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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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  1. 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.
  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. 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.
  4. Gilles Duranton & Laurent Gobillon & Henry G. Overman, 2006. "Assessing the effects of local taxation using microgeographic data," LSE Research Online Documents on Economics 19840, London School of Economics and Political Science, LSE Library.
  5. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation Of Elementary Education," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 577-599, May.
  6. 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.
  7. 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.
  8. Holmlund, Helena & McNally, Sandra & Viarengo, Martina, 2008. "Does Money Matter for Schools?," IZA Discussion Papers 3769, Institute for the Study of Labor (IZA).
  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. 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.
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