Giving schools more resources – without putting specific restrictions on how they are spent – can have a positive impact on pupil outcomes. That is the central finding of a study by Monique de Haan, which examines the effects of additional funds for lower-ability pupils in the Netherlands. This is an important result, the author concludes, since while governments can change the amount of resources given to schools, they often can''t dictate how those resources are used.

The research, which is published in the February 2017 issue of the Economic Journal, examines the impact of additional money to provide learning support for pupils with learning or behavioural difficulties, which has been allocated by the Dutch government since 1999. The provision of these extra resources increases the probability that a pupil will pass the exam at the end of secondary education by at least 2.1 percentage points for pupils in the basic vocational track and by at least 5.2 percentage points for pupils in the advanced vocational track.

In 1999, the Dutch government implemented a policy measure called Learning Support (LWOO), which provides secondary schools that offer pre-vocational secondary education with additional funding for each enrolled pupil with learning or behavioural difficulties.

All secondary schools in the Netherlands receive funding from the national government on the basis of the number of enrolled pupils and schools receive almost 60% more funding for low-ability pupils. For example, in 2008, the government spent about €7,000 on a regular pupil in secondary education and €11,100 on each pupil that was eligible for Learning Support.

Schools can freely decide how to spend the additional money on providing learning support for eligible pupils. Uses can range from tutoring and homework assistance, to providing exercises to improve a pupil''s studying skills. A pupil can receive learning support in class but also outside the classroom. Many schools choose to form small, separate classes with pupils that receive Learning Support so that they can give more individual attention to each of these pupils.

At the moment of enrolment, when a pupil is about 12 years old, a secondary school can start an investigation into whether a pupil needs Learning Support. This assessment is usually initiated on the basis of advice from the primary school. It consists of a number of tests, including a reading test, an arithmetic test, an IQ-test and psychological tests that measure the presence of social/emotional problems.

If the school decides that the pupil needs Learning Support, it applies for additional money at a regional referral committee. The committee decides on the basis of the test results whether the pupil is eligible for Learning Support and thus whether the school will receive additional funding.

A pupil is eligible if he or she is lagging behind in two of the following subjects – technical reading, reading comprehension, spelling and arithmetic – and one of these subjects should be reading comprehension or arithmetic. In addition, the pupil should have an IQ-score between 75 and 90. Pupils with an IQ-score between 91 and 120 can be eligible, provided they are lagging behind in two of the specified subjects and have social/emotional problems.

School funding policies are in general difficult to evaluate because they are often implemented nationwide. What''s more, if there is variation in resources between schools, this is generally correlated with (unobserved) school and pupil characteristics. This also holds for the policy measure of Learning Support investigated here. The new research tackles this problem by using a novel econometric technique known as a non-parametric bounds analysis.

''The Effect of Additional Funds for Low-ability Pupils: A Non-parametric Bounds Analysis'' by Monique de Haan is published in the February 2017 issue of the Economic Journal. Monique de Haan is at the University of Oslo.