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School Finance Reform and the Distribution of Student Achievement (WP-16-04)

Julien Lafortune, Jesse Rothstein, and Diane Whitmore Schanzenbach

The authors 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, they 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, they 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.

Julien Lafortune, PhD Candidate in Economics, University of California, Berkeley

Jesse Rothstein, Professor of Public Policy and Economics, University of California, Berkeley

Diane Whitmore Schanzenbach, Associate Professor of Human Development and Social Policy and IPR Fellow, Northwestern University; Director, The Hamilton Project

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