Growing Pains: The School Consolidation Movement and Student Outcomes

Abstract

Between 1930 and 1970, average school size in the United States increased from 87 to 440 students and average district size increased from 170 to 2300 students, as over 120,000 schools and 100,000 districts were eliminated through consolidation. We exploit variation in the timing of consolidation across states to estimate the effects of changing school and district size on student outcomes using data from the Public-Use Micro-Sample of the 1980 US census. Students educated in states with smaller schools obtained higher returns to education and completed more years of schooling. Reduced form estimates confirm that students from states with larger schools earned significantly lower wages later in life. Although larger districts were associated with modestly higher returns to education and increased educational attainment in most specifications, any gains from the consolidation of districts were far outweighed by the harmful effects of larger schools. (JEL I2, H7, H4) The Author 2008. Published by Oxford University Press on behalf of Yale University. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.