New Study: In Education Money Matters, Helps Poor Districts, Raises Achievement


Jesse Rothstein of the University of California at Berkeley and the National Bureau of Economic Research and his colleagues have just posted a working paper on the importance of statewide school finance reform.  Infusions of state money, whether as the result of court decisions or legislative action, significantly improve the finances of the poorest school districts and, over time, raise test scores.

From the study’s abstract: “Using an event study design, we find that reform events—court orders and legislative reforms—lead to sharp, immediate, and sustained increases in absolute and relative spending in low-income school districts. Using representative samples 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…”

Rothstein and his colleagues explain: “American public schools have traditionally been locally managed and financed largely out of local property tax revenue.  As jurisdictions vary widely…

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