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School Finance Reforms, Teachers' Unions, and the Allocation of School Resources

Author

Listed:
  • Eric Brunner

    (University of Connecticut)

  • Joshua Hyman

    (Amherst College)

  • Andrew Ju

    (Jacksonville University)

Abstract

School finance reforms caused some of the most dramatic increases in intergovernmental aid from states to local governments in U.S. history. We examine whether teachers' unions affected the fraction of reform-induced state aid that passed through to local spending and the allocation of these funds. Districts with strong teachers' unions increased spending nearly dollar-for-dollar with state aid and spent the funds primarily on teacher compensation. Districts with weak unions used aid primarily for property tax relief and spent remaining funds on hiring new teachers. The greater expenditure increases in strong union districts led to larger increases in student achievement.

Suggested Citation

  • 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.
    • Handle: RePEc:tpr:restat:v:102:y:2020:i:3:p:473-489
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    Cited by:

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    2. 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.
    3. Nicolai T. Borgen & Lars J. Kirkebøen & Andreas Kotsadam & Oddbjørn Raaum, 2022. "Do funds for more teachers improve student outcomes?," Discussion Papers 982, Statistics Norway, Research Department.
    4. Asker, Erdal & Brunner, Eric & Ross, Steve, 2024. "JUE insight: The impact of school spending on civic engagement: Evidence from school finance reforms," Journal of Urban Economics, Elsevier, vol. 143(C).
    5. 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.
    6. Flynn, Patrick & Smith, Tucker, 2022. "Rivers, lakes and revenue streams: The heterogeneous effects of Clean Water Act grants on local spending," Journal of Public Economics, Elsevier, vol. 212(C).
    7. 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.
    8. Erdal Asker & Eric Brunner & Stephen L. Ross, 2022. "The Impact of School Spending on Civic Engagement: Evidence from School Finance Reforms," Working Papers 2022-041, Human Capital and Economic Opportunity Working Group.
    9. Victoria Perez & Joseph A. Benitez & Justin Ross, 2021. "Too small to fail: The role of Medicaid in mitigating pandemic‐related fiscal strain on local governments," Public Budgeting & Finance, Wiley Blackwell, vol. 41(3), pages 74-97, September.
    10. 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).
    11. Micah Y. Baum & Brian Jacob, 2023. "Racial Differences in Parent Response to COVID Schooling Policies," NBER Working Papers 31765, National Bureau of Economic Research, Inc.
    12. Christian Buerger & Seung Hyeong Lee & John D. Singleton, 2021. "Test-Based Accountability and the Effectiveness of School Finance Reforms," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 455-459, May.
    13. Caterina Pavese & Enrico Rubolino, 2024. "Austerity Harmed Student Achievement," The Economic Journal, Royal Economic Society, vol. 134(659), pages 1199-1227.
    14. Alex Combs & Erin Troland, 2023. "The Role of Property Assessment Oversight in School Finance Inequality," Finance and Economics Discussion Series 2023-024, Board of Governors of the Federal Reserve System (U.S.).
    15. 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.
    16. Cook, Jason & Lavertu, Stéphane & Miller, Corbin, 2021. "Rent-Seeking through collective bargaining: Teachers unions and education production☆," Economics of Education Review, Elsevier, vol. 85(C).

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    More about this item

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • I2 - Health, Education, and Welfare - - Education
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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