Working Paper 2016-03: Julien Lafortune, Jesse Rothstein, Diane Whitmore Schanzenbach
School-finance-reformDownload full working paper
Julien Lafortune, University of California, Berkeley
Jesse Rothstein, University of California, Berkeley and NBER
Diane Whitmore Schanzenbach, Northwestern University and NBER
We study the impact of post-1990 school finance reforms, during the so-called “adequacy” era, on the distribution of school spending and student achievement between high-income and low-income school districts. Using an event study design, we find that reform events—court orders and legislative reforms—lead to sharp, immediate, and sustained increases in mean school spending and in relative spending in low-income school districts. Using test score data from the National Assessment of Educational Progress, we also find that reforms cause gradual increases in the relative achievement of students in low-income school districts, consistent with the goal of improving educational opportunity for these students. The implied effect of school resources on educational achievement is large.