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Labor versus capital in the provision of public services: Estimating the marginal products of inputs in the production of student outcomes
Abstract
This paper uses data on Ohio school districts to estimate the short and long term impact of different types of school expenditures on student outcomes. Our identification strategy employs a dynamic regression discontinuity design that relies upon the exogenous variation in public school funding created by marginally approved or failed local referenda to fund Ohio schools. We find that additional school expenditures on operating, minor capital, and major capital expenditure categories do not have a statistically significant effect on the student test scores of the average public school. Importantly, however, operating expenditures have a large and statistically significant impact on student performance in higher poverty school districts. We also examine possible channels (e.g., class size, attendance, discipline, and teachers’ compensation) through which each type of expenditure may affect outcomes, and we find that teachers’ compensation is the only channel that is affected by additional operating and minor capital expenditures.
... , e o School Improvement Grant -SIG (subsídios com base em planos de melhoria escolar), focode Carlson e Lavertu (2018). Verificam-se também estudos que se valem de distorções de políticas de financiamento extra, comoGibbons et al. (2018), de alcance nacional, e Kreisman e Steinberg (2019), de uma política estadual do Texas.Ainda sobre dinheiro extra, destaca-se o incremento de recursos decorrente de eleições acirradas (close elections), como abordado porAbott et al. (2020),Enami et al. (2021) eBaron (2022). No caso, o evento exógeno é a aprovação apertada em referendos locais para gastos educacionais adicionais ou aumento de impostos. ...
Este artigo analisou como a literatura tem explorado a relação entre gastos escolares e resultados educacionais, por meio de uma revisão sistemática de 45 documentos oriundos das bases Scopus, Web of Science, ProQuest, SAGE Open, Willey e Scielo, entre 2015 e 2022. Os estudos foram classificados como de design de pesquisa causal e não causal, e analisados com bases nas políticas e intervenções abordadas. As políticas foram categorizadas em auxílio financeiro extra, reformas de financiamento escolar, gastos de capital e mudança na fonte de receitas. Dentro da nova literatura, influenciada pela “revolução da credibilidade”, constata-se um corpo de pesquisas com boa diversidade de aplicações e impactos significativos de gastos em educação sobre resultados educacionais; mas pesquisas majoritariamente para países desenvolvidos. Evidenciam melhorias na performance acadêmica e no progresso educacional, independentemente do tipo de intervenção, especialmente para estudantes em localidades vulneráveis ou com baixo desempenho escolar. Sendo assim, a análise para países em desenvolvimento, como o Brasil, nos quais os níveis educacionais e os gastos por aluno são inferiores podem trazer diferentes resultados e implicações políticas.
The COVID-19 pandemic has intensified the issue of strengthening the financial support of human capital development and enhancing its impact on economic growth. This study aims to assess the impact of financial support of human capital development in terms of public spending on health and education on economic growth. Economic-statistical methods and correlation-regression analysis are used to determine the impact of the share of public spending on health and education in GDP on real GDP, and to assess the characteristics of financial support of human capital development. The study reveals evidence of a link between the level of public funding for human capital development and real GDP. At the same time, for Ukraine and the countries-full members of the Commonwealth of Independent States, in particular Armenia, Azerbaijan, Kazakhstan, Moldova, Belarus, the Kyrgyz Republic, Uzbekistan, and Russia, the results of the study were mixed. In recent years, with the share of public spending on health and education in GDP growing by 1 percentage point, real GDP has grown in 4 and 5 countries, respectively, and decreased in 5 and 4 countries out of 9 studied. The results show that a significant deterrent to strengthening the financial support of human capital development and its impact on economic growth is a significant level of uncertainty in economic processes, which determines the importance of revising the forms and methods of public financing of human capital. Igor Chugunov (Ukraine), Valentyna Makohon (Ukraine), Tatjana Kaneva (Ukraine), Iryna Adamenko (Ukraine)
The COVID-19 pandemic has intensified the issue of strengthening the financial support of human capital development and enhancing its impact on economic growth. This study aims to assess the impact of financial support of human capital development in terms of public spending on health and education on economic growth. Economic-statistical methods and correlation-regression analysis are used to determine the impact of the share of public spending on health and education in GDP on real GDP, and to assess the characteristics of financial support of human capital development. The study reveals evidence of a link between the level of public funding for human capital development and real GDP. At the same time, for Ukraine and the countries-full members of the Commonwealth of Independent States, in particular Armenia, Azerbaijan, Kazakhstan, Moldova, Belarus, the Kyrgyz Republic, Uzbekistan, and Russia, the results of the study were mixed. In recent years, with the share of public spending on health and education in GDP growing by 1 percentage point, real GDP has grown in 4 and 5 countries, respectively, and decreased in 5 and 4 countries out of 9 studied. The results show that a significant deterrent to strengthening the financial support of human capital development and its impact on economic growth is a significant level of uncertainty in economic processes, which determines the importance of revising the forms and methods of public financing of human capital.
The article presents the results of modeling modern tracks of additional education for teachers. Dynamic changes in the educational environment, technologies, students (the digital generation is part of the Russian education system) necessitate the development of additional professional competencies of teachers. The analysis of the problem field of modern education, the structure of which is determined by the subject areas articulated in publications, was carried out using an expert survey of teachers of educational organizations of the Stavropol Territory in September 2021. In total, 117 people of different age categories and work experience in schools, gymnasiums and lyceums took part in the survey. 14 problems identified at the theoretical stage of the study received an expert assessment on a 10-point scale and, based on factor analysis in the SPSS statistical package (version 21), showed the tracks of the development of additional education for teachers. The highlighted models make it possible to design additional educational programs for teachers in accordance with the current and future needs of the professional community. The proposed algorithm of research methods can be used in the study of a wider range of problems and in other subject areas.KeywordsAdditional educationTeachersModelingEducational programs for teachers
We explore how teachers unions affect education production by comparing outcomes between districts allocating new tax revenue amidst collective bargaining negotiations and districts allocating tax revenue well before. Districts facing union pressure increase teacher salaries and benefits, spend down reserves, and experience no student achievement gains. Conversely, districts facing less pressure hire more teachers (instead of increasing compensation) and realize significant student achievement gains. We interpret these results as causal evidence of the negative impact of teacher rent seeking on education production, as the timing of district tax elections relative to collective bargaining appears to be as good as random.
Within the research community, there is a vigorous debate over whether additional educational expenditures will lead to improved performance of schools. Some of the debate is an outgrowth of the lack of causal knowledge of the impacts of expenditures on student outcomes. To help fill this void, we examine the causal impact of capital expenditures on school district proficiency rates in Michigan. For the analysis, we employ a regression discontinuity design where we use the outcomes of bond elections as the forcing variable. Our results provide some evidence that capital expenditures can have positive effects on student proficiency levels.
Since the Coleman report, many have questioned whether public school spending affects student outcomes. The school finance
reforms that began in the early 1970s and accelerated in the 1980s caused dramatic changes to the structure of K–12 education
spending in the US. To study the effect of these school-finance-reform-induced changes in public school spending on long-run
adult outcomes, we link school spending and school finance reform data to detailed, nationally-representative data on children
born between 1955 and 1985 and followed through 2011. We use the timing of the passage of court-mandated reforms, and their
associated type of funding formula change, as exogenous shifters of school spending and we compare the adult outcomes of cohorts
that were differentially exposed to school finance reforms, depending on place and year of birth. Event-study and instrumental
variable models reveal that a 10 percent increase in per-pupil spending each year for all twelve years of public school leads
to 0.31 more completed years of education, about 7 percent higher wages, and a 3.2 percentage-point reduction in the annual
incidence of adult poverty; effects are much more pronounced for children from low-income families. Exogenous spending increases
were associated with notable improvements in measured school inputs, including reductions in student-to-teacher ratios, increases
in teacher salaries, and longer school years.
There has been renewed policy interest in intergenerational social mobility as a route to a fairer society, but in ignoring the sociological evidence this article will argue that the current policy agenda will fail to achieve its goal. Based on an analysis of ‘social congestion’, ‘social exclusion’, and ‘social justice’, it also argues that existing sociological research on education and social mobility needs to be extended. In the early decades of the twenty-first century, the experiences of working-class and middle-class students and families are not defined by intergenerational social mobility, but by social congestion and an opportunity trap.
Previous research has established that people bid more for houses in high-performing school districts. But what specific factors related to school outcomes influence house prices: the parents, the peers, or the school inputs? We study the extent that house values are affected by each of the components of an education production function. Based on 123 school districts and 26,000 house transactions, we find that parental inputs are the primary component of school outcomes that are capitalized into house prices. In the explanation of variations in house prices, variations in parental characteristics are at least seven times more important than similar variations in the influence of peer groups. We find no influence on house prices from variations in school inputs. This result suggests that land values in a particular community will be increased more by attention to zoning laws that influence the mix of renters to homeowners and the type of households entering a community compared to investing in additional public school inputs.
Despite extensive public infrastructure spending, surprisingly little is known about its economic return. In this paper, we
estimate the value of school facility investments using housing markets: standard models of local public goods imply that
school districts should spend up to the point where marginal increases would have zero effect on local housing prices. Our
research design isolates exogenous variation in investments by comparing school districts where referenda on bond issues targeted
to fund capital expenditures passed and failed by narrow margins. We extend this traditional regression discontinuity approach
to identify the dynamic treatment effects of bond authorization on local housing prices, student achievement, and district
composition. Our results indicate that California school districts underinvest in school facilities: passing a referendum
causes immediate, sizable increases in home prices, implying a willingness to pay on the part of marginal homebuyers of 1 of capital spending. These effects do not appear to be driven by changes in the income or racial composition
of homeowners, and the impact on test scores appears to explain only a small portion of the total housing price effect.
This paper reviews and interprets the literature on the effect of school resources on students' eventual earnings and educational attainment. In addition, new evidence is presented on the impact of the great disparity in school resources between black and white students in North and South Carolina that existed in the first half of the 20th century, and the subsequent narrowing of these resource disparities. Following birth cohorts over time, gaps in earnings and educational attainment for blacks and whites in the Carolinas tend to mirror the gaps in school resources.
We use close tax elections to estimate the impact of school district funding increases on operational spending and student outcomes across seven states. Districts with passing levies directed new revenue toward support services and instructor salaries but did not increase teacher staffing levels. These districts eventually realized gains in student achievement and attainment. Our preferred estimates imply that increasing operational spending by $1000 per pupil increased test scores by approximately 0.15 of a standard deviation and graduation rates by approximately 9 percentage points. There is some evidence of diminishing returns, as these effects are driven by districts below the median in spending per pupil. Based on research linking academic outcomes to earnings, we conclude that these spending increases were likely cost-effective.
We study the impact of post- 1990 school finance reforms, during the so- called "adequacy" era, on absolute and relative spending and achievement in low- income school districts. Using an event study research design that exploits the apparent randomness of reform timing, we show that reforms lead to sharp, immediate, and sustained increases in spending in low- income school districts. Using representative samples from the National Assessment of Educational Progress, we find that reforms cause increases in the achievement of students in these districts, phasing in gradually over the years following the reform. The implied effect of school resources on educational achievement is large.
This paper measures the effect of increased primary school spending on students' college enrollment and completion. Using student-level panel administrative data, I exploit variation in the school funding formula imposed by Michigan's 1994 school finance reform, Proposal A. Students exposed to $1,000 (10 percent) more spending were 3 percentage points (7 percent) more likely to enroll in college and 2.3 percentage points (11 percent) more likely to earn a postsecondary degree. The effects were concentrated among districts that were urban and suburban, lower poverty, and higher achieving at baseline. Districts targeted the marginal dollar toward schools serving less-poor populations within the district.
Direct democracy is often touted as a means of reining in the administrative state, but it could also hinder the performance of public organizations. In particular, we argue that bargaining dynamics between voters and government officials can lead to costly administrative disruptions. We explore this issue by estimating the impact of Ohio tax referenda on school district administration using a regression discontinuity approach. The results suggest that administrators in districts where referenda failed sought to insulate core functions from revenue declines. Nonetheless, referendum failure (as opposed to passage) led to lower instructional spending, teacher attrition, and lower student achievement growth. Spending and performance generally rebounded within a few years, however, as districts eventually secured approval for a subsequent tax proposal. These results illustrate how involving citizens in decision-making can entail short-term transaction costs in the form of decreased administrative performance, which in this case may have had lasting achievement effects for students attending school in the wake of a referendum failure.
Direkte Demokratie wird oft als ein Mittel beworben, um den Verwaltungsstaat in seine Schranken zu weisen. Allerdings könnte dabei auch die Leistungsfähigkeit der öffentlichen Verwaltung nachlassen. Wir argumentieren, dass die Verhandlungsdynamiken zwischen Wählern und Verwaltungsbeamten zu kostspieligen Beeinträchtigungen der Leistung der Verwaltung führen können. Dazu untersuchen wir mittels eines Regressions-Diskontinuitäts-Designs den Effekt von Steuerreferenda in Ohio auf die Schulbezirksverwaltung. Die Ergebnisse deuten darauf hin, dass Bezirke, in denen ein Referendum scheiterte, ihre Kernaufgaben gegen Einnahmeeinbußen abgeschirmt haben. Gleichwohl führten gescheiterte Referenda zu weniger Bildungsausgaben, Abwanderung von Lehrern und geringeren Steigerungen bei den Leistungen der Schüler. Die Ausgaben und Leistungen erholten sich jedoch nach ein paar Jahren, als die Schulbezirke die Zustimmung zu einem neuen Steuer-Vorschlag bekamen. Diese Ergebnisse zeigen, dass die Beteiligung von Bürgern kurzfristige Transaktionskosten in Form von verringerter Verwaltungsleistung erzeugen kann, die in diesem Fall einen nachhaltigen Effekt auf die Leistung der Schüler gehabt haben könnte, die nach einem gescheiterten Referendum die Schule besuchen.
Note: Um die Übersetzungen der Zusammenfassungen übersichtlich und einfach verständlich zu gestalten, wurde bei allen personenbezogenen Bezeichnungen immer das generische Maskulinum verwendet, das sowohl Personen des männlichen als auch des weiblichen Geschlechts einschließt.
Translation credit: Alexander Kroll of Florida International University and Johanna Smyth
This paper analyzes Ohio’s capital subsidy program which distributed over $10B for school construction in 231 school districts between 1997 and 2011. Using an instrumental variables estimation, we find the percentage of students meeting test score proficiency thresholds decrease in math and reading in the first couple years after the capital expenditures and then increase in subsequent years. These results are consistent with short-term disruptions in student learning followed by long-term benefits from the capital expenditures. We also consider mechanisms by which capital expenditures affect achievement and find some evidence that changes in capital expenditures are correlated with changes in operating expenditures, suggesting that some of these effects may be attributable to operating expenditures. We find similar effects of these capital investments on the housing market. While in the short-term these construction projects decrease home prices, the housing market does benefit in the long-term from improvements to the capital stock.
I study an ongoing state-subsidized program of rebuilding and renovating Ohio's K-12 public schools and investigate the effect of improved facility quality on student and school district outcomes. The completion of a project increases public school enrollment and district property values. Test scores do not measurably improve upon completion and suffer significant reductions during construction. The implied willingness to pay for a project is lower than total costs but greater than the cost borne by district residents. While the program led to a narrowing in expenditures across district wealth, I find little evidence that it reduced disparities in student outcomes.
Public investments in repairs, modernization, and construction of schools cost billions. However, little is known about the nature of school facility investments, whether it actually changes the physical condition of public schools, and the subsequent causal impacts on student achievement. We study the achievement effects of nearly 1400 capital campaigns initiated and financed by local school districts, comparing districts where school capital bonds were either narrowly approved or defeated by district voters. Overall, we find little evidence that these school capital campaigns improve student achievement. Event-study analysis focused on the students actually affected by large campus renovations also generates very precise zero estimates of achievement effects. Thus, U.S. school capital campaigns financed by local districts – the predominant method through which facility investments are made – may be a limited tool for realizing substantial gains in student achievement or closing achievement gaps.
Numerous theories posit that the fiscal decisions of one jurisdiction influence the fiscal decisions of its neighbors. The main contribution of this paper is to address empirical difficulties in testing for spillovers using a regression discontinuity design on a newly collected dataset. I utilize close elections from this large dataset of local referenda in Ohio to isolate the effect of exogenous increases in taxation and spending of one jurisdiction on neighbors’ fiscal decisions. For all jurisdictional types and referenda revenue sources (bonds, income, property, and sales tax), there is no evidence of spillovers, and relatively small effects can be ruled out.
A universe of education production function studies was assembled in order to utilize meta-analytic methods to assess the direction and magnitude of the relations between a variety of school inputs and student achievement. The 60 primary research studies aggregated data at the level of school districts or smaller units and either controlled for socioeconomic characteristics or were longitudinal in design. The analysis found that a broad range of resources were positively related to student outcomes, with effect sizes large enough to suggest that moderate increases in spending may be associated with significant increases in achievement. The discussion relates the findings of this study with trends in student achievement from the National Assessment of Educational Progress and changes in social capital over the last two decades.
Sociologists consider inequality in educational attainment to be a major cause of inequality between people in their chances of occupying a more advantageous class position. However, there is dispute as to whether educational inequality according to social class background declined during the 20th century. What is not in doubt is the expansion of education in the advanced economies during this time, and several authors have pointed to educational expansion as a mechanism by which inequalities in social mobility chances may be reduced. I measure this effect and compare it with the impact of educational equalization on social mobility in Britain, Sweden and Germany during the 20th century. I find that in all three countries educational expansion promoted greater social mobility.
Research on educational production functions attempts to model the relation between resource inputs and school outcomes such as educational achievement. Over the last decade a series of influential reviews of this literature have suggested that there is no systematic relation between resource inputs and school outcomes when controlling for student characteristics such as socioeconomic status. The inference procedure used in these reviews, vote counting, is known to be problematic. This study is a reanalysis of data from these earlier reviews, using more sophisticated synthesis methods. It shows systematic positive relations between resource inputs and school outcomes. Moreover, analyses of the magnitude of these relations suggest that the median relation (regression coefficient) is large enough to be of practical importance.While this reanalysis suggests that previous data do not support the conclusions that Hanushek and others derived from it, limitations of their data set warrant caution in using it for policy formation.
Beginning in 1997, a series of Ohio Supreme Court decisions ruled that Ohio's school foundation-based funding system was unconstitutional. Despite judicially mandated reform directives, little change was made until recently when Ohio adopted a modified Evidence-Based Model (EBM) into its statutory funding scheme. Ohio's EBM is intended to remedy many of the unconstitutional deficiencies found by the courts. However, due to artificial caps and guarantees on the funding that a district can receive, the EBM has yet to impact school funding in a major way. A review of the EBM, as enacted in Ohio, describes the changes to the system, as well as the shortcomings.
This paper provides new evidence on the effect of school construction projects on home prices, academic achievement, and public school enrollment. Taking advantage of the staggered implementation of a comprehensive school construction project in a poor urban district, we find that, by six years after building occupancy, $10,000 of per-student investment in school construction raised reading scores for elementary and middle school students by 0.027 standard deviations. For a student receiving the average treatment intensity this corresponds to a 0.21 standard deviation increase. School construction also raised home prices and public school enrollment in zoned neighborhoods.
Between 1973 and 1978, the Indonesian government engaged in one of the largest school construction programs on record. Combining differences across regions in the number of schools constructed with differences across cohorts induced by the timing of the program suggests that each primary school constructed per 1,000 children led to an average increase of 0.12 to 0.19 years of education, as well as a 1.5 to 2.7 percent increase in wages. This implies estimates of economic returns to education ranging from 6.8 to 10.6 percent.
Standard sufficient conditions for identification in the regression discontinuity design are continuity of the conditional expectation of counterfactual outcomes in the running variable. These continuity assumptions may not be plausible if agents are able to manipulate the running variable. This paper develops a test of manipulation related to continuity of the running variable density function. The methodology is applied to popular elections to the House of Representatives, where sorting is neither expected nor found, and to roll-call voting in the House, where sorting is both expected and found.
Beyond spending levels: School district revenue uncertainty and student achievement
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