School Finance

Education finance encompasses questions of equity, efficiency and effectiveness, accountability, and intergovernmental aid. What are the relationships among funding, policies, teachers, and student outcomes? How equitably are resources distributed to schools within school systems?

Publications

Income Inequality, the Median Voter, and the Support for Public Education (2010)

Sean P. Corcoran and William N. Evans
NBER Working Paper Series No. 16097

Using a panel of U.S. school districts spanning 1970 - 2000, the authors examine the relationship between income inequality and fiscal support for public education. In contrast with recent theoretical and empirical work suggesting a negative relationship between inequality and public spending, they find results consistent with a median voter model, in which inequality that reduces the median voter's tax share induces higher local spending on public education. The authors estimate that 12 to 22 percent of the increase in local school spending over this period is attributable to rising inequality.

 

 Click here to download the full paper

Making Research in Education Finance and Policy Matter Now (2010)

Amy Ellen Schwartz
Presidental Essay
Education Finance and Policy Winter. 5(1): 1-13
Research in education finance and policy has flourished over the past twenty years as No Child Left Behind (NCLB) and a wide range of school reform efforts spurred demand for scientific evidence identifying "what works." Research funding has been generous,buoyed by both favorable economic conditions and the sense that research will provide solutions to persistent problems in American schooling. It has been a good time for education research.
In the end, the key to making education policy research matter is asking questions that matter-about pressing problems that affect large numbers of students in a broad range of circumstances-and providing useful answers and solutions that are feasible, practical, and implementable under realistic circumstances. Why do some students succeed while others do not? What can and what should the public sector do about it? These are the fundamental questions.



Click here to download the full paper

Why Do Some Schools Get More and Others Less? An Examination of School-Level Funding in New York City (2009)

Amy Ellen Schwartz, Ross Rubenstein, and Leanna Stiefel
IESP Working Paper #09-10


In the spring of 2007, the New York City Department of Education announced an ambitious plan to change the way it distributes resources across its more than 1,400 schools. The plan, known as the "Fair Student Funding" initiative, is intended to change funding methods in two ways: first, by allocating money based upon characteristics of the student body that capture differences in the cost of providing appropriate educational services; second, by allocating dollars rather than specific resources, primarily teacher positions, and allowing principals greater discretion in the deployment of those resources. The authors examine the current distribution of resources across schools in New York City and consider what we know about the intradistrict allocation of resources. 

Click here to download the full paper 

Does Title I Funding Improve School and Student Achievement? An Analysis Using New York City Data (2009)

In this paper, the authors examine the impact of Title I on school spending and school performance, using New York City public school data. Based on a regression discontinuity design (RD) with panel data, and including separate analyses for elementary/middle and high schools, the authors estimate local average treatment effects of Title I.

Overall, the results indicate that Title I changes the mix of spending, enabling high schools to significantly increase the amount of money they spend on direct services to students and to improve their pupil-teacher ratios (while reducing experienced teachers). Elementary and middle schools do not increase spending as much, which is consistent with our finding that state compensatory education funds may be supplanting some Title I funding in schools. Since schools just below the Title I cutoff are similar to those just above the cutoff, this finding may be an equitable, albeit unintended result.

Finally, additional Title I spending does not improve the achievement of students and may even reduce school-wide average test scores in elementary and middle schools. These effects for both spending and scores seem to increase with the length of time schools are Title I eligible and to be stronger for ones that are always Title I eligible compared to those that go in and out of eligibility.

 


Click here to download the full paper

Equity and Accountability: The Impact of State Accountability Systems on School Finance (2008)

Ross Rubenstein, Sonali Ballal, Leanna Stiefel, and Amy Ellen Schwartz
Journal of Public Budgeting & Finance, 28 (3): 1-22


Using an 11-year panel data set containing information on revenues, expenditures, and demographics for every school district in the United States, the authors examine the effects of state-adopted school accountability systems on the adequacy and equity of school resources. There is little relationship between state implementation of accountability systems and changes in school finance equity, though there is evidence that states in which courts overturned the school finance system during the decade exhibited significant equity improvements. Additionally, while implementation of accountability per se does not appear linked to changes in resource adequacy, states that implemented strong accountability systems did experience improvements.

 

Click here to download the full paper

From Districts to Schools: The Distribution of Resources Across Schools in Big City Districts (2007)

Ross Rubenstein, Amy Ellen Schwartz, Leanna Stiefel, and Hella Bel Hadj Amor
Economics of Education Review, 26 (2007) 532-545

While the distribution of resources across school districts is well studied, relatively little attention has been paid to how resources are allocated to individual schools inside those districts. This paper explores the determinants of resource allocation across schools in large districts based on factors that reflect differential school costs or factors that may, in practice, be related to the distribution of resources. Using detailed data on school resources and student and school characteristics in New York City, Cleveland and Columbus, Ohio, we find that schools with higher percentages of poor pupils often receive more money and have more teachers per pupil, but the teachers tend to be less educated and less well paid, with a particularly consistent pattern in New York City schools. We conclude with implications for policy and further research.


Click here to download the full paper

Insight from Hindsight: The New Education Finance of the Next Decade (2006)

Leanna Stiefel
Education Finance and Policy, 1(4): 383-395

Insight comes from hindsight. By reviewing enduring problems in education finance and policy, observing what we did right and seeing when we were surprised and why, we can identify research issues that we missed, avoid similar mistakes in the future, and move forward toward work that is even more productive and useful in the field of education finance and policy.


Click here to download the full paper

School Finance Court Cases and Disparate Racial Impace: The Contribution of Statistical Analysis in New York (2005)

Leanna Stiefel, Amy Ellen Schwartz, Robert Berne and Colin C. Chellman
Education and Urban Society, 37(2): 151-173


Although analyses of state school finance systems rarely focus on the distribution of funds to students of different races, the advent of racial discrimination as an issue in school finance court cases may change that situation. In this article, we describe the background, analyses, and results of plaintiffs' testimony regarding racial discrimination in Campaign for Fiscal Equity Inc. v. State of New York. Plaintiffs employed multiple regression and public finance literature to show that NewYork State's school finance system had a disparate racial impact onNewYork City students. We review the legal basis for disparate racial impact claims, with particular emphasis on the role of quantitative statistical work, and then describe the model we developed and estimated for the court case. Finally,we discuss the defendants'rebuttal, the Court's decision, and conclude with observations about the role of analysis in judicial decision making in school finance.

Click here to download the full paper

Uncommon Schools, Uncommon Results: A Fiscal Analysis of Spending in New York State Schools Closing Racial Test Score Gaps (2005)

Colin C. Chellman, Meryle G. Weinstein, Leanna Stiefel, and Amy Ellen Schwartz
Presented at the Annual Conference of the Association for Budgeting and Financial Management Washington, DC, November 9-13

Do schools that have been successful at reducing test score gaps between white students and students of color allocate resources differently than unsuccessful schools? This paper aims to answer that question, as there is little work at the school level correlating education expenditures to student outcomes. This analysis benefits from three features of expenditure data available in one New York State school district. The first is that these data are available at the school level, not the district level as is often the case. Second, not only overall levels of spending per pupil are available (i.e., total spending per pupil and total instructional spending per pupil), but also functional areas of spending disaggregated to such line items as professional development, classroom paraprofessionals, and principal compensation. Third, the spending data allow us to analyze expenditures on these line items not only for all students but also for two types of students: full-time special education and general education.



Click here to download the full paper

What's Happened to the Price of College? Quality-Adjusted Net Price Indexes for Four-Year Colleges (2004)

Amy Ellen Schwartz and Benjamin Scafidi
Journal of Human Resources, XXXIX(3):723-745


n this paper the authors estimate hedonic models of the (consumer) price of college to construct quality-adjusted net price indexes for U.S. four-year colleges, where the net price of college is defined as tuition and fees minus financial aid. For academic years 1990-91 to 1994-95, the authors find adjusting for financial aid leads to a 22 percent decline in the estimated price index for all four-year colleges, while quality adjusting the results leads to a further, albeit smaller, decline. Nevertheless, public comprehensive colleges, perhaps an important gateway to college for students from low-income backrounds, experienced the largesg net price increases.

 

 Click here to download the full paper

Using Census Data to Allocate Title I Funds to Schools: A Feasibility Study Using Data from the New York City Public School System (2004)

Meryle G. Weinstein, Thomas B. Saunders, Dorothy Siegel
Institute for Education and Social Policy

To allocate Title I funds to its schools, a school district first needs to determine individual student eligibility for Title I services through some measure of individual student poverty. After determining student eligibility, the district aggregates the number of eligible students in each school. To be eligible for Title I funds, schools must have at least the number of eligible students needed to pass a threshold. Schools that do not meet that threshold receive no Title I funds.

Many districts, including the New York City Department of Education (NYCDOE), currently use free lunch eligibility forms as an indicator of individual student poverty.An alternative method that has been proposed would use U.S. Census data and student residential and demographic data already collected by the district as the basis for determining a student's eligibility for Title I funds. This approach involves mapping home addresses for all public school students in New York City and matching these addresses to Census measures of poverty at the block group level. This paper reports the efforts of NYU's Institute for Education and Social Policy to develop such a Census-based approach. The authors conducted analyses using both median household income by race/ethnicity at the block group level and the ratio of income in 1999 to poverty level of families at the tract level.

 

Click here to download the full paper

Intradistrict Equity of Public Education Resources and Performance (2003)

Patrice Iatarola and Leanna Stiefel
Economics of Education Review, 22(2003) :69-78

This paper presents empirical evidence on input and output equity of expenditures, teacher resources, and performance across 840 elementary and middle schools in New York City. Historically, researchers have studied interdistrict distributions, but given the large numbers of pupils and schools within many urban districts, it is important to learn about intradistrict distributions as well. The empirical work is built on a framework of horizontal, vertical, and equal opportunity equity. The results show that the horizontal equity distributions are more disparate than what would be expected relative to results of other studies, vertical equity is lacking, especially in elementary schools, and equality of opportunity is at best neutral but more often absent. Middle schools exhibit more equity than elementary schools. The paper is one of the first to measure output equity, using levels and changes in test scores to do so.


Click here to download the full paper

New York State Education Finance Research Consortium, EFRC

Leanna Stiefel and Amy Ellen Schwartz

A multi-university collaboration with the New York State Education Department to commission and carry out applied research that will help the State’s Regents Commissioner, Legislature and Governor devise effective state education policies.

Work in Progress

The Political Economy of Inequity in America’s Public Schools

Sean Corcoran and Howard Rosenthal, New York University, and Thomas Romer, Princeton University


An interdisciplinary research program on the politics and economics of school finance in the U.S., funded by the Spencer Foundation. In this project we will assemble a comprehensive panel database for the education finance systems of the 50 states and their school districts. We aim to collect and synthesize the institutional details of state finance systems over the 1970-2000 period (or at minimum, the years surrounding the four census years of 1970-1980-1990-2000), to combine with demographic, financial and political data on states and school districts. This panel—which would be the first of its kind to be made publicly available to the research community—will aid academic researchers, state policymakers, and school finance experts, analysts and litigants in better understanding the dynamics that produce within- and between-state disparities in school spending.