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The effect of increased funding on student achievement: Evidence from Texas's small district adjustment

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  • Kreisman, Daniel
  • Steinberg, Matthew P.

Abstract

We leverage an obscure set of rules in Texas's school funding formula granting some districts additional revenue as a function of size and sparsity. We use variation from kinks and discontinuities in this formula to ask how districts spend additional discretionary funds, and whether these improve student outcomes. A $1000 annual increase in foundation funding, or 10% increase in expenditures, yields a 0.1 s.d. increase in reading scores and a near 0.08 increase in math. In addition dropout rates decline, graduation rates marginally increase, as does college enrollment and to a smaller degree graduation. These gains accrue in later grades and largely among poorer districts. An analysis of budget allocations reveals that additional funding only marginally affects budget shares.

Suggested Citation

  • Kreisman, Daniel & Steinberg, Matthew P., 2019. "The effect of increased funding on student achievement: Evidence from Texas's small district adjustment," Journal of Public Economics, Elsevier, vol. 176(C), pages 118-141.
    • Handle: RePEc:eee:pubeco:v:176:y:2019:i:c:p:118-141
    DOI: 10.1016/j.jpubeco.2019.04.003
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    References listed on IDEAS

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    Cited by:

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    3. Danielle V. Handel & Eric A. Hanushek, 2023. "Contexts of Convenience: Generalizing from Published Evaluations of School Finance Policies," NBER Working Papers 31653, National Bureau of Economic Research, Inc.
    4. 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).
    5. Thurston Domina & Deven Carlson & James Carter & Matthew Lenard & Andrew McEachin & Rachel Perera, 2021. "The Kids on the Bus: The Academic Consequences of Diversity‐Driven School Reassignments," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(4), pages 1197-1229, September.
    6. Vinopal, Katie & Morrissey, Taryn W., 2020. "Neighborhood disadvantage and children’s cognitive skill trajectories," Children and Youth Services Review, Elsevier, vol. 116(C).
    7. Dadon-Golan, Zehorit & BenDavid-Hadar, Iris & Klein, Joseph, 2019. "Revisiting educational (in)equity: Measuring educational Gini coefficients for Israeli high schools during the years 2001–2011," International Journal of Educational Development, Elsevier, vol. 70(C), pages 1-1.

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    More about this item

    Keywords

    School finance; Foundation funding; Rural schools; Texas; Sparsity adjustment;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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