The Effects of School Spending on Educational and Economic Outcomes: Evidence From School Finance Reforms


The Effects of School Spending on Educational and Economic Outcomes: Evidence From School Finance Reforms

Issue/Topic: Finance--Does Money Matter?
Author(s): Jackson, C. Kirabo; Johnson, Rucker C.; Persico, Claudia
Organization(s): Northwestern University & University of California
Publication: National Bureau of Economic Research Working Paper
Published On: 1/1/2015

Background:
School finance reforms of the 1970s and 1980s have raised many questions about their effects on student outcomes. Previous studies have produced conflicting results. This study looks specifically at the impact of court-ordered school finance reforms on long-term, adult outcomes.

Purpose:
To understand whether, how and why school spending affects student outcomes

Findings/Results:
Researchers found that increased per-pupil spending, induced by school finance reforms narrowed adult socioeconomic attainment differences between those raised in low-income and high-income families. They find that money does matter and that better school resources can meaningfully improve the long-term outcomes of recently educated children. Specifically:
Policy Implications/Recommendations:
Full Study: http://www.nber.org/papers/w20847
Research Design:
Quasi-experimental, longitudinal study

Population/Participants/Subjects:
Nationally representative sample of more than 15,000 children born between 1955 and 1985 and followed into adulthood in the Panel Study of Income Dynamics (PSID)

Year data is from:
1955-2010

Setting:
National

Data Collection and Analysis:
Analysis of data from: Panel Study of Income Dynamics (PSID) data; Census of Governments; Individual Government Finances (INDFIN) & CCD School District Finance Survey

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