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Does School District Consolidation Cut Costs?

Author

Listed:
  • William Duncombe

    (Center for Policy Research, Maxwell School, Syracuse University)

  • John Yinger

    (Center for Policy Research, Maxwell School, Syracuse University)

Abstract

Consolidation has dramatically reduced the number of school districts in the United States. Using data from rural school districts in New York, this article provides the first direct estimation of consolidation's cost impacts. We find economies of size in operating spending: all else equal, doubling enrollment cuts operating costs per pupil by 61.7 percent for a 300-pupil district and by 49.6 percent for a 1,500-pupil district. Consolidation also involves large adjustment costs, however. These adjustment costs, which are particularly large for capital spending, lower net cost savings to 31.5 percent and 14.4 percent for a 300-pupil and a 1,500-pupil district, respectively. Overall, consolidation makes fiscal sense, particularly for very small districts, but states should avoid subsidizing unwarranted capital projects. © 2007 American Education Finance Association

Suggested Citation

  • William Duncombe & John Yinger, 2007. "Does School District Consolidation Cut Costs?," Education Finance and Policy, MIT Press, vol. 2(4), pages 341-375, September.
    • Handle: RePEc:tpr:edfpol:v:2:y:2007:i:4:p:341-375
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/edfp.2007.2.4.341
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    More about this item

    Keywords

    school district consolidation;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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