Do School Finance Reforms Make Any Difference?

Well… here’s what a number of reasonably strong empirical studies have shown…

•   David Card & A. Abigail Payne, School Finance Reform, The Distribution of School Spending, and the Distribution of Student Test Scores, 83 J. Pub. Econ. 49 (2002)
–    Using micro samples of SAT scores from this same period, we then test whether changes in spending inequality affect the gap in achievement between different family background groups. We find evidence that equalization of spending leads to a narrowing of test score outcomes across family background groups. (p. 49)
•    John Deke, A Study of the Impact of Public School Spending on Postsecondary Educational Attainment Using Statewide School District Financing in Kansas, 22 Econ. Educ. Rev. 275 (2003)
–    In this paper, I use a policy change in Kansas involving statewide school district refinancing to measure the impact of per-pupil spending on the probability that a student will choose to acquire more education. Using panel models that, if biased, are likely biased downward, I have a conservative estimate of the impact of a 20% increase in spending on the probability of going on to postsecondary education. The regression results show that such a spending increase raises that probability by approximately 5%.
•   Thomas Downes (2004) School Finance Reform and School Quality: Lessons from Vermont. In Yinger, J. (ed) Helping Children Left Behind: State Aid and the Pursuit of Educational Equity. Cambridge, MA: MIT Press.
–    All of the evidence cited in this paper supports the conclusion that Act 60 has dramatically reduced dispersion in education spending and has done this by weakening the link between spending and property wealth. Further, the regressions presented in this paper offer some evidence that student performance has become more equal in the post–Act 60 period. And no results support the conclusion that Act 60 has contributed to increased dispersion in performance. (p. 312)
•    Tom Downes, Jeffrey Zabel, Dana Ansel (2009) Incomplete Grade: Massachusetts Education Reform at 15. Boston, MA. MassINC.
–    The achievement gap notwithstanding, thisresearch provides new evidence that the state’s investment has had a clear and significant impact. The achievement gap notwithstanding, this research provides new evidence that the state’s investment has had a clear and significant impact. how education reform has been successful in raising the achievement of students in the previously low-spending districts.4  Quite simply, this comprehensive analysis documents that without Ed Reform the achievement gap would be larger than it is today. (p. 5)
•    Jonathan Guryan (2003) Does Money Matter? Estimates from Education Finance Reform in Massachusetts. Working Paper No. 8269. Cambridge, MA: National Bureau of Economic Research.
–    Using state aid formulas as instruments, I find that increases in per-pupil spending led to significant increases in math, reading, science, and social studies test scores for 4th- and 8th-grade students. The magnitudes imply a $1,000 increase in per-pupil spending leads to about a third to a half of a standard-deviation increase in average test scores. It is noted that the state aid driving the estimates is targeted to under-funded school districts, which may have atypical returns to additional expenditures.
•    Margaret Goertz & Michael Weiss (2008) Assessing Success in School Finance Litigation: The Case of New Jersey
–    State Assessments: The gap between Abbott districts and all other districts was reduced to 12 points by 2005 or 0.40 standard deviation units. The gap between the Abbott districts and the high wealth districts closed from 25 points to 15 points in 2005 (Figure 7). Performance in the low, middle, and high wealth districts essentially remained parallel during this time. (p. 17)
–    NAEP: The NAEP results confirm the changes we saw using state assessment data. NAEP scores in 4th grade reading and mathematics in Central Cities rose 19 and 20 points, respectively between the mid-1990s and 2005, a rate that was faster than either the Urban Fringe or the state as a whole. P. 20)