Public School Funding, School Quality, and Adult Crime

This paper asks whether improving the quality of public schools can be an effective long-run crime-prevention strategy in the U.S. Specifically, we examine the effect of school quality improvements early in children's lives on the likelihood that they are arrested as adults. We exploit quasi-experimental variation in school quality due to increases in public school funding, leveraging two natural experiments in Michigan and a novel administrative dataset linking the universe of Michigan public school students to adult criminal justice records. The first research design exploits variation in operating expenditures due to Michigan's 1994 school finance reform, Proposal A. The second design exploits variation in capital spending by leveraging close school district capital bond elections in a regression discontinuity framework. In both cases, we find that students exposed to additional funding during elementary school were substantially less likely to be arrested in adulthood. We show that the Marginal Value of Public Funds of improving school quality (via increases in funding) is greater than one, even when considering only the crime-reducing benefits.