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What Works and For Whom? Effectiveness and Efficiency of School Capital Investments Across The U.S

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  • Biasi, Barbara
  • Lafortune, Julien
  • Schönholzer, David

Abstract

This paper identifies which investments in school facilities help students and are valued by homeowners. Using novel data on school district bonds, test scores, and house prices for 29 U.S. states and a research design that exploits close elections with staggered timing, we show that increased school capital spending raises test scores and house prices on average. However, impacts differ vastly across types of funded projects. Spending on basic infrastructure (such as HVAC) or on the removal of pollutants raises test scores but not house prices; conversely, spending on athletic facilities raises house prices but not test scores. Socio-economically disadvantaged districts benefit more from capital outlays, even conditioning on project type and the existing capital stock. Our estimates suggest that closing the spending gap between high- and low-SES districts and targeting spending towards high-impact projects may close as much as 25% of the observed achievement gap between these districts.

Suggested Citation

  • Biasi, Barbara & Lafortune, Julien & Schönholzer, David, 2024. "What Works and For Whom? Effectiveness and Efficiency of School Capital Investments Across The U.S," CEPR Discussion Papers 18745, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18745
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    Cited by:

    1. is not listed on IDEAS
    2. Gupta, Rahul R. & Rodriguez, Viviana, 2025. "Firms for funding: The effect of Million Dollar Plants on school finances and student achievement," Journal of Urban Economics, Elsevier, vol. 149(C).
    3. Kirill Borusyak & Matan Kolerman-Shemer, 2024. "Regression discontinuity aggregation, with an application to the union effects on inequality," Papers 2501.00428, arXiv.org.
    4. Fraenkel, Rebecca & Krumholz, Sam, 2025. "Property taxation as compensation for local externalities: Evidence from large plants," Journal of Public Economics, Elsevier, vol. 243(C).
    5. Raoul van Maarseveen, 2025. "Location and Educational Signals," ECONtribute Discussion Papers Series 366, University of Bonn and University of Cologne, Germany.
    6. Rosenqvist, Olof & Sauermann, Jan, 2025. "The effects of increasing compensatory resource allocation on student achievement," Working Paper Series 2025:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • 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
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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