Does Money Still Matter? Attainment and Earnings Effects of Post-1990 School Finance Reforms

48 Pages Posted: 23 Aug 2021 Last revised: 18 Nov 2021

See all articles by Jesse Rothstein

Jesse Rothstein

University of California, Berkeley, The Richard & Rhoda Goldman School of Public Policy; University of California, Berkeley, College of Letters & Science, Department of Economics; National Bureau of Economic Research (NBER)

Diane Whitmore Schanzenbach

Northwestern University

Date Written: August 2021

Abstract

Card and Krueger (1992a,b) used labor market outcomes to study the productivity of school spending. Following their lead, we examine effects of post-1990 school finance reforms on students’ educational attainment and labor market outcomes. Lafortune et al. (2018) show that these reforms increased school spending and narrowed spending and achievement gaps between high- and low-income districts. Using a state-by-cohort panel design, we find that reforms increased high school completion and college-going, concentrated among Black students and women, and raised annual earnings. They also increased the return to education, particularly for Black students and men and driven by the return to high school.

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Suggested Citation

Rothstein, Jesse and Schanzenbach, Diane Whitmore, Does Money Still Matter? Attainment and Earnings Effects of Post-1990 School Finance Reforms (August 2021). Available at SSRN: https://ssrn.com/abstract=3909622 or http://dx.doi.org/10.2139/ssrn.3909622

Jesse Rothstein (Contact Author)

University of California, Berkeley, The Richard & Rhoda Goldman School of Public Policy ( email )

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University of California, Berkeley, College of Letters & Science, Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Diane Whitmore Schanzenbach

Northwestern University

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