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

Author

Listed:
  • Gibbons, Stephen

    () (London School of Economics)

  • McNally, Sandra

    () (London School of Economics)

  • Viarengo, Martina

    () (Graduate Institute of International and Development Studies, Geneva)

Abstract

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.

Suggested Citation

  • Gibbons, Stephen & McNally, Sandra & Viarengo, Martina, 2012. "Does Additional Spending Help Urban Schools? An Evaluation Using Boundary Discontinuities," IZA Discussion Papers 6281, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6281
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    References listed on IDEAS

    as
    1. Steven G. Rivkin & Eric A. Hanushek & John F. Kain, 2005. "Teachers, Schools, and Academic Achievement," Econometrica, Econometric Society, vol. 73(2), pages 417-458, March.
    2. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 577-599.
    3. 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.
    4. Gilles Duranton & Laurent Gobillon & Henry G. Overman, 2011. "Assessing the Effects of Local Taxation using Microgeographic Data," Economic Journal, Royal Economic Society, vol. 121(555), pages 1017-1046, September.
    5. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    6. Holmlund, Helena & McNally, Sandra & Viarengo, Martina, 2010. "Does money matter for schools?," Economics of Education Review, Elsevier, vol. 29(6), pages 1154-1164, December.
    7. Patrick J. Bayer & Robert McMillan, 2010. "Choice and Competition in Education Markets," Working Papers 10-47, Duke University, Department of Economics.
    8. Stephen Machin & Sandra McNally & Costas Meghir, 2010. "Resources and Standards in Urban Schools," Journal of Human Capital, University of Chicago Press, vol. 4(4), pages 365-393.
    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.
    11. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule to Estimate the Effect of Class Size on Scholastic Achievement," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 533-575.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Four concerns about schools at the top of the election agenda
      by Sandra McNally, Professor in the School of Economics at University of Surrey in The Conversation on 2015-03-24 11:23:12

    Citations

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    Cited by:

    1. Gibbons, Stephen & Silva, Olmo & Weinhardt, Felix, 2014. "Neighbourhood Turnover and Teenage Attainment," IZA Discussion Papers 8381, Institute for the Study of Labor (IZA).
    2. Stephen Gibbons & Henry G. Overman, 2012. "Mostly Pointless Spatial Econometrics?," Journal of Regional Science, Wiley Blackwell, vol. 52(2), pages 172-191, May.
    3. Ruth Lupton & Polina Obolenskaya, 2013. "Labour's Record on Education: Policy, Spending and Outcomes 1997-2010," CASE - Social Policy in a Cold Climate Working Paper 03, Centre for Analysis of Social Exclusion, LSE.
    4. Gordon L. Clark, 2014. "Roepke Lecture in Economic Geography—Financial Literacy in Context," Economic Geography, Clark University, vol. 90(1), pages 1-23, January.
    5. Gibbons, Steve & Overman, Henry G. & Patacchini, Eleonora, 2015. "Spatial Methods," Handbook of Regional and Urban Economics, Elsevier.
    6. Steve Gibbons & Max Nathan & Henry G. Overman, 2014. "Evaluating Spatial Policies," SERC Policy Papers 012, Spatial Economics Research Centre, LSE.
    7. Eyles, Andrew & Machin, Stephen & McNally, Sandra, 2017. "Unexpected school reform: Academisation of primary schools in England," Journal of Public Economics, Elsevier, vol. 155(C), pages 108-121.
    8. repec:wly:econjl:v:127:y:2017:i:599:p:177-198 is not listed on IDEAS
    9. Nicoletti, Cheti & Rabe, Birgitta, 2012. "The effect of school resources on test scores in England," ISER Working Paper Series 2012-13, Institute for Social and Economic Research.
    10. repec:eco:journ1:2017-05-35 is not listed on IDEAS
    11. Monique De Haan, 2017. "The Effect of Additional Funds for Low‐ability Pupils: A Non‐parametric Bounds Analysis," Economic Journal, Royal Economic Society, vol. 127(599), pages 177-198, February.
    12. Machin, Stephen & Wyness, Gill & McNally, Sandra, 2013. "Education in a devolved Scotland: a quantitative analysis," LSE Research Online Documents on Economics 57971, London School of Economics and Political Science, LSE Library.
    13. Stephen Machin & Sandra McNally, 2012. "The Evaluation of English Education Policies," National Institute Economic Review, National Institute of Economic and Social Research, vol. 219(1), pages 15-25, January.
    14. Stephen Gibbons & Sandra McNally, 2013. "The Effects of Resources Across School Phases: A Summary of Recent Evidence," CEP Discussion Papers dp1226, Centre for Economic Performance, LSE.
    15. repec:cep:spccrr:01 is not listed on IDEAS
    16. Lupton, Ruth & Hills, John & Stewart, Kitty & Vizard, Polly, 2013. "Labour’s social policy record: policy, spending and outcomes 1997-2010," LSE Research Online Documents on Economics 51070, London School of Economics and Political Science, LSE Library.
    17. Deborah A. Cobb-Clark & Nikhil Jha, 2016. "Educational Achievement and the Allocation of School Resources," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 49(3), pages 251-271, September.

    More about this item

    Keywords

    urban schools; education; resources;

    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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