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Jian Zou
This paper studies how school spending impacts student achievement by exploiting the US interstate branching deregulation as state tax revenue shocks. Leveraging school finance data from universal school districts, our difference-in-differences estimation reveals that deregulation leads to an increase in per-pupil total revenue and expenditure. The rise in revenue is primarily attributed to higher state revenues, while the expenditure increase is more prominent in low-income school districts. Using restricted-use student assessments from the Nation’s Report Card, we find that deregulation results in improved student achievement, with no distributional effects evident across students’ ability, race, or free lunch status. We introduce an instrumental variables approach that accounts for dynamic treatment effects and estimate that a one-thousand-dollar increase in per-pupil spending leads to a 0.035 standard deviation improvement in student achievement.
The debate on the stringency of licensure exams for prospective public school teachers is on-going, including the recent controversial roll-out of the educative Teacher Performance Assessment (edTPA). We leverage the quasi-experimental setting of different adoption timing by states and analyze multiple data sources containing a national sample of prospective teachers and students of new teachers in the US. With extensive controls of concurrent policies, we find that the edTPA reduced prospective teachers in undergraduate programs, less-selective and minority-concentrated universities. Contrary to the policy intention, we do not find evidence that edTPA increased student test scores.