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Impacts of new school facility construction: An analysis of a state-financed capital subsidy program in Ohio

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  • Conlin, Michael
  • Thompson, Paul N.

Abstract

This paper analyzes Ohio’s capital subsidy program which distributed over $10B for school construction in 231 school districts between 1997 and 2011. Using an instrumental variables estimation, we find the percentage of students meeting test score proficiency thresholds decrease in math and reading in the first couple years after the capital expenditures and then increase in subsequent years. These results are consistent with short-term disruptions in student learning followed by long-term benefits from the capital expenditures. We also consider mechanisms by which capital expenditures affect achievement and find some evidence that changes in capital expenditures are correlated with changes in operating expenditures, suggesting that some of these effects may be attributable to operating expenditures. We find similar effects of these capital investments on the housing market. While in the short-term these construction projects decrease home prices, the housing market does benefit in the long-term from improvements to the capital stock.

Suggested Citation

  • Conlin, Michael & Thompson, Paul N., 2017. "Impacts of new school facility construction: An analysis of a state-financed capital subsidy program in Ohio," Economics of Education Review, Elsevier, vol. 59(C), pages 13-28.
    • Handle: RePEc:eee:ecoedu:v:59:y:2017:i:c:p:13-28
    DOI: 10.1016/j.econedurev.2017.05.002
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    2. Belmonte, Alessandro & Bove, Vincenzo & D’Inverno, Giovanna & Modica, Marco, 2020. "School infrastructure spending and educational outcomes: Evidence from the 2012 earthquake in Northern Italy," Economics of Education Review, Elsevier, vol. 75(C).
    3. Brasington, David M., 2018. "Passing school building tax levies may increase teacher salary," Economics Letters, Elsevier, vol. 163(C), pages 87-89.
    4. Biasi, Barbara & Lafortune, Julien & Schönholzer, David, 2024. "What Works and for Whom? Effectiveness and Efficiency of School Capital Investments across the U.S," IZA Discussion Papers 16713, Institute of Labor Economics (IZA).
    5. Thompson, Paul N., 2021. "Is four less than five? Effects of four-day school weeks on student achievement in Oregon," Journal of Public Economics, Elsevier, vol. 193(C).
    6. Michah W. Rothbart & David J. Schwegman & Iuliia Shybalkina, 2022. "The impact of pork‐barrel capital funding in schools: Evidence from participatory budgeting in NYC," Public Budgeting & Finance, Wiley Blackwell, vol. 42(2), pages 148-170, June.
    7. Stephen Gibbons & Claudia Hupkau & Sandra McNally & Henry G. Overman, 2021. "The Effects of College Capital Projects on Student Outcome," CVER Research Papers 035, Centre for Vocational Education Research.
    8. 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).
    9. Asma Benhenda, 2020. "The impact of school facility expenditures on pupil attainment," CEPEO Briefing Note Series 10, UCL Centre for Education Policy and Equalising Opportunities, revised Nov 2020.
    10. Hong Kai, 2017. "School Bond Referendum, Capital Expenditure, and Student Achievement," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(4), pages 1-26, October.
    11. Enami, Ali & Alm, James & Aranda, Rodrigo, 2021. "Labor versus capital in the provision of public services: Estimating the marginal products of inputs in the production of student outcomes✰," Economics of Education Review, Elsevier, vol. 83(C).
    12. Barbara Biasi & Julien Lafortune & David Schönholzer, 2024. "What Works and for Whom? Effectiveness and Efficiency of School Capital Investments across the U.S," CESifo Working Paper Series 10884, CESifo.
    13. Michio Naoi, 2020. "School Quality and Residential Property Values: A Review of Recent Developments and Applications," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 16(6), pages 1-23, September.
    14. C. Kirabo Jackson, 2018. "Does School Spending Matter? The New Literature on an Old Question," NBER Working Papers 25368, National Bureau of Economic Research, Inc.
    15. Hashim, Ayesha K. & Strunk, Katharine O. & Marsh, Julie A., 2018. "The new school advantage? Examining the effects of strategic new school openings on student achievement," Economics of Education Review, Elsevier, vol. 62(C), pages 254-266.

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    More about this item

    Keywords

    School districts; Capital expenditures; Test scores; Housing prices;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I2 - Health, Education, and Welfare - - Education

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