The effect of increased funding on student achievement: Evidence from Texas's small district adjustment

Daniel Kreisman and Matthew P. Steinberg

Journal of Public Economics, 2019, vol. 176, issue C, 118-141

Abstract: We leverage an obscure set of rules in Texas's school funding formula granting some districts additional revenue as a function of size and sparsity. We use variation from kinks and discontinuities in this formula to ask how districts spend additional discretionary funds, and whether these improve student outcomes. A $1000 annual increase in foundation funding, or 10% increase in expenditures, yields a 0.1 s.d. increase in reading scores and a near 0.08 increase in math. In addition dropout rates decline, graduation rates marginally increase, as does college enrollment and to a smaller degree graduation. These gains accrue in later grades and largely among poorer districts. An analysis of budget allocations reveals that additional funding only marginally affects budget shares.

Keywords: School finance; Foundation funding; Rural schools; Texas; Sparsity adjustment (search for similar items in EconPapers)
JEL-codes: H75 I21 I22 I28 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:176:y:2019:i:c:p:118-141

DOI: 10.1016/j.jpubeco.2019.04.003

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