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The Effect of Increased Funding on Student Achievement: Evidence From Texas's Small District Adjustment

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 $1,000 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.

Keywords
School finance; Achievement; Foundation funding; Rural schools; Texas; Sparsity adjustment.
Education level
Topics
Document Object Identifier (DOI)
10.26300/8dhq-az28

EdWorkingPaper suggested citation:

Kreisman, Daniel, and Matthew P. Steinberg. (). The Effect of Increased Funding on Student Achievement: Evidence From Texas's Small District Adjustment. (EdWorkingPaper: -58). Retrieved from Annenberg Institute at Brown University: https://doi.org/10.26300/8dhq-az28

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