Education funding and my soap opera life

My life is an incredible soap opera. (Wouldn't it be cool if it were a soap Oprah?) I'm not going to spill my beans on the internet, but suffice it to say that I'm going to write a chick lit book and make a bazillion dollars.

I told you that I'd talk about my paper on poverty, inequality, and human capital policy, so here goes. Rich kids usually go to richer schools, and poor kids usually go to poorer schools. Disparities in per pupil expenditures can be as high as 5k/year. Rich kids are more likely to be rich when they grow up, and poor kids are more likely to be poor when they grow up. Rich kids are more likely to stay in school longer (including going to college) than poor kids. Poor kids are also more likely to have lower cognitive achievement as measured by standardized tests.

People make money by getting jobs, keeping jobs, and getting promoted in those jobs. People tend to get jobs by having more years of school, and they keep jobs and get promoted by having skills that employers are willing to pay for. Some of these are "cognitive" skills, like reading, writing, and rithmeticing, and some are non-cognitive skills, like showing up to work consistently and on time, and some are somewhere in between, like being able to interact well with people.

Ok, so given all these empirical facts, the question is, are they connected? Do poor kids have lower cognitive achievement and lower educational attainment (years of education) than rich kids because they have received lower human capital investment (i.e., because their schools from pre-K through high-school have less money)? Or, do poor kids fare worse because of some other reason, i.e., cultural differences, structural constraints (i.e., discrimination), macro-economic problems, etc)?

It depends on who you ask and what you ask. A lot of academics believe that the evidence shows that higher "input" levels do not yield higher educational achievement or attainment. Others do, but even those who do do not believe that funding disparities can account for all of the disparity in outcomes between the rich and the poor. On the other hand, most labor economists believe that the evidence suggests that higher input levels DO lead to higher incomes later in life. So, it may be that higher inputs allow for better teaching of non-cognitive skills that employers are willing to pay for but that don't show up in test scores. On the other hand, it may be that somebody is doing some bad analysis.

I tend to believe that more funding for poor K-12 schools would help them measurably, but not enough to eliminate disparities between the rich and the poor. I believe that cultural differences between rich and poor people in attitudes toward education and success are also important, and these are a lot harder for government to change.

There also seems to be a consensus that investments in education are more effective at younger ages, because that's when kids are most malleable (I guess). Better funded and more widely available Head Start would be good. Also, as common sense would suggest, poor people go to college more frequently when it's cheaper, so more federal funding of higher education would help improve equality.

Ok, well, that's the gist of it. Any comments?