Promoting student achievement in high school using school funding: evidence from quantile regression discontinuity design

Abstract

Even though there are many quasi-experimental research in recent literature, there is still no consensus on whether an increase in school funding improves student achievement. Leveraging a natural experiment in South Korea, this study exploits the discontinuity in school funding rules to identify the impact of increased funding on the test scores of high-school students in a national assessment exam. The setting provides a useful context to study the effect of school funding because students typically attend largely similar schools that follow a standardized curriculum, thus eliminating the possibility of the results being contaminated by idiosyncratic variation in school-level characteristics. This study reports mean regression discontinuity estimates as well as quantile regression discontinuity estimates using a procedure suggested by Frandsen et al. (J Econom 168:382–395, 2012). The findings reveal that an increase in school funding, which is equal to approximately 300,000 won per student, results in improved exam performance, particularly in mathematics. Contrary to the stated purpose of the program, however, the evidence suggests that students in the middle and top of the ability distribution gained the most from the intervention, rather than students who are at the highest risk of failing.