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School Finance Reform, the Distribution of School Spending, and the Distribution of SAT Scores

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Author Info
David Card
A. Abigail Payne

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Abstract

In this paper we study the effects of school finance reforms on the distribution of school spending across richer and poorer districts, and the effects of spending equalization on the distribution of student outcomes across children from different family backgrounds. We use school district data from the 1977 and 1992 Censuses of Governments to measure the correlation between state funding per pupil and median family income in each district. We find that states where the school finance system was declared unconstitutional in the 1980s increased the relative funding of low-income districts. Increases in state funds available to poorer districts led to increases in the relative spending of these districts, and to some equalization in spending across richer and poorer districts. We then use micro samples of SAT scores from this same period to measure the effects of spending inequality on the inequality in test scores between children from different family backgrounds. We find some evidence that the equalization of spending across districts leads to a narrowing of test score outcomes across family background groups.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6766.

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Date of creation: Oct 1998
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Handle: RePEc:nbr:nberwo:6766

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I22 - Health, Education, and Welfare - - Education - - - Educational Finance

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  2. Murray, Sheila E & Evans, William N & Schwab, Robert M, 1998. "Education-Finance Reform and the Distribution of Education Resources," American Economic Review, American Economic Association, vol. 88(4), pages 789-812, September. [Downloadable!] (restricted)
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  12. Behrendt, Amy & Eisenach, Jeffrey & Johnson, William R., 1986. "Selectivity bias and the determinants of SAT scores," Economics of Education Review, Elsevier, vol. 5(4), pages 363-371, August. [Downloadable!] (restricted)
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  16. Fisher, Ronald C., 1982. "Income and grant effects on local expenditure: The flypaper effect and other difficulties," Journal of Urban Economics, Elsevier, vol. 12(3), pages 324-345, November. [Downloadable!] (restricted)
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  1. repec:fth:prinin:451 is not listed on IDEAS
  2. Thomas Downes & David Figlio, 1998. "School Finance Reforms, Tax Limits, and Student Performance: Do Reforms Level-Up or Dumb Down?," Discussion Papers Series, Department of Economics, Tufts University 9805, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  3. Raquel Fernandez & Richard Rogerson, 1999. "Equity and Resources: An Analysis of Education Finance Systems," NBER Working Papers 7111, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Lisa Barrow & Cecilia Elena Rouse, 2002. "Using Market Valuation to Assess Public School Spending," NBER Working Papers 9054, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Irwin Garfinkel & Lee Rainwater & Timothy M. Smeeding, 2004. "Welfare State Expenditures and the Distribution of Child Opportunities," Center for Policy Research Working Papers 63, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
  6. Caroline M. Hoxby, 1998. "All School Finance Equalizations Are Not Created Equal," NBER Working Papers 6792, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Mörk, Eva & Ahlin, Åsa, 2007. "Effects of decentralization on school resources: Sweden 1989-2002," Working Paper Series 2007:9, Uppsala University, Department of Economics. [Downloadable!]
  8. Walter Y. Oi, 1974. "Scientific Manpower Forecasts from the Viewpoint of a Dismal Scientist," Working Papers 427, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  9. repec:fth:prinin:427 is not listed on IDEAS
  10. Martin Browning & Thomas Crossley, . "Unemployment Insurance Benefit Levels and Consumption Changes," Canadian International Labour Network Working Papers 25, McMaster University. [Downloadable!]
    Other versions:
  11. Alan Krueger & Diane Whitmore, 1999. "The Effect of Attending a Small Class in the Early Grades on College-Test Taking and Middle School Test Results: Evidence from Project STAR," Working Papers 806, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  12. Jencks, Christopher & Tach, Laura, 2005. "Would Equal Opportunity Mean More Mobility?," Working Paper Series rwp05-037, Harvard University, John F. Kennedy School of Government. [Downloadable!]
  13. Daniel Berkowitz & Chris Bonneau & Karen Clay, 2006. "Judicial Independence and Minority Interests," Working Papers 286, University of Pittsburgh, Department of Economics, revised Nov 2006. [Downloadable!]
  14. Tim Callan & Tim Smeeding & Panos Tsakloglou, 2007. "Distributional Effects of Public Education Transfers in Seven European Countries," Papers WP207, Economic and Social Research Institute (ESRI). [Downloadable!]
  15. Susan E. Mayer, 2001. "How Economic Segregation Affects Children's Educational Attainment," JCPR Working Papers 235, Northwestern University/University of Chicago Joint Center for Poverty Research.
  16. Tanja Kirjavainen & Iida Häkkinen & Roope Uusitalo, 2000. "School Resources and Student Achievement Revisited: New Evidence Using Panel Data," Discussion Papers 227, Government Institute for Economic Research Finland (VATT). [Downloadable!]
  17. Lisa Barrow & Cecilia Elena Rouse, 2000. "Using Market Valuation to Assess the Importance and Efficiency of Public School Spending," Econometric Society World Congress 2000 Contributed Papers 1446, Econometric Society. [Downloadable!]
    Other versions:
  18. Daniel Aaronson, 1998. "The effect of school finance reform on population heterogeneity," Working Paper Series WP-98-11, Federal Reserve Bank of Chicago. [Downloadable!]
  19. Ahlin, Åsa & Mörk, Eva, 2005. "Effects of decentralization on school resources," Working Paper Series 2005:5, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
    Other versions:
  20. Lisa Sanbonmatsu & Jeffrey R. Kling & Greg J. Duncan & Jeanne Brooks-Gunn, 2006. "Neighborhoods and Academic Achievement: Results from the Moving to Opportunity Experiment," NBER Working Papers 11909, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  21. Jesse Rothstein, 2004. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Effects of Inter-district Competition," NBER Working Papers 10666, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  22. Thomas A. Downes & David N. Figlio, 1999. "Economic inequality and the provision of schooling," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 99-110. [Downloadable!]
  23. Gordon B. Dahl, 2002. "Mobility and the Return to Education: Testing a Roy Model with Multiple Markets," RCER Working Papers 488, University of Rochester - Center for Economic Research (RCER). [Downloadable!]
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