Do Enhanced Funding Policies Targeting Students in Poverty Close Achievement Gaps? Evidence from the American States, 1996–2015

Abstract

Public concern stemming from the wide disparities in academic achievement based on student poverty status extends back at least to the issuing of the Coleman Report in 1966. The Coleman Report found large and persistent achievement gaps between economic and racial subgroups, yet, perhaps surprisingly, did not find large gaps in funding. The achievement gaps identified in the Coleman Report persist today. Since the NCES began tracking poverty gaps with the National Assessment of Education Progress (NAEP) in the 1990s, the disparities in achievement based on poverty have been large and statistically significant. In response, many states began enacting school funding mechanisms to direct additional resources to high‐poverty schools. Currently, 41 states have employed funding enhancements for poor students (EdBuild, 2018). Are these mechanisms effective at reducing the disparity in achievement for poor versus non‐poor students? Using data from the Urban Institute (2017), we find that states that have directed additional resources towards poor students effectively reduced the disparity between poor and non‐poor students in NAEP fourth‐ and eighth‐grade math and reading exams. Whereas the results are large and statistically significant, the costs associated with fully eliminating the disparity between poor and non‐poor students are very high.