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Does Additional Spending Help Urban Schools? An Evaluation Using Boundary Discontinuities

  • Stephen Gibbons
  • Sandra McNally
  • Martina Viarengo

Improvement of educational attainment in schools in urban, disadvantaged areas is an important priority for policy - particularly in countries like England which have a long tail at the bottom of the educational distribution and where there is much concern about low social mobility. An anomaly in the spatial dimension of school funding policy in England allows us to examine the effect of increasing school expenditure for schools in urban areas. This anomaly arises because an 'area cost adjustment' is made in how central government allocates funds to Local Authorities (school districts) whereas, in reality, teachers are drawn from the same labour market and are paid according to national pay scales. This is one of the features that give rise to neighbouring schools on either side of a Local Authority boundary being allocated very different resources, even if they have very similar characteristics. We find that these funding disparities give rise to sizeable differences in pupil attainment in national tests at the end of primary school. This finding lends adds to the evidence that school resources have an important role to play in improving educational attainment and has direct policy implications for the current 'pupil premium' policy in England.

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Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0090.

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Date of creation: Aug 2011
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Handle: RePEc:cep:sercdp:0090
Contact details of provider: Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

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  1. Gilles Duranton & Laurent Gobillon & Henry G. Overman, 2011. "Assessing the effects of local taxation using microgeographic data," LSE Research Online Documents on Economics 41367, London School of Economics and Political Science, LSE Library.
  2. Stephen Machin & Sandra McNally & Costas Meghir, 2007. "Resources and standards in urban schools," LSE Research Online Documents on Economics 3650, London School of Economics and Political Science, LSE Library.
  3. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," NBER Working Papers 13236, National Bureau of Economic Research, Inc.
  4. Helena Holmlund & Sandra McNally & Martina Viarengo, 2009. "Does Money Matter for Schools?," CEE Discussion Papers 0105, Centre for the Economics of Education, LSE.
  5. Sandra E. Black, 1997. "Do better schools matter? Parental valuation of elementary education," Research Paper 9729, Federal Reserve Bank of New York.
  6. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule To Estimate The Effect Of Class Size On Scholastic Achievement," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 533-575, May.
  7. Steven G. Rivkin & Eric A. Hanushek & John F. Kain, 2005. "Teachers, Schools, and Academic Achievement," Econometrica, Econometric Society, vol. 73(2), pages 417-458, 03.
  8. Jonathan Guryan, 2001. "Does Money Matter? Regression-Discontinuity Estimates from Education Finance Reform in Massachusetts," NBER Working Papers 8269, National Bureau of Economic Research, Inc.
  9. Cushing, Brian J., 1984. "Capitalization of interjurisdictional fiscal differentials: An alternative approach," Journal of Urban Economics, Elsevier, vol. 15(3), pages 317-326, May.
  10. Jo Blanden, 2009. "How Much Can We Learn from International Comparisons of Intergenerational Mobility?," CEE Discussion Papers 0111, Centre for the Economics of Education, LSE.
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