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School Finance Reform and School Quality: Lessons from Vermont

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Thomas Downes ()

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Abstract

In June of 1997, the elected leaders of Vermont enacted the Equal Educational Opportunity Act (Act 60) in response to a state supreme court decision in Brigham v. State. Act 60 could provide a unique opportunity to determine if dramatic school finance reforms like those enacted in Vermont generate greater equality in measured student performance. This paper represents an attempt to document the changes in the distributions of spending and of student performance that have occurred in the post-Act 60 period. This paper begins with an overview of the institutional structure of educational finance and provision in Vermont. One purpose of this overview is to make the argument that the Vermont case is particularly interesting because there have not been dramatic demographics changes that could obscure the impact of finance reforms. With this context established, I then use a panel of Vermont school districts that spans the pre- and post-Act 60 period to examine the extent to which there has been convergence across school districts in per pupil expenditures and in student performance. Spending has clearly converged; a definitive answer on the extent of convergence in student performance must wait until more years of data are available.

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Paper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0309.

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Date of creation: 2003
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Handle: RePEc:tuf:tuftec:0309

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  1. Murray, Sheila E & Evans, William N & Schwab, Robert M, 1998. "Education-Finance Reform and the Distribution of Education Resources," American Economic Review, American Economic Association, vol. 88(4), pages 789-812, September. [Downloadable!] (restricted)
  2. Thomas J. Nechyba, 1996. "Public School Finance in a General Equilibrium Tiebout World: Equalization Programs, Peer Effects and Private School Vouchers," NBER Working Papers 5642, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Caroline M. Hoxby, 2001. "All School Finance Equalizations Are Not Created Equal," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1189-1231, November. [Downloadable!] (restricted)
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  4. Benabou, Roland, 1996. "Equity and Efficiency in Human Capital Investment: The Local Connection," Review of Economic Studies, Blackwell Publishing, vol. 63(2), pages 237-64, April. [Downloadable!] (restricted)
  5. Husted, Thomas A & Kenny, Lawrence W, 2000. "Evidence on the Impact of State Government on Primary and Secondary Education and the Equity-Efficiency Trade-Off," Journal of Law & Economics, University of Chicago Press, vol. 43(1), pages 285-308, April.
  6. Robert Manwaring & Steven Sheffrin, 1997. "Litigation, School Finance Reform, and Aggregate Educational Spending," International Tax and Public Finance, Springer, vol. 4(2), pages 107-127, May. [Downloadable!] (restricted)
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  1. Stephen J. Schmidt & Karen Scott, 2004. "Reforming Reforms: Incentive Effects in Education Finance in Vermont," Rensselaer Working Papers in Economics 0425, Rensselaer Polytechnic Institute, Department of Economics. [Downloadable!]
  2. Joydeep Roy, 2004. "Impact of School Finance Reform on Resource Equalization and Academic Performance: Evidence from Michigan," Econometric Society 2004 North American Summer Meetings 425, Econometric Society. [Downloadable!]
  3. Joydeep Roy, 2004. "Effect of a School Finance Reform on Housing Stock and Residential Segregation: Evidence from Proposal A in Michigan," Public Economics 0412004, EconWPA. [Downloadable!]
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