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

  • Gibbons, Steve


    (London School of Economics)

  • McNally, Sandra


    (London School of Economics)

  • Viarengo, Martina


    (Graduate Institute of International and Development Studies, Geneva)

Improving the educational attainment of disadvantaged students in urban schools is a priority for policy worldwide, but existing research is equivocal about the effectiveness of additional funding for achieving this objective. This study exploits anomalies in the spatial dimension of school funding policy in England to provide new evidence on this question. An "area cost adjustment" and other aspects of the formula that allocates central grants to Local Authorities (school districts) means that neighbouring schools with similar intakes, operating in the same labour market and facing the same prices for inputs can receive very different incomes. We find that these funding disparities give rise to sizeable differences in pupil attainment in national tests at the end of primary school. This shows that school resources have an important role to play in improving educational attainment. The results have direct implications for the current "Pupil Premium" policy in England.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6281.

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Length: 48 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6281
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References listed on IDEAS
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  1. 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.
  2. Stephen Machin & Sandra McNally & Costas Meghir, 2007. "Resources and Standards in Urban Schools," CEE Discussion Papers 0076, Centre for the Economics of Education, LSE.
  3. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Working Papers 07-27, Center for Economic Studies, U.S. Census Bureau.
  4. Duranton, Gilles & Gobillon, Laurent & Overman, Henry G, 2006. "Assessing the Effects of Local Taxation Using Microgeographic Data," CEPR Discussion Papers 5856, C.E.P.R. Discussion Papers.
  5. Helena Holmlund & Sandra McNally & Martina Viarengo, 2009. "Does Money Matter for Schools?," CEE Discussion Papers 0105, Centre for the Economics of Education, LSE.
  6. Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 1998. "Teachers, Schools, and Academic Achievement," NBER Working Papers 6691, National Bureau of Economic Research, Inc.
  7. repec:oup:qjecon:v:114:y:1999:i:2:p:577-599 is not listed on IDEAS
  8. repec:oup:qjecon:v:114:y:1999:i:2:p:533-575 is not listed on IDEAS
  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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