Making the Grade: The Economic Evolution of American School Districts

Abstract

School districts have more influence on home buyers’ choices than any other local-government unit, yet hardly anyone knows why they exist. “Making the Grade” explains the development of American school districts and advances an economic argument for their continued existence. In the nineteenth century, almost all districts governed a single, one-room school, which provided an “ungraded” education. There was no annual progress from one grade to another. Students instead worked their way through textbooks with others who shared the same level of knowledge but not necessarily the same age. This method was desirable because it allowed for part-time education in an era when most children worked on farms. By the twentieth century, age-graded education, which had annual promotions and a standard curriculum, became the national norm because it smoothed the road to high school. The ungraded method of one-room schools became obsolete. By 1970, 200,000 one-room schools had consolidated into fewer than 20,000 districts. This book argues, contrary to received wisdom, that school-district consolidations were the product of local voters’ consent rather than the political power of education leaders. Rural residents voluntarily gave up their beloved one-room schools because their children were deterred from attending high school and because potential buyers of their property were put off by nonstandard schools. Districts that were not “making the grade” were penalized in the real estate market. The continued concern by twenty-first century homeowners about local school quality remains a positive force in American education. Voters support local education not just because it enhances their property values, but because local schools are the most effective source of “social capital” for their communities.

Keywords: school districts, education policy, one-room schools, self-ordering system

JEL Classification: I20, N3, H7