School Spending and Student Outcomes: Evidence from Revenue Limit Elections in Wisconsin

47 Pages Posted: 6 Aug 2019

See all articles by E. Jason Baron

E. Jason Baron

Florida State University - Department of Economics

Date Written: August 1, 2019

Abstract

This study provides new evidence on the relationship between school spending and student outcomes by exploiting quasi-experimental variation in Wisconsin's school finance. State-imposed revenue limits cap the total amount of revenue that a school district in Wisconsin can raise for operating expenses. If a district wishes to exceed this cap, it must hold a local referendum. I leverage close elections in a dynamic regression discontinuity framework and find that school districts that narrowly pass a referendum spend roughly 5% more per pupil. These spending increases result in a 25% reduction in the dropout rate, an increase in test scores of approximately 30% of a standard deviation, and a 15% increase in postsecondary enrollment. Exploring plausible mechanisms, the study provides evidence of improvements in measured school inputs including teacher salaries, teacher experience, and student-staff ratios.

Keywords: School Spending, Student Outcomes, Regression Discontinuity

JEL Classification: H0, H41, H75, I20, I22, I24, I28, J24

Suggested Citation

Baron, E. Jason, School Spending and Student Outcomes: Evidence from Revenue Limit Elections in Wisconsin (August 1, 2019). Available at SSRN: https://ssrn.com/abstract=3430766 or http://dx.doi.org/10.2139/ssrn.3430766

E. Jason Baron (Contact Author)

Florida State University - Department of Economics ( email )

Tallahassee, FL 30306-2180
United States
9207132992 (Phone)

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