The effect of increased funding on student achievement: Evidence from Texas's small district adjustment

摘要

We leverage an obscure set of rules in Texas's school funding formula granting some districts additional revenue as a function of size and sparsity. We use variation from kinks and discontinuities in this formula to ask how districts spend additional discretionary funds, and whether these improve student outcomes. A $1000 annual increase in foundation funding, or 10% increase in expenditures, yields a 0.1 s.d. increase in reading scores and a near 0.08 increase in math. In addition dropout rates decline, graduation rates marginally increase, as does college enrollment and to a smaller degree graduation. These gains accrue in later grades and largely among poorer districts. An analysis of budget allocations reveals that additional funding only marginally affects budget shares. (C) 2019 Published by Elsevier B.V.