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School Finance Reform and the Distribution of Student Achievement


  • Lafortune, Julien
  • Rothstein, Jesse
  • Whitmore Schanzenbach, Diane


We study the impact of post-1990 school finance reforms, during the so-called “adequacy” era, on absolute and relative spending and achievement in low-income school districts. Using an event study research design that exploits the apparent randomness of reform timing, we show that reforms lead to sharp, immediate, and sustained increases in spending in low-income school districts. Using representative samples from the National Assessment of Educational Progress, we find that reforms cause increases in the achievement of students in these districts, phasing in gradually over the years following the reform. The implied effect of school resources on educational achievement is large.

Suggested Citation

  • Lafortune, Julien & Rothstein, Jesse & Whitmore Schanzenbach, Diane, 2016. "School Finance Reform and the Distribution of Student Achievement," Institute for Research on Labor and Employment, Working Paper Series qt9kd0h1cv, Institute of Industrial Relations, UC Berkeley.
  • Handle: RePEc:cdl:indrel:qt9kd0h1cv

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    References listed on IDEAS

    1. C. Kirabo Jackson & Rucker C. Johnson & Claudia Persico, 2016. "The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms," The Quarterly Journal of Economics, Oxford University Press, vol. 131(1), pages 157-218.
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    Cited by:

    1. repec:eee:jeborg:v:143:y:2017:i:c:p:58-77 is not listed on IDEAS
    2. Pichler, Stefan & Ziebarth, Nicolas R., 2016. "Labor Market Effects of US Sick Pay Mandates," IZA Discussion Papers 9867, Institute of Labor Economics (IZA).
    3. David J. Deming & Christopher R. Walters, 2017. "The Impact of Price Caps and Spending Cuts on U.S. Postsecondary Attainment," NBER Working Papers 23736, National Bureau of Economic Research, Inc.
    4. Joshua Goodman & Michael Hurwitz & Jisung Park & Jonathan Smith, 2018. "Heat and Learning," NBER Working Papers 24639, National Bureau of Economic Research, Inc.
    5. repec:eee:pubeco:v:168:y:2018:i:c:p:81-93 is not listed on IDEAS
    6. Eric A. Hanushek & Paul E. Peterson & Laura M. Talpey & Ludger Woessmann, 2019. "The Unwavering SES Achievement Gap: Trends in U.S. Student Performance," NBER Working Papers 25648, National Bureau of Economic Research, Inc.
    7. De Groote, Olivier, 2019. "A dynamic model of effort choice in high school," TSE Working Papers 19-1002, Toulouse School of Economics (TSE).
    8. repec:bla:ecinqu:v:57:y:2019:i:2:p:813-831 is not listed on IDEAS
    9. Richard J. Murnane & Sean F. Reardon, 2017. "Long-Term Trends in Private School Enrollments by Family Income," NBER Working Papers 23571, National Bureau of Economic Research, Inc.
    10. repec:tpr:edfpol:v:14:y:2019:i:2:p:298-326 is not listed on IDEAS
    11. Marchand, Joseph & Weber, Jeremy, 2019. "How Local Economic Conditions Affect School Finances, Teacher Quality, and Student Achievement: Evidence from the Texas Shale Boom," Working Papers 2019-7, University of Alberta, Department of Economics.
    12. Brian Jacob & Jesse Rothstein, 2016. "The Measurement of Student Ability in Modern Assessment Systems," Journal of Economic Perspectives, American Economic Association, vol. 30(3), pages 85-108, Summer.
    13. Sungoh Kwon, 2017. "Does Public School Spending Raise Intergenerational Mobility?: Evidence from U.S. School Finance Reforms," Working papers 2017-06, University of Connecticut, Department of Economics.
    14. Wiljan van den Berge, 2019. "Automatic Reaction – What Happens to Workers at Firms that Automate?," CPB Discussion Paper 390, CPB Netherlands Bureau for Economic Policy Analysis.
    15. Eric J. Brunner & Joshua Hyman & Andrew Ju, 2018. "School Finance Reforms, Teachers’ Unions, and the Allocation of School Resources," Working papers 2018-11, University of Connecticut, Department of Economics.

    More about this item


    Social and Behavioral Sciences; School; Finance; Student Achievement;

    JEL classification:

    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid


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