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Do School Budgets Matter? The Effect of Budget Referenda on Student Performance

Author

Listed:
  • Lee, Kyung-Gon

    (Korean Labor Institute)

  • Polachek, Solomon

    (Binghamton University, New York)

Abstract

This paper analyzes how changes in school expenditures affect dropout rates and standardized test scores based on data from 465 school districts in New York during the 2003/04 to the 2008/09 school years. Past traditional regression approaches show inconsistent results of school expenditures because of an endogeneity problem. The regression discontinuity design used in this study isolates exogenous variation in school expenditures per pupil by comparing school districts where budget referenda passed and failed by narrow margins. The results indicate that increases in school expenditures reduce dropout rates but have limited effects on student test scores.

Suggested Citation

  • Lee, Kyung-Gon & Polachek, Solomon, 2014. "Do School Budgets Matter? The Effect of Budget Referenda on Student Performance," IZA Discussion Papers 8056, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8056
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    File URL: https://docs.iza.org/dp8056.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    school dropout rates; school budget referenda; educational expenditures; student performance;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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