When Does Money Matter? School Funding and Black-white Inequality of Educational Achievement 2009-2014

• In Event: 3146 - Race, Equity, and Legitimacy in Education Policy and Practice

Abstract

Contradictory evidence about the relationship between school funding and achievement could reflect heterogeneous effects by demographics or funding type. Most states cut school funding during the 2008 recession, yet little research has examined effects of these cuts, particularly on racial inequality of achievement. This study asks: 1) What is the relationship between school funding and Black-White inequality of academic achievement?; and 2) Does this relationship vary by funding type or subject? Drawing on district-level panel data from the Stanford Education Data Archive 2.0, Census Finance Survey, and Common Core of Data, I use two identification strategies. First, I use school district and year fixed effects to estimate the relationship between changes in funding and achievement gaps within the same district from 2009 to 2014. To help address geographic variation, I limit analyses to districts on state borders, where economic and demographic contexts are more similar. Second, I use instrumental variable analyses to estimate the effects of school funding on achievement gaps. Results suggest heterogeneous effects on achievement by funding source and demographics. Revenue from state general funding formulae, which aim to increase equality in most states, reduce Black-White achievement gaps.

Author

• Emily Rauscher, University of Kansas