The impact of school closures on student achievement - evidence from rural Finland

Over the last two decades, many municipalities in Finland have attempted to cut costs by closing small schools. In particular, rural schools with low enrolment have been the target of these savings. This continuing tendency has raised many concerns about the effect of school closures on students, and remains a controversial issue in public debate. The current study examines 600 students at rural schools, who were displaced in the last years of their primary education due to school closures in 1999-2000. Relative to previous literature looking at school closures influenced by poor performance, in the present study school closures were due to cost savings alone. Additionally, because of the rural setting, the effects of displacement include longer journeys to school and increased school size. To address the non-random displacement of students, the effect of school closures on student grades and high school graduation rates is estimated by comparing the displaced students to control students who are matched based on a number of relevant covariates. I find no adverse effects of school closures on any of the measured outcomes. This implies that negative effects on students' school performance does not have empirical support as an objection to the school closure policies.