International educational performance of the United States: is there a problem that money can fix?

This paper addresses two important issues concerning US education: first do monetary inputs affect educational achievement; and second, if monetary in puts do affect educational achievement, how does the US compare internation ally, when considering both achievement and fiscal effort? We use several n ational and international reading and mathematics achievement tests as educ ational outputs; and US state and international income and educational expe nditures per capita as inputs. Given our use of aggregate data we focus on describing the relationship between educational inputs and outputs at the s tate or national level. Still, our results indicate that there is an associ ation between relative fiscal effort and achievement. We find that the US p erforms as expected, given its income and relative fiscal effort. Me also f ind several US states to be as efficient as top performing foreign nations.