The Institute for Education and Social Policy

Kathleen Ziol-Guest, Ariel Kalil, Rebecca M. Ryan, and Anna J. Markowitz 

AERA Open 

Sean Corcoran and Dan Goldhaber

Education Finance and Policy, 8(3): 418-434

In this policy brief the authors argue that there is little debate about the statistical properties of value-added model (VAM) estimates of teacher performance, yet, despite this, there is little consensus about what the evidence about VAMs implies for their practical utility as part of high-stakes performance evaluation systems. A review of the evidence base that underlies the debate over VAM measures, followed by the subjective opinions about the value of using VAMs, illustrates how different policy conclusions can easily arise even given a high-level general agreement about an existing body of evidence. The authors conclude the brief by offering a few thoughts about the limits of our knowledge and what that means for those who do wish to integrate VAMs into their own teacherevaluation strategy. 

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Rajashri Chakrabarti and Elizabeth Setren

Working Paper #03-12

There is a slowly emerging literature that seeks to understand how the Great Recession affected other parts of the economy; however, there is no research that examines the effect of Great Recession (or any other recession) on schools. Given the fundamental role of education in human capital formation and growth, it is essential to understand the effect of recessions on schools. This paper starts to fill this gap. Exploiting detailed data on a multitude of school finance indicators and a trend shift analysis, it examines how the Great Recession affected school funding in NY. While we find no evidence of effects on either total revenue or expenditure, there were important compositional changes to both. There is strong evidence of substitution of funds on the revenue side---the infusion of funds with the federal stimulus occurred simultaneously with statistically and economically significant cuts in state and local financing, especially the former. On the expenditure side, instructional expenditure was maintained, while several non-instruction categories like transportation, student activities and utilities suffered. Important heterogeneities in experiences are also observed by poverty, metro areas, size, and urban status. Affluent districts were hurt the most, while analysis by metro areas reveal that the NYC metropolitan area, and especially Nassau, sustained largest losses. The findings of this study promise to facilitate our understanding of how recessions affect schools and the role policy can play to mitigate the consequences.

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Rajashri Chakrabarti and Sarah Sutherland

Working Paper #02-12

While sparse literature exists investigating the impact of the Great Recession on various sectors of the economy, there is virtually no research that studies the effect of the Great Recession, or past recessions, on schools. This paper starts to fill the void. Studying school funding during the recession is of paramount importance because schools have a fundamental role in fostering human capital formation and economic growth. The authors exploit unique panel data and trend shift analysis to analyze how New Jersey school finances were affected during the Great Recession and the ARRA federal stimulus period. Their results show strong evidence of downward shifts in both revenue and expenditure following the recession. Federal stimulus seemed to have helped in 2010, however both revenue and expenditure still declined. While total revenue declined, the various components of revenue did not witness symmetric changes. The infusion of funds with the federal stimulus occurred simultaneously with statistically and economically significant cuts in state and local financing, especially the former. Their results also show a compositional shift in expenditures in favor of categories that are linked most closely to instruction, while several noninstruction categories including transportation and utilities declined. Interestingly, budgetary stress seems to have led to significant lay-offs for untenured teachers, leading to a rightward shift of the teacher salary and experience distributions. Heterogeneity analysis shows that high poverty and urban districts sustained the largest falls in the post-recession era, with Abbott districts specifically falling the furthest from pre-recession trends. Of importance, the Abbott districts were the only group in our expansive analysis to show statistically significant negative shifts in instructional expenditure even with the federal stimulus. The findings of this paper contribute valuable insight regarding schools’ financial situations during recession and can serve as a guide to aid future policy decisions.

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Amy Ellen Schwartz, Leanna Stiefel and Matthew Wiswall

Working Paper #01-12

The authors evaluate the effectiveness of small high school reform in the country’s largest school district, New York City. Using a rich administrative dataset for multiple cohorts of students and distance between student residence and school to instrument for endogenous school selection, they find substantial heterogeneity in school effects: newly created small schools have positive effects on graduation and some other education outcomes while older small schools do not. Importantly, the authors show that ignoring this source of treatment effect heterogeneity by assuming a common small school effect yields a misleading zero effect of small school attendance.

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Leanna Stiefel, Amy Ellen Schwartz and Anne Rotenberg

Education Finance and Policy, 6 (2): 267-292

In the spring of 2008 the authors surveyed members of the American Education Finance Association (AEFA) to gain insight into their views on education policy issues. The results summarize opinions of this broad group of education researchers and practitioners, providing AEFA members and education leaders with access to views that may be helpful as they consider policies to analyze or pursue. This article reports the results in six areas of current policy interest. How should education aid be distributed? Is school choice a good thing? Does school finance reform work? What has accountability wrought? Can school policies close the blackwhite achievement gap? And how should teachers be compensated? Their findings identify areas of substantial agreement as well as areas where there is disagreement. For example, there is considerable agreement that state and federal governments should provide additional funding for disadvantaged students but disagreement on how to measure school finance adequacy.

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Elizabeth Debraggio, Amy Ellen Schwartz and Leanna Stiefel

IESP Brief No. 01-11 (February)

New York City (NYC) is home to the largest school district in the U.S., with over one million students and more than 1,600 schools. While it is only one of approximately seven hundred school districts in New York State (NYS), the city educates about one-third of the state’s students. In recent work examining school finance during Mayor Bloomberg’s first two terms, Stiefel and Schwartz (2011) compared NYC’s funding sources with those for the rest of the state in entirety. The NYS statistics presented in that chapter were, therefore, averages for all other school districts in the state - including the fiscallystressed “Big Four” (Buffalo, Rochester, Syracuse and Yonkers), rural districts with their own, unique challenges, and relatively wealthy suburban districts. This brief builds upon that research – describing the changes in revenues for the city, other large urban districts, wealthy downstate counties surrounding NYC, and the rest of the state. The extent to which the inclusion or exclusion of these districts influence the amounts received by other districts in state is an interesting question that is beyond the scope of this work. The authors would, of course, welcome additional research on this topic.

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Denison Dwight, William Hartman, Leanna Stiefel and Michele Deegan 

Public Management Review, 35 (1): 29-53

This paper describes a model for assessing and reporting schoollevel resources. State and local decision-makers have been seeking ways to obtain such information for more than a decade, but there is as yet no easy, accessible way to do so and no way to satisfy both internal and external users of the information. The model, based on case studies in Pennsylvania (with successful replication in New York), resolves many of the issues. The seven principles that guide the model are explained, challenges in developing school-level reports are generalized, and resolutions to the challenges in three states are compared. The conclusion draws out implications for the future of regularly collected school resource data.

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Rajashri Chakrabarti and Joydeep Roy

Working Paper #10-01

In this paper, the authors examine the effects of constraints in a Tiebout framework in the context of school finance reforms. They use data from Michigan, which enacted a comprehensive school finance reform in 1994 that in effect ended local discretion over school spending. This scenario affords us a unique opportunity to study the implications of imposing limits on local government’s control of the quality of local public goods. They find that the reform was successful in overturning existing trends towards increased disparities. However, the reform also constrained the highest-spending districts, with negative effects on their subsequent educational outcomes. These results survive several sensitivity checks. Going behind the black box to look at whether the reform affected incentives and responses, the authors find that loss of discretion acted as a strong disincentive to high spending districts, and more generally, across the board. The improvements in performance of the lowest-spending districts were likely caused by relative increases in spending rather than higher effort. Results from an alternative strategy, which exploits differences in the nature of incentives faced by districts located in more competitive areas versus those in less competitive areas, corroborate the same finding.

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Sean P. Corcoran and William N. Evans

NBER Working Paper

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.

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Amy Ellen Schwartz 

Presidental Essay

Education Finance and Policy, 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.

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