Does it Pay to Get an A? School Resource Allocations in Response to Accountability Ratings

Abstract

We examine whether public school districts and individual schools respond to accountability ratings by reallocating resources. Using data from Texas, we utilize three identification strategies - a regression discontinuity for schools on the rating boundaries, a “rating shock” analysis for schools that face a change in rating during the transition to a new accountability system, and a school fixed effects strategy. We find that under the early accountability system districts provided financial rewards for higher ratings. Spending increased for both instruction and ancillary expenditures. Under the later system, districts abandoned incentives and appeared to provide assistance to lower performing schools.

Keywords: education, accountability, school finance

JEL Classification: I22, I21, H72