Relationship Between Virginia's Fiscal Effort and Public School Graduation Rates

Abstract

Prior education finance studies have measured the effect of funding on various student achievement variables. These studies demonstrate the need for resources in education, but this need requires further exploration. Previous literature shows several limitations regarding study length, scope and fiscal resources analyzed. This study further investigates school funding by analyzing the relationship between school funding and high school graduation rates over a nine-year time frame. This research examines what role Virginia's school districts' division fiscal effort (the proportion of its wealth invested in K-12 public education) plays in determining several identified measurable student outcomes from 2003 to 2012. The methodology used within the study includes linear regression, bivariate correlation, time-lagged correlation and a fixed effects least square dummy variable model. Results demonstrate that division fiscal effort and high school graduation rates are not significantly correlated. The results indicate that division fiscal effort alone was not the only predictor of academic success and that other variables like poverty status and minority classification have a greater impact on graduation rate than division fiscal effort.