Do school spending cuts matter? evidence from the Great Recession C. Kirabo Jackson, Cora Wigger and Heyu Xiong
By: Jackson, C. Kirabo
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Contributor(s): Wigger, Cora | Xiong, Heyu.
Material type: 
ArticlePublisher: 2021Subject(s): GASTOS EN EDUCACION | REDUCCION | RECESIONES ECONOMICAS | ESTADOS UNIDOS
In:
American Economic Journal : Economic Policy v. 13, n. 2, May 2021, p. 304-335Summary: During the Great Recession, national public school per-pupil spending fell by roughly 7 percent and persisted beyond the recovery. The impact of such large and sustained education funding cuts is not well understood. To examine this, first, we document that the recessionary drop in spending coincided with the end of decades-long national growth in both test scores and college-going. Next, we show that this stalled educational progress was particularly pronounced in states that experienced larger recessionary budget cuts for plausibly exogenous reasons. To isolate budget cuts that were unrelated to (i) other ill-effects of the recession or (ii) endogenous state policies, we use states' historical reliance on state-appropriated funds (which are more sensitive to the business cycle) to fund public schools interacted with the timing of the recession as instruments for reductions in school spending. Cohorts exposed to these spending cuts had lower test scores and lower college-going rates. The spending cuts led to larger test score gaps by income and race.
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| OP 2135/2021/1-1 Unemployment insurance taxes and labor demand | OP 2135/2021/2 American Economic Journal : Economic Policy | OP 2135/2021/2-1 Heterogeneous workers and Federal income taxes in a spatial equilibrium | OP 2135/2021/2-2 Do school spending cuts matter? | OP 2135/2021/2-3 Does the individual mandate affect insurance coverage? | OP 2135/2021/2-4 The macroeconomic effects of income and consumption tax changes | OP 2135/2021/2-5 The costs of corporate tax complexity |
Resumen.
Bibliografía.
During the Great Recession, national public school per-pupil spending fell by roughly 7 percent and persisted beyond the recovery. The impact of such large and sustained education funding cuts is not well understood. To examine this, first, we document that the recessionary drop in spending coincided with the end of decades-long national growth in both test scores and college-going. Next, we show that this stalled educational progress was particularly pronounced in states that experienced larger recessionary budget cuts for plausibly exogenous reasons. To isolate budget cuts that were unrelated to (i) other ill-effects of the recession or (ii) endogenous state policies, we use states' historical reliance on state-appropriated funds (which are more sensitive to the business cycle) to fund public schools interacted with the timing of the recession as instruments for reductions in school spending. Cohorts exposed to these spending cuts had lower test scores and lower college-going rates. The spending cuts led to larger test score gaps by income and race.
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