IDEAS home Printed from https://ideas.repec.org/a/eee/pubeco/v176y2019icp118-141.html
   My bibliography  Save this article

The effect of increased funding on student achievement: Evidence from Texas's small district adjustment

Author

Listed:
  • Kreisman, Daniel
  • Steinberg, Matthew P.

Abstract

We leverage an obscure set of rules in Texas's school funding formula granting some districts additional revenue as a function of size and sparsity. We use variation from kinks and discontinuities in this formula to ask how districts spend additional discretionary funds, and whether these improve student outcomes. A $1000 annual increase in foundation funding, or 10% increase in expenditures, yields a 0.1 s.d. increase in reading scores and a near 0.08 increase in math. In addition dropout rates decline, graduation rates marginally increase, as does college enrollment and to a smaller degree graduation. These gains accrue in later grades and largely among poorer districts. An analysis of budget allocations reveals that additional funding only marginally affects budget shares.

Suggested Citation

  • Kreisman, Daniel & Steinberg, Matthew P., 2019. "The effect of increased funding on student achievement: Evidence from Texas's small district adjustment," Journal of Public Economics, Elsevier, vol. 176(C), pages 118-141.
    • Handle: RePEc:eee:pubeco:v:176:y:2019:i:c:p:118-141
    DOI: 10.1016/j.jpubeco.2019.04.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0047272719300623
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jpubeco.2019.04.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sebastian Calonico & Matias D. Cattaneo & Max H. Farrell & Rocío Titiunik, 2019. "Regression Discontinuity Designs Using Covariates," The Review of Economics and Statistics, MIT Press, vol. 101(3), pages 442-451, July.
    2. repec:fth:prinin:366 is not listed on IDEAS
    3. Daniel Aaronson & Bhashkar Mazumder, 2011. "The Impact of Rosenwald Schools on Black Achievement," Journal of Political Economy, University of Chicago Press, vol. 119(5), pages 821-888.
    4. Gigliotti, Philip & Sorensen, Lucy C., 2018. "Educational resources and student achievement: Evidence from the Save Harmless provision in New York State," Economics of Education Review, Elsevier, vol. 66(C), pages 167-182.
    5. Joshua Hyman, 2017. "Does Money Matter in the Long Run? Effects of School Spending on Educational Attainment," American Economic Journal: Economic Policy, American Economic Association, vol. 9(4), pages 256-280, November.
    6. John Deke, "undated". "A Study of the Impact of Public School Spending on Postsecondary Educational Attainment Using Statewide School District Refinancing in Kansas," Mathematica Policy Research Reports ba99bfadd4a34310ba27c46c3, Mathematica Policy Research.
    7. David Card & Alan B. Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 31-50, Fall.
    8. Matthew P. Steinberg & Rand Quinn & Daniel Kreisman & J. Cameron Anglum, 2016. "Did Pennsylvania’s Statewide School Finance Reform Increase Education Spending or Provide Tax Relief?," National Tax Journal, National Tax Association;National Tax Journal, vol. 69(3), pages 545-582, September.
    9. Chakrabarti, Rajashri & Roy, Joydeep, 2015. "Housing markets and residential segregation: Impacts of the Michigan school finance reform on inter- and intra-district sorting," Journal of Public Economics, Elsevier, vol. 122(C), pages 110-132.
    10. Daniel Kreisman, 2017. "The Next Needed Thing: The Impact of the Jeanes Fund on Black Schooling in the South, 1900–1930," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 573-620.
    11. Caroline M. Hoxby, 2001. "All School Finance Equalizations are Not Created Equal," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1189-1231.
    12. Dan D. Goldhaber & Dominic J. Brewer, 1997. "Why Don't Schools and Teachers Seem to Matter? Assessing the Impact of Unobservables on Educational Productivity," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 505-523.
    13. Joydeep Roy, 2011. "Impact of School Finance Reform on Resource Equalization and Academic Performance: Evidence from Michigan," Education Finance and Policy, MIT Press, vol. 6(2), pages 137-167, April.
    14. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-1177, September.
    15. David Card & Alan Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Working Papers 745, Princeton University, Department of Economics, Industrial Relations Section..
    16. Card, David & Payne, A. Abigail, 2002. "School finance reform, the distribution of school spending, and the distribution of student test scores," Journal of Public Economics, Elsevier, vol. 83(1), pages 49-82, January.
    17. Chaudhary, Latika, 2009. "Education inputs, student performance and school finance reform in Michigan," Economics of Education Review, Elsevier, vol. 28(1), pages 90-98, February.
    18. repec:mpr:mprres:7221 is not listed on IDEAS
    19. Deke, John, 2003. "A study of the impact of public school spending on postsecondary educational attainment using statewide school district refinancing in Kansas," Economics of Education Review, Elsevier, vol. 22(3), pages 275-284, June.
    20. C. Kirabo Jackson, 2018. "Does School Spending Matter? The New Literature on an Old Question," NBER Working Papers 25368, National Bureau of Economic Research, Inc.
    21. Eric A. Hanushek, 2003. "The Failure of Input-Based Schooling Policies," Economic Journal, Royal Economic Society, vol. 113(485), pages 64-98, February.
    22. Rajashri Chakrabarti & Joydeep Roy, 2017. "Effect of constraints on Tiebout competition: evidence from a school finance reform," Regional Studies, Taylor & Francis Journals, vol. 51(5), pages 765-785, May.
    23. Julien Lafortune & Jesse Rothstein & Diane Whitmore Schanzenbach, 2018. "School Finance Reform and the Distribution of Student Achievement," American Economic Journal: Applied Economics, American Economic Association, vol. 10(2), pages 1-26, April.
    24. Papke, Leslie E., 2005. "The effects of spending on test pass rates: evidence from Michigan," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 821-839, June.
    25. Andrews, Matthew & Duncombe, William & Yinger, John, 2002. "Revisiting economies of size in American education: are we any closer to a consensus?," Economics of Education Review, Elsevier, vol. 21(3), pages 245-262, June.
    26. Melissa A. Clark, "undated". "Education Reform, Redistribution, and Student Achievement: Evidence from the Kentucky Education Reform Act," Mathematica Policy Research Reports 80c79eb4bd384723b5e7da0c9, Mathematica Policy Research.
    27. C. Kirabo Jackson & Rucker C. Johnson & Claudia Persico, 2016. "The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 157-218.
    28. 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.
    29. Jonathan Guryan, 2001. "Does Money Matter? Regression-Discontinuity Estimates from Education Finance Reform in Massachusetts," NBER Working Papers 8269, National Bureau of Economic Research, Inc.
    30. repec:mpr:mprres:3557 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. María Orduz, 2022. "Effect of educational spending on academic performance under different institutional arrangements," Documentos CEDE 20224, Universidad de los Andes, Facultad de Economía, CEDE.
    2. Acton, Riley & Orr, Cody & Rogers, Salem, 2023. "Returns to School Spending in Rural America: Evidence from Wisconsin's Sparsity Aid Program," IZA Discussion Papers 15915, Institute of Labor Economics (IZA).
    3. Danielle V. Handel & Eric A. Hanushek, 2024. "Contexts of Convenience: Generalizing from Published Evaluations of School Finance Policies," Evaluation Review, , vol. 48(3), pages 461-494, June.
    4. Brunner, Eric & Hoen, Ben & Hyman, Joshua, 2022. "School district revenue shocks, resource allocations, and student achievement: Evidence from the universe of U.S. wind energy installations," Journal of Public Economics, Elsevier, vol. 206(C).
    5. Thurston Domina & Deven Carlson & James Carter & Matthew Lenard & Andrew McEachin & Rachel Perera, 2021. "The Kids on the Bus: The Academic Consequences of Diversity‐Driven School Reassignments," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(4), pages 1197-1229, September.
    6. Vinopal, Katie & Morrissey, Taryn W., 2020. "Neighborhood disadvantage and children’s cognitive skill trajectories," Children and Youth Services Review, Elsevier, vol. 116(C).
    7. Dadon-Golan, Zehorit & BenDavid-Hadar, Iris & Klein, Joseph, 2019. "Revisiting educational (in)equity: Measuring educational Gini coefficients for Israeli high schools during the years 2001–2011," International Journal of Educational Development, Elsevier, vol. 70(C), pages 1-1.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Brunner & Joshua Hyman & Andrew Ju, 2020. "School Finance Reforms, Teachers' Unions, and the Allocation of School Resources," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 473-489, July.
    2. Sungoh Kwon, 2017. "Does Public School Spending Raise Intergenerational Mobility?: Evidence from U.S. School Finance Reforms," Working papers 2017-06, University of Connecticut, Department of Economics.
    3. Bo Zhao, 2023. "Estimating the cost function of connecticut public K–12 education: implications for inequity and inadequacy in school spending," Education Economics, Taylor & Francis Journals, vol. 31(4), pages 439-470, July.
    4. Ding, Yanqing & Lu, Fengming & Ye, Xiaoyang, 2020. "Intergovernmental transfer under heterogeneous accountabilities: The effects of the 2006 Chinese Education Finance Reform," Economics of Education Review, Elsevier, vol. 77(C).
    5. María Orduz, 2022. "Effect of educational spending on academic performance under different institutional arrangements," Documentos CEDE 20224, Universidad de los Andes, Facultad de Economía, CEDE.
    6. Gigliotti, Philip & Sorensen, Lucy C., 2018. "Educational resources and student achievement: Evidence from the Save Harmless provision in New York State," Economics of Education Review, Elsevier, vol. 66(C), pages 167-182.
    7. C. Kirabo Jackson, 2018. "Does School Spending Matter? The New Literature on an Old Question," NBER Working Papers 25368, National Bureau of Economic Research, Inc.
    8. Joshua Hyman, 2017. "Does Money Matter in the Long Run? Effects of School Spending on Educational Attainment," American Economic Journal: Economic Policy, American Economic Association, vol. 9(4), pages 256-280, November.
    9. Cécile Bonneau, 2020. "The Concentration of investment in education in the US (1970-2018)," Working Papers halshs-02875965, HAL.
    10. Cécile Bonneau, 2020. "The Concentration of investment in education in the US (1970-2018)," World Inequality Lab Working Papers halshs-02875965, HAL.
    11. Bass, Brittany, 2021. "The effect of technology funding on school-level student proficiency," Economics of Education Review, Elsevier, vol. 84(C).
    12. Chaudhary, Latika, 2009. "Education inputs, student performance and school finance reform in Michigan," Economics of Education Review, Elsevier, vol. 28(1), pages 90-98, February.
    13. Cordis, Adriana S. & Muzatko, Steven, 2021. "Higher education spending and CPA exam performance," Journal of Accounting Education, Elsevier, vol. 55(C).
    14. Enami, Ali & Alm, James & Aranda, Rodrigo, 2021. "Labor versus capital in the provision of public services: Estimating the marginal products of inputs in the production of student outcomes✰," Economics of Education Review, Elsevier, vol. 83(C).
    15. Josh B. McGee, 2023. "Yes, money matters, but the details can make all the difference," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(4), pages 1125-1132, September.
    16. C. Kirabo Jackson & Rucker C. Johnson & Claudia Persico, 2016. "The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 157-218.
    17. Michael D. Bates & Leslie E. Papke & Jeffrey M. Wooldridge, 2024. "Non linear correlated random effects models with endogeneity and unbalanced panels," Econometric Reviews, Taylor & Francis Journals, vol. 43(9), pages 713-732, October.
    18. Davis, Matthew & Ferreira, Fernando, 2022. "Housing disease and public school finances," Economics of Education Review, Elsevier, vol. 88(C).
    19. Michah W. Rothbart, 2020. "Does School Finance Reform Reduce the Race Gap in School Funding?," Education Finance and Policy, MIT Press, vol. 15(4), pages 675-707, Fall.
    20. Danielle V. Handel & Eric A. Hanushek, 2024. "Contexts of Convenience: Generalizing from Published Evaluations of School Finance Policies," Evaluation Review, , vol. 48(3), pages 461-494, June.

    More about this item

    Keywords

    School finance; Foundation funding; Rural schools; Texas; Sparsity adjustment;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:176:y:2019:i:c:p:118-141. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505578 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.