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Do school budgets matter? The effect of budget referenda on student dropout rates

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  • Kyung-Gon Lee
  • Solomon W. Polachek

Abstract

This paper analyzes how changes in school expenditures affect dropout rates based on data from 466 school districts in New York during the 2003/04 to the 2007/08 school years. Past traditional regression approaches show mixed results in part because school expenditures are likely endogenous, so that one cannot disentangle cause and effect. The regression discontinuity design used in this study isolates exogenous variation in school expenditures per pupil by comparing school districts where budget referenda passed and failed by narrow margins. The results indicate that increases in school expenditures reduce New York State dropout rates.

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  • Kyung-Gon Lee & Solomon W. Polachek, 2018. "Do school budgets matter? The effect of budget referenda on student dropout rates," Education Economics, Taylor & Francis Journals, vol. 26(2), pages 129-144, March.
  • Handle: RePEc:taf:edecon:v:26:y:2018:i:2:p:129-144
    DOI: 10.1080/09645292.2017.1404966
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    Cited by:

    1. Cordis, Adriana S. & Muzatko, Steven, 2021. "Higher education spending and CPA exam performance," Journal of Accounting Education, Elsevier, vol. 55(C).
    2. Dana Ondrušková & Richard Pospíšil, 2021. "Flexible School Budgeting: Funding Reform Of The Regional Schools, Case Of The Czech Republic," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 9(1), pages 69-81, June.
    3. 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.
    4. 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.

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