreadsheet and I’d rather flag it than fake it.

The inflation-indexed history you asked for is only half here. I have “+21% real over ten years to 2024” for NYC and the “quadrupled gap since 2000” for the state. What’s missing is a proper CPI-deflated series 2000→2026 for NYC specifically. The IBO publishes the underlying data; it needs assembling, not searching.

Draft 2 should add:

• A real deflated time series, NYC per-pupil in constant 2026 dollars, 2000–2026
• The same for enrolment on a second axis — the divergence is the whole story
• Outcome data alongside it (NAEP scores) so “middling marks” is shown rather than asserted — and the book gives the national version of exactly this pairing, so the page can lead with Acemoglu’s own numbers and use NYC as the local case rather than the other way round

Checked against the book. No NYC–London comparison exists in it; the national spending-versus-outcomes claim does, in Chapter 1, and is written up above. That does not rescue the “3.8×” figure — still do not publish it — but it does mean the page no longer depends on it to make its point.

Source and its limits. Checked against the audiobook edition (Penguin Random House Audio, narrated by John Lee), machine-transcribed, so references are by chapter. The $6,500 / $17,000 figures are machine-transcribed numbers and the transcript garbles the base-year phrase; confirm both against print before publication.

Related: Education Quality and Economic Performance - The Outliers

Research page built in conversation with Claude.