Subject-Specific School Investment and Educational Outcomes: Evidence from the National Defense Education Act of 1958

• In Event: Educational Investments in STEM Preparation and Postsecondary Success

Abstract

Title III of the National Defense Education Act of 1958 was an early large-scale federal investment in U.S. K–12 education, funding instructional equipment, materials, and classroom remodeling specifically for science, mathematics, and modern foreign language instruction. Enacted in the wake of Sputnik, the program sought to expand the nation’s capacity in strategically important subjects. Despite its historical prominence and clear relevance to current policy efforts that use targeted school investments to encourage entry into high-priority fields, there is little causal evidence on whether subject-specific K–12 spending changes students’ long-run educational trajectories.

This paper estimates the effect of Title III funding on college attainment, field of study, and later labor market outcomes. We digitize historical data on state Title III allotments, projects, costs, and rooms remodeled by subject and grade level, and link these records to individual-level outcomes from the 2009–2023 American Community Survey and the decennial Census. Our primary outcomes are college completion and college degree fields aligned with the policy’s targets: math, science, and foreign language.

Our identification strategy exploits features of the law’s state funding formula. Title III distributed funds based on each state’s school-age population and a funding weight tied to state income per child: lower-income states were generally assigned a larger weight and therefore received more funding per school-age child. But the law also limited how redistributive the formula could be by imposing both a maximum and a minimum funding weight. As a result, the poorest states received less than a purely income-based formula would have implied, while the richest states received more. These statutory limits created two sharp changes in how funding varied with state income among otherwise similar states. We use a regression kink design that combines information from both of these policy-induced kinks, and we extend it to an event-study framework using birth-cohort variation in exposure to the policy. Cohorts already too old to be in school when Title III began serve as a placebo group, while school-aged cohorts were exposed to the policy.

We find that Title III increased college-going overall, but especially increased degree receipt in the three fields targeted by the policy. A $1 increase in allotment per child raises the probability of earning a foreign language degree by 0.4 percentage points, a math degree by 0.3 percentage points, and a science degree by 1.8 percentage points. Combined across these fields, the effect is 2.5 percentage points, a 52 percent increase relative to a baseline of 4.8 percent. The same increase in funding also raises college completion by 6.4 percentage points, or 24 percent. ffects are larger for women and for white students. We find little evidence, however, of corresponding gains in adult wages or the likelihood of holding a STEM occupation. These results provide new causal evidence that targeted investments in subject-specific school resources can meaningfully shape both college-going and the fields in which students specialize, while also suggesting that shifts in educational specialization do not necessarily translate into improved labor market outcomes.

Author

• Michael Briskin, Analysis Group
  Presenting Author