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Working Paper Seeks to Quantify Library ROI

by on August 10, 2021

As librarians, we know that public libraries provide a wealth of benefits to members of their communities, some more tangible than others. In order to prove our continued relevance to our stakeholders, we continually share our success stories and statistics. Less common are reports on the data-driven return on investment that public libraries provide to their funders. A recent working paper titled “The Returns to Public Library Investment” by Gregory Gilpin, Ezra Karger, and Peter Nencka seeks to explore this topic. 

The authors, representing Montana State University’s Department of Agricultural Economics and Economics, the Federal Reserve Bank of Chicago, and Miami University’s Department of Economics, respectively, look at the correlation between library capital funding and resources, usage, student achievement, and housing prices. Ultimately, they were able to demonstrate that increased funding drove substantial increases in children’s attendance at library programs, as well as circulation and overall library visits. In turn, increased library usage boosted children’s performance on standardized reading tests. There was no correlation between library visitation and math scores. Increased funding was not found to have an impact on housing prices. 

Although there are ample studies on the relationship between public school investment and children’s performance, the authors point out that there is very little information available about how other municipal-funded entities can influence educational outcomes; as a result, they turned their attention to public libraries. Using IMLS data from 2018, they noted that 15,427 library branches across the country received $12 billion in operating funds, which translated to a total circulation of more than two billion items. 750 million of those items were borrowed by children, who also had an attendance of over 80 million at library programs. This data was then cross-referenced with test scores obtained from the Stanford Education Data Archive and housing prices from Zillow. Because libraries’ operating expenses largely remain relatively stable over time, they focused on capital expenditures on “major renovations and new library buildings.” 

Through this approach, the authors found that capital investments in public libraries increased visits and children’s circulation by 21% and children’s program attendance by 18%. These increases remain for over ten years following the initial investments. Other metrics such as collections, staff, salaries, and general operating expenditures grew as well. As a result, the authors concluded, “Library capital investment increases both the quality and the usage of libraries.” Similarly, children’s reading scores improved by an average of 0.02 standard deviations in the seven years following capital investments. This was especially the case in smaller and less well-funded school districts, illustrating that libraries tend to pick up some of the slack. 

As capital library funding becomes more visible through initiatives such as the Build America’s Libraries Act, the findings of this study are more important than ever. Most librarians will likely not be surprised by this data because we see our organizations’ impact on young patrons every day, but having definite correlations such as these will undoubtedly be valuable in campaigning for increased funding from our governing bodies. As the authors acknowledge, it’s easy for most legislators to look towards school funding as an avenue for increasing children’s success. While educational support is clearly vital, this study helps solidify the need for public libraries to have a seat at the funding table too. Investing in library infrastructure helps provide more opportunities for young people to attend library programs and creates space for expanded collections. Capital improvements can also add much-needed technology resources that can help span the digital divide and help set students up for success as well. Also reassuring is the fact that capital investments are shown to have long-term effects on both library usage and test scores, as opposed to fleeting improvements. This long-overdue analysis is a win for libraries and justifying what we do. 

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