Federal Pandemic Relief and Academic Recovery

We measure the effect of district use of federal pandemic relief during the 2022-23 school year for a sample of more than 5000 districts in 29 states. We rely on several plausibly exogenous sources of variation in federal grants: differences in state Title I funding formulas, estimation error in Census local area poverty rates and differences in eligibility for federal Title I and subsidized lunch eligibility. We find that each $1000 in spending per student was associated with a .0086 SD improvement in math and a .0049 SD improvement in reading. Both are consistent with a recent meta-analysis of spending impacts by Jackson and Mackevicius (2023). As a placebo test, we find no relationship between federal dollars that were not yet spent during the 2022-23 year. We also find similar results using synthetic control group methods to compare high-poverty districts with high and low amounts of federal aid, but with similar trends in achievement through 2022. Because the federal aid was targeted at higher poverty districts, we find the federal dollars not only contributed to the recovery, but also helped narrow the gaps in achievement which had widened during the pandemic.