Working Paper: NBER ID: w29177
Authors: Jesse Rothstein; Diane Whitmore Schanzenbach
Abstract: Card and Krueger (1992a,b) used labor market outcomes to study the productivity of school spending. Following their lead, we examine effects of post-1990 school finance reforms on students’ educational attainment and labor market outcomes. Lafortune et al. (2018) show that these reforms increased school spending and narrowed spending and achievement gaps between high- and low-income districts. Using a state-by-cohort panel design, we find that reforms increased high school completion and college-going, concentrated among Black students and women, and raised annual earnings. They also increased the return to education, particularly for Black students and men and driven by the return to high school.
Keywords: school finance reforms; educational attainment; labor market outcomes; equity; adequacy
JEL Codes: I21; I24; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| post-1990 school finance reforms (I22) | high school completion (I21) |
| post-1990 school finance reforms (I22) | college attendance (I23) |
| post-1990 school finance reforms (I22) | annual earnings (J31) |
| increased school spending (H52) | high school completion (I21) |
| increased school spending (H52) | college attendance (I23) |
| increased school spending (H52) | annual earnings (J31) |
| increased school spending (H52) | return to education (I26) |
| increased school spending (H52) | greater economic returns per year of education (I26) |