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Do School Budgets Matter? The Effect of Budget Referenda on Student Performance

Kyung-Gon Lee () and Solomon Polachek
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Kyung-Gon Lee: Korean Labor Institute

No 8056, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyzes how changes in school expenditures affect dropout rates and standardized test scores based on data from 465 school districts in New York during the 2003/04 to the 2008/09 school years. Past traditional regression approaches show inconsistent results of school expenditures because of an endogeneity problem. The regression discontinuity design used in this study isolates exogenous variation in school expenditures per pupil by comparing school districts where budget referenda passed and failed by narrow margins. The results indicate that increases in school expenditures reduce dropout rates but have limited effects on student test scores.

Keywords: school dropout rates; school budget referenda; educational expenditures; student performance (search for similar items in EconPapers)
JEL-codes: I20 I21 I22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-ger and nep-ure
Date: 2014-03
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Published in: Education Economics 2018, 26(2), 129-144.

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