Using Market Valuation to Assess Public School Spending

We compare the adult outcomes of cohorts who were differentially exposed to policy-induced changes in Head Start and K–12 spending, depending on place and year of birth. IV and sibling-difference estimates indicate that, for poor children, these policies both increased educational attainment and earnings, and reduced poverty and incarceration. The benefits of Head Start were larger when followed by access to better-funded schools, and increases in K–12 spending were more efficacious when preceded by Head Start exposure. The findings suggest dynamic complementarities, implying that early educational investments that are sustained may break the cycle of poverty. (JEL H52, H75, I21, I26, I28, I32, I38)

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Reducing Inequality Through Dynamic Complementarity: Evidence from Head Start and Public School Spending

10.3386/w23489 ◽

2017 ◽

Cited By ~ 12

Author(s):

Rucker Johnson ◽

C. Kirabo Jackson

Keyword(s):

Public School ◽

Head Start ◽

School Spending

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The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms *

The Quarterly Journal of Economics ◽

10.1093/qje/qjv036 ◽

2015 ◽

Vol 131 (1) ◽

pp. 157-218 ◽

Cited By ~ 146

Author(s):

C. Kirabo Jackson ◽

Rucker C. Johnson ◽

Claudia Persico

Keyword(s):

Public School ◽

Low Income ◽

School Finance ◽

The United States ◽

Adult Outcomes ◽

Finance Reform ◽

School Finance Reform ◽

Point Reduction ◽

K 12 ◽

School Spending

Abstract Since the Coleman Report, many have questioned whether public school spending affects student outcomes. The school finance reforms that began in the early 1970s and accelerated in the 1980s caused dramatic changes to the structure of K–12 education spending in the United States. To study the effect of these school finance reform–induced changes in public school spending on long-run adult outcomes, we link school spending and school finance reform data to detailed, nationally representative data on children born between 1955 and 1985 and followed through 2011. We use the timing of the passage of court-mandated reforms and their associated type of funding formula change as exogenous shifters of school spending, and we compare the adult outcomes of cohorts that were differentially exposed to school finance reforms, depending on place and year of birth. Event study and instrumental variable models reveal that a 10% increase in per pupil spending each year for all 12 years of public school leads to 0.31 more completed years of education, about 7% higher wages, and a 3.2 percentage point reduction in the annual incidence of adult poverty; effects are much more pronounced for children from low-income families. Exogenous spending increases were associated with notable improvements in measured school inputs, including reductions in student-to-teacher ratios, increases in teacher salaries, and longer school years.

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