Study warns districts not to overread efficiency rankings

A new national school-finance working paper arrives with a blunt warning for superintendents and school boards heading into another tight budget season: measured district inefficiency appears to have widened over time, but leaders should be careful not to confuse staffing-heavy systems with “central-office bloat” or to overread cross-state rankings that may be distorted by noisy data. In an October 2026 EdWorkingPaper, University of Miami professor Bruce D. Baker analyzes 128,713 district-years covering 8,088 districts in 38 states from 2009 through 2024 and finds that the share of district-years in the two lowest efficiency bands roughly doubled, from about 11 percent in 2011 to about 22 percent in 2024. The same paper also says the least efficient districts, compared with their own state averages, are smaller, spend more, and are more heavily staffed in every category, while differences in administrative spending are small in budget terms.

That matters now because district leaders are already under pressure to find savings. In a July 2026 RAND report based on spring survey data, 54 percent of district leaders ranked budget shortfalls among their top three concerns, up from 33 percent in 2025, and declining enrollment also rose sharply as a problem. What remains uncertain is how much of the widening Baker measures reflects genuine operational slack, how much reflects harder-to-measure changes in district conditions after the pandemic era, and how safely any district can translate a model-based “efficiency” estimate into cuts without damaging goals the model does not capture.

What this paper is actually measuring

Baker’s study does not ask a simple spending-versus-scores question. It uses a stochastic frontier model built on the National Education Cost Model, which estimates each district’s spending relative to the predicted cost of reaching national-average outcomes. In that framework, “technical efficiency” means the share of a district’s current resources, adjusted for cost, that a frontier district would need to produce the same middle-grades achievement. In the pooled national model, a 10 percent increase in resources relative to cost is associated with a 0.066 standard-deviation increase in frontier outcomes; within states, the estimate rises to 0.086 standard deviations. (edworkingpapers.com)

For practitioners, that distinction is more than methodological. The paper is not saying that low-spending districts are automatically better run, or that high-spending districts are wasteful. It is asking how efficiently districts convert resources into one defined outcome measure after accounting for differences in what it likely costs them to produce that outcome. That makes the study more useful than simplistic “money doesn’t matter” arguments, but it also makes the results narrower than a verdict on overall district quality. The model is tied to middle-grades achievement, not to everything communities ask schools to do. (edworkingpapers.com)

That limitation is crucial in a political environment where efficiency rhetoric often outruns the evidence. A district can be efficient in Baker’s sense and still produce mediocre outcomes, because efficiency here is about the relationship between resources, cost, and measured achievement, not about whether the final level of achievement is high enough. By the same logic, a district that spends heavily on services or obligations not captured well by test-based outcome measures may look worse on an efficiency metric than it looks to families or educators. That is an inference from the paper’s design, but it is exactly the kind of guardrail budget debates tend to need. (edworkingpapers.com)

The paper’s biggest practical warning: compare inside states first

One of the study’s most important findings is also the easiest to miss. In the pooled national model, states account for about 20 percent of the variation in measured efficiency. But once Baker includes state frontier intercepts, that falls to about 1 percent, and the state intercepts track the pooled state rankings almost perfectly. He argues that this pattern is consistent with cross-state measurement error in linked assessment data and reported spending, which can flatten the national frontier and exaggerate apparent state differences in efficiency. (edworkingpapers.com)

The practical implication is straightforward: district leaders should be skeptical of interstate league tables. If a board member or consultant arrives with a slide showing one state’s districts as “more efficient” than another state’s, Baker’s paper suggests that some of that spread may be an artifact of data construction rather than a clean read on management quality. The safer use case is benchmarking against comparable districts within the same state, where the model’s frontier is steeper and district rankings are otherwise fairly stable across specifications. (edworkingpapers.com)

That is especially relevant as districts look for reference points under fiscal stress. RAND’s 2026 reporting shows leaders are not just worrying about declining revenue; many are also competing for students through marketing, pre-K expansion, and extracurricular offerings. In that environment, a shaky cross-state efficiency ranking could push leaders toward the wrong cuts or the wrong imitation strategies. A within-state comparison will not remove every measurement problem, but this paper suggests it is much less likely to send districts chasing phantom inefficiencies. (rand.org)

Why “cut the central office” is too small an answer

The other headline finding is likely to land awkwardly in boardrooms. Relative to their own state averages, the least efficient districts in Baker’s analysis are not distinguished mainly by administrative spending. They are smaller, spend more overall, and are more heavily staffed in every category, with total staff per pupil about one standard deviation above the state mean. Administrative spending differences, Baker writes, are small in budget terms. (edworkingpapers.com)

That does not mean administration never matters. It does mean the popular story line — that inefficiency mostly reflects too many people in headquarters — is not what this study finds. The signal points to broader staffing intensity across the system: instructional staff, support staff, specialists, and administrators together. For superintendents, that shifts the real budgeting question from “How much can we trim downtown?” to “Why is our total staffing footprint higher than similar districts’ once cost is taken into account?” (edworkingpapers.com)

In practice, that is a much harder conversation. If the paper is right, districts looking for savings may need to examine school size, underenrolled campuses, duplicated programs, staffing formulas, and service models across the whole organization rather than staging symbolic cuts to a central office org chart. The paper itself does not test each of those mechanisms, so leaders should treat them as hypotheses for local review, not as proven causes. But the study does make one thing clear: anti-administration rhetoric is a poor substitute for a systemwide staffing audit. (edworkingpapers.com)

Because the study is a working paper rather than a peer-reviewed journal article, readers should also treat it as strong new evidence, not final consensus. Still, its cautions are unusually practical. At a moment when districts are under pressure to close gaps quickly, Baker’s paper argues for slowing down just enough to ask better questions: Are we comparing ourselves with the right peers? Are we mistaking higher costs or broader obligations for waste? And are we chasing an easy political target when the real issue may be the total staffing shape of the district? (edworkingpapers.com)

The next thing to watch is not whether districts start talking more about efficiency; that is already happening. It is whether boards use studies like this one to do harder within-state benchmarking and whole-system staffing reviews, or whether they flatten a nuanced model into one more argument for blunt cuts that look decisive on paper but miss where the money — and the trade-offs — actually are. (edworkingpapers.com)