School Finance Reform and the Distribution of Student Achievement
- Jesse Rothstein, Goldman School of Public Policy, University of California, Berkeley
- Julien Lafortune, UC Berkeley
- Diane Whitmore Schanzenbach, Northwestern University
- Goldman School of Public Policy Working Paper (February 2016)
We study the impact of post-1990 school finance reforms, during the so-called “adequacy” era, on gaps in spending and 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 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, consistent with the goal of improving educational opportunity for these students. The implied effect of school resources on educational achievement is large.