The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms / C. Kirabo Jackson, Rucker C. Johnson, Claudia Persico.

Format:

Book

Author/Creator:

Jackson, C. Kirabo.

Contributor:

National Bureau of Economic Research.

Johnson, Rucker C.

Persico, Claudia.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20847.

NBER working paper series no. w20847

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Effects of School Spending on Educational and Economic Outcomes

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

Since Coleman (1966), many have questioned whether school spending affects student outcomes. The school finance reforms that began in the early 1970s and accelerated in the 1980s caused some of the most dramatic changes in the structure of K-12 education spending in US history. To study the effect of these school-finance-reform-induced changes in school spending on long-run adult outcomes, we link school spending and school finance reform data to detailed, nationally-representative data on children born between 1955 and 1985 and followed through 2011. We use the timing of the passage of court-mandated reforms, and their associated type of funding formula change, as an exogenous shifter of school spending and we compare the adult outcomes of cohorts that were differentially exposed to school finance reforms, depending on place and year of birth. Event-study and instrumental variable models reveal that a 10 percent increase in per-pupil spending each year for all twelve years of public school leads to 0.27 more completed years of education, 7.25 percent higher wages, and a 3.67 percentage-point reduction in the annual incidence of adult poverty; effects are much more pronounced for children from low-income families. Exogenous spending increases were associated with sizable improvements in measured school quality, including reductions in student-to-teacher ratios, increases in teacher salaries, and longer school years.

Notes:

Print version record

January 2015.