School Spending Research Articles

Follow the Money: School Spending from Title I to Adult Earnings

Title I funding has been the largest federal program of K–12 education for the past fifty years, the objective being to eliminate the educational disadvantage associated with poverty. I provide new evidence on the long-term effects of school spending from Title I on children’s educational and adult economic outcomes. To study effects of Title I, I link school district spending and administrative data on Title I funding to nationally representative data on children born between 1950 and 1977 and followed through 2011. Models include controls for birth cohort and school district fixed effects, childhood family–neighborhood characteristics, and other policies. I find that increases in Title I funding are significantly related to increases in educational attainment, high school graduation rates, higher earnings and work hours, reductions in grade repetition, school suspension or expulsion, incarceration, and reductions in the annual incidence of poverty in adulthood; effects on educational outcomes are more pronounced for poor children.

Introduction to Special Issue on the Property Tax and the Financing of K–12 Education

reschovsky@lafollette.wisc.edu The property tax is the mainstay of local K–12 education revenue. Public schools derive over 80 percent of their local own-source revenue from the property tax (Reschovsky 2014). At the same time, nearly half of total property tax dollars collected in the United States is used to finance public elementary and secondary education (U.S. Census Bureau 2013, 2014). This close link between property taxation and school finance is one motivation for this special issue. Another motivation is the state and local fiscal aftermath of the Great Recession. Over the past few years the financing of public elementary and secondary education has become particularly challenging. In real per pupil terms, total revenues devoted to public education fell by 6.2 percent between the 2008–09 and 2011–12 school years.2 Although comprehensive revenue data are not yet available for the most recent years, existing evidence points to a continued decline in financial support for public education. Data from the U.S. Census Bureau’s Quarterly Summary of State and Local Tax Revenue indicate that per capita real local government property tax revenues (for school and non-school purposes) declined by 3 percent between fiscal years 2011 and 2013 (Collins and Langley 2014). And a survey conducted by the Center on Budget and Policy Priorities found that in 33 states, real

On the political economy of educational vouchers

Two significant challenges hamper the analyses of the collective choice of educational vouchers. One is the multi-dimensional choice set arising from the interdependence of the voucher, public education spending, and taxation. Second, even absent a voucher, preferences over public spending are not single-peaked; a middling level of public school spending may be less attractive to a household than either high public school spending or private education coupled with low public spending. We show that Besley and Coate's (1997) representative democracy model provides a viable approach to overcome these hurdles. We provide a complete characterization of equilibria with an endogenous voucher. A voucher is adopted in political equilibrium provided the coefficient of variation of income is sufficiently small. We undertake a parallel quantitative analysis and we find that no voucher arises in equilibrium for the U.S. income distribution, which exhibits too much heterogeneity. For a tighter income distribution, including those in Douglas County, Colorado where a voucher was recently adopted, our model predicts a positive voucher. Public support for a not-too-large voucher arises because the cross subsidy to public school expenditure from those switching to private schools outweighs the subsidy to those who attend private school in the absence of a voucher.

Bayesian estimation of panel data fractional response models with endogeneity: an application to standardized test rates

This paper develops new Bayesian estimation procedures for a nonlinear panel data model with a fractional dependent variable which is bounded between zero and one. Specifically, estimation is outlined for a panel data fractional probit model (PFP) and is presented in both a baseline case which assumes strict exogeneity as well as in a more complex simultaneous equation model which allows for potential endogeneity. We also present a new data augmentation technique which allows us to transform the likelihood function of a binary probit model into one which allows for a fractional response. In contrast to Frequentist estimation of the PFP models, Bayesian methods allow for direct evaluation of the joint likelihood of the fractional response, thereby leading to gains in estimation efficiency. Furthermore, transitioning from the strictly exogenous case to the case of endogeneity only requires slight adjustments and this allows for straightforward model specification tests. Combining data from the Florida Department of Education, National Center of Education Statistics, and the U.S. Census Bureau, the model is applied empirically in order to examine the relationship between school spending and student achievement among Florida elementary schools. The study finds that greater spending has a positive and statistically significant effect on student achievement. Though, this effect is roughly 50 % larger in the model which allows for endogenous spending. Specifically, a $1,000 increase in per-pupil spending is associated with an increase in standardized test pass rates ranging from 6.2 to 10.1 %.

School Finance and Learning: Are We Leveraging State Aid to Get All We Can Out of It?

After spending some twenty-five years working on schoolfinancefortheNewYorkStateEducationDepartment,Ihadtheopportunitytoworkoneducationreform for the State of Nevada. As Deputy Superintendent for Business and Support Services, I oversaw state aid to school districts, information technology, audit services, and child nutrition. I also served as Education Department liaison to the 77th session of the Nevada Legislature. Although my sojourn in Nevada, lasting little more than a year, was brief compared with my work in New York, the experience gave me perspective on how two states were implementing school finance and reform. Recent reforms in both states were driven in large part by the federal Race to the Top competition, but the approaches to reform were quite different. Key features of the education environment in Nevada—basic student services and a strong inclination against raising taxes—worked to keep school spending low, the sixth lowestschoolspendinginthenationat$8,419perpupil. New York State, in contrast, is a large-enrollment, highspending, and high-taxing state. Consequently, spending per pupil on education is among the highest in the nation, at $16,239 per pupil. 1 In 2011, the state reached the breaking point, however, and enacted laws to limit growth into the future for education revenues raised from the property tax and distributed as state aid to school districts.

School Spending in Montgomery County as Compared to Ten Affluent Counties in Connecticut, California, Maryland, New Jersey and New York

This study compares SAT scores and spending per capita for eleven county school systems that have similar demographics. It thus avoids the measurement problems of many education measurement studies that compare different demographics, or apples versus oranges.

Rural–urban differences in parental spending on children's primary education in Malawi

Using Malawian data, this paper answers two interrelated questions: are there rural–urban differences in the factors that influence the probability that a household spends or does not spend on own children's education; and are there rural–urban differences in the factors that affect educational expenditure if a household decides to spend? Computed elasticities indicate that spending on education by rural households is more sensitive to changes in income compared with urban households, suggesting that spending on education in rural areas is a luxury good. In both areas, a mother's employment and education has a larger impact on spending compared with those of a father. Urban households compared with their rural counterparts are more sensitive to the quality of access to primary schools. We find no evidence of gender bias in school spending in urban areas, but rural households exhibit bias in favour of boys.

An extension of the Tiebout hypothesis of voting with one’s feet: the Medicaid magnet hypothesis

This study empirically extends the Tiebout hypothesis of ‘voting with one’s feet’ in two ways. First, it provides updated estimates using net migration data for the period 2000–2008. Second, in addition to investigating variables reflecting public education outlays, property taxation and income taxation, it investigates whether migrants are attracted to states with higher Medicaid benefits per recipient. The latter hypothesis is referred to as the ‘Medicaid magnet hypothesis’. The analysis includes three economic variables, three quality of life variables and three Tiebout-type factors in addition to Medicaid benefits. Results indicate that consumer voters were attracted to states with higher per pupil public school spending, lower property and income tax rates, and that certain consumer-voters may be attracted to states that offer higher levels of Medicaid benefits.

Education Finance Reform, Education Spending, and Student Performance

The disparities in achievement among income and racial-ethnic groups of students have long been a major concern of educational policies. Among several identified factors that help explain the student performance gap, this paper focuses on inequity in funding for education among school districts, which resulted from heavy reliance of school districts’ revenue on local wealth. In 2004, the State of Maryland witnessed a significant change in financing methods for educational services by providing more resources for school districts with larger share of disadvantaged students. This is the first study to examine the effects of Maryland education finance reform on school spending and student performance. The findings show that reform has improved spending equity by providing more aid to school districts with larger share of disadvantaged students, but found little evidence that reform closed the student performance gap. This study holds policy implications for the current debate on reducing gaps of spending and student performance across school districts by using education finance reforms.

Religious decline in the 20th century West: testing alternative explanations

Retrospective questions from recent surveys let us estimate rates of church attendance among children and their parents in ten Western democracies throughout most of the 20th century. We combine these time series with standard sources to test competing theories of religious change. Although our attendance estimates affirm the prevalence of religious decline, our statistical tests offer no support for traditional theories of secularization (which link decline to changes in income, education, industrialization, urbanization, and family life). Nor can we attribute much of the observed decline to growth in the welfare state. But increased school spending by governments does reduce church attendance, and this effect is not the result of greater educational attainment. In shaping the content of schooling, governments may strongly influence long-run religious trends.

Inequity in American Schools: A New Perspective on the Distributional Effects of School Expenditures on Economic Well‐Being

This article explores how inequities in public K‐12 school spending impact the distribution of economic well‐being across American households with public school students in 1989 and 2000. Adapting concepts from the public finance literature, I explore the impact of school spending on the vertical and horizontal equity and its impact relative to other types of public spending on social programs and taxation. Conventionally, vertical equity refers to the size of the income gaps between households. Horizontal equity refers to the ranking of households along the income distribution with any change in ranks producing horizontal inequity. My main findings show that school spending, when converted into a component of income, served to reduce extended‐income inequality through improvements in vertical equity without the discriminatory implications of exacerbating horizontal inequity across households. Additionally, this impact was at least as large as that of spending on other social programs. This finding bolsters standard arguments for equity and progressivity of school finance across students.

Paying for quality? Associations between private school income, performance and use of resources

Education policy in England has explicitly aimed to remodel state schools in the image of independent, private, schools. However, the body of research evidence on the operation of private schools is very small. Critics have frequently argued that, in contrast to state schools, private schools use resources efficiently because their autonomy gives them freedom to make efficient choices in response to market pressures. We investigated the resource allocation decisions of income private schools using data from their financial accounts. We report the associations of private school spending and performance and teacher and non-teacher numbers, teacher salaries and regional earnings. Schools with higher fees had more teachers and non-teachers per pupil, but similar average staff wages to schools with lower income. Yet we found little evidence that achievement was associated with resource use in English private schools. That is, we found no evidence to support the view that financial autonomy enabled flexibility in using resources to promote higher achievement.

Working longer makes students stronger? The effects of ninth grade classroom hours on ninth grade student performance

Background Despite much discussion on the role of education policy on school and student performance, we know little about the effects of school spending at the margin on student cognitive achievement beyond the effects of class size. Purpose The paper examines the effects of annual ninth grade classroom hours in literacy and maths on ninth grade (aged 16) student performance in writing and maths, respectively. Programme description In Denmark, primary school consists of the first to the ninth grades. Before 2003, only few national regulations governed classroom hour administration in public primary schools, resulting in large variations in the number of classroom hours across the country. Thus, following national discussions about improving skill formation in a heterogeneous student body, in July 2003 the Danish Ministry of Education made changes to classroom hour planning that immediately reduced variation in classroom hours across schools. Sample I use a sample of 64% of all ninth grade students (aged 16) in Denmark in 2003–2006, equivalent to 144,739 students and 921 schools (58%) for literacy and 144,618 students and 924 schools (58%) for maths. Using data from administrative records from various registers and through unique personal and institution identifiers, I first link school characteristics to the students and, second, link students to a long list of individual and parental background characteristics. Design and Methods The paper exploits the unique policy-induced variation in classroom hours in a one-year period before and a three-year period after the reform. As Danish municipalities are the local school authorities and as the reform narrowed the gap in classroom hours across them, the municipalities experienced differences in intensity to treatment. Thus I use a school fixed-effects model, where an interaction-term between the continuous treatment – classroom hours – and the year of policy implementation define the effects of classroom hours in literacy and maths on student achievement in writing and maths, respectively. Results On average, the reform changed classroom hours by 2.2–3.3% in literacy and maths, with an impact on student achievement. For literacy I find no significant effects of classroom hours, but for maths I find stronger effects. One additional hour per year increases the maths score by 0.21% of a standard deviation, decreases the probability of obtaining a test score below the mean by 0.01%, and increases the probability of obtaining a test score above the mean by 0.08%. One possible explanation for this difference between subjects is that training in literacy takes place in the home environment more than maths and thus is less sensitive to classroom hour changes. Conclusions The findings are considerably important when placed in the context of debates about intra-school resource allocation. In maths, classroom hours changed on average only by 2.63 annual hours from 2003 to 2004. However, I still find effects of these generally small changes to classroom hours; thus student achievements are sensitive to even small changes in classroom hours.

The Poverty Gap in School Spending Following the Introduction of Title I

Title I of the 1965 Elementary and Secondary Education Act explicitly directed more federal aid for K-12 education to poorer areas for the first time in US history, with a goal of promoting regional convergence in school spending. Using newly collected data, we find some evidence that Title I narrowed the gap in per-pupil school spending between richer and poorer states in the short- to medium-run. However, the program was small relative to then-existing poverty gaps in school spending; even in the absence of crowd-out by local or state governments, the program could have reduced the gap by only 15 percent.

TAX LIMIT REPEAL AND SCHOOL SPENDING

This is the fi rst study to evaluate the effects on school spending of repeal of constitutional property tax levy limits. While several studies report that the imposition of tax limits constrains local government and school district spending, this study fails to reject the null hypotheses that tax limit repeal in New York State induced no signifi cant immediate or gradual impact on the average spending of either all districts subject to tax limits or districts that were spending at their limits. The latter fi nding suggests that these “at limit” districts were not constrained by tax limits, either because the desired spending levels were exactly “at limit,” or because the limits were no longer binding after the districts utilized other non-property tax revenues such as state aid, especially from the supplemental Hurd aid program.

Standard needs of Italian primary schools

The education system in Italy is mainly public and highly centralised concerning both financial and regulatory aspects. However, there are significant disparities in school spending and students’ performance across regions. The aim of the paper is to provide a first attempt for the Italian case to estimating the standard financial requirement based on the demand of service (e.g., the number of students, the type of school) for a sample of 1,000 primary schools for the year 2009/2010. This standard is then compared with the school current endowment to evaluate whether a better allocation of available resources can be obtained. Results suggest that the actual spending is quite far from the estimated standard for all schools; most of them should get a positive correction, receiving more resources to accomplish their tasks. Students’ performance also seems to play a not negligible role in shaping school funding mechanisms mostly introducing incentive schemes.

Local Responses to Federal Grants: Evidence from the Introduction of Title I in the South

We analyze the effects of the introduction of Title I of the 1965 Elementary and Secondary Education Act, a large federal grants program designed to increase poor students' educational services and achievement. We focus on the South, the poorest region of the country. Title I increased school spending by $0.50 on the dollar in the average southern school district and by more in districts with less ability to offset grants through local tax reductions. Title I-induced increases in school budgets appear to have reduced high school dropout rates of whites, but not blacks. (JEL H52, H75, I21, I28, J15)

OS EFEITOS DA POLÍTICA DE FOCALIZAÇÃO NO ENSINO FUNDAMENTAL (FUNDEF) NO FINANCIAMENTO DO ENSINO MÉDIO NO ESTADO DO MARANHÃO NO PERÍODO DE 1996-2006

The text analyzes the Fundef in Maranhão and its effects on High School spending in that State in theperiod of 1996-2006 with a view to discuss the effectiveness of this funding policy that focused onlyon one stage of the basic education. For this, discu1990s, with an emphasis on education funding from Fundef and analyzes the dynamic budgetrevenues of Education Function; participation / contribution of the revenues of Fundef in totalrevenue of Education, resulting the collaboration of the Union for a poor financially state. Thesedata were collected and systematized from General Balance of the State of Maranhão and refer tothe period from 1996 to 2006. It concludes that the conditions that were offeredthe State in the period under analysisteaching.

Books or Guards? Charter School Security Costs

Little is known about the costs charter schools incur to foster security—a vexing phenomenon when one considers policymakers' and parents' seemingly high and growing want for school safety. Using data from the National Center for Education Statistics and Texas, we reveal how much charter schools spend on security, how they put these resources to use, and the extent to which spending differs between charter and traditional public schools. Our findings contribute to a sparse but important literature on how charters allocate resources generally, while also disaggregating an important, yet little understood, component of school spending.

The Effects of Changes in Property Tax Rates and School Spending on Residential and Business Property Value Growth

In this paper, we examine the effects of changes in property tax rates and school spending on residential and business property value growth in southeast Michigan. We use panel data for 152 communities in the five counties surrounding Detroit between the years 1983 and 2002, a period during which state government mandated major changes to school finance. Using the mandated changes to identify causality, we find that: 1) residential property values are more responsive to school spending changes than property tax rate changes; 2) business property values are more responsive to tax rate changes than school spending changes, and 3) business property values are more sensitive to changes in tax rates as compared to residential property. We also examine tax competition effects on property value growth, showing that tax competition plays an important role in property value growth in the southeast Michigan region.