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Finance

Anna Maier, Julia Daniel, Jeannie Oakes, Livia Lam.

This report synthesizes the research evidence about the impact of community schools on student and school outcomes. Its aim is to support and inform school, community, district, and state leaders as they consider, propose, or implement community schools as a strategy for providing equitable, high-quality education to all young people. We conclude that well-implemented community schools lead to improvement in student and school outcomes and contribute to meeting the educational needs of low-achieving students in high-poverty schools, and sufficient research exists to meet the Every Student Succeeds Act (ESSA) standard for an evidence-based intervention.

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Beth Meloy, Madelyn Gardner, Linda Darling-Hammond.

Research showing that high-quality preschool benefits children’s early learning and later life outcomes has led to increased state engagement in public preschool. However, mixed results from evaluations of two programs—Tennessee’s Voluntary Pre-K program and Head Start—have left many policymakers unsure about how to ensure productive investments. This report presents the most rigorous evidence on the effects of preschool and clarifies how the findings from Tennessee and Head Start relate to the larger body of research showing that high-quality preschool enhances children’s school readiness by supporting substantial early learning gains in comparison to children who do not experience preschool and can have lasting impacts far into children’s later years of school and life. Therefore, the issue is not whether preschool “works,” but how to design and implement programs that ensure public preschool investments consistently deliver on their promise.

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Marjorie Wechsler, David Kirp, Titilayo Tinubu Ali, Madelyn Gardner, Anna Maier, Hanna Melnick, Patrick M. Shields.

Although there is considerable research on the elements of high-quality preschool and its many benefits, particularly for low-income children and English learners, little information is available to policymakers about how to convert their visions of good early education into on-the-ground reality. This study fills that gap by describing and analyzing how four states—Michigan, West Virginia, Washington, and North Carolina—have built high-quality early education systems. Among the common elements of their success are strategies that prioritize quality and continuous improvement, invest in training and coaching for program staff, coordinate the administration of birth-through-grade-3 programs, strategically combine multiple funding sources to increase access and improve quality, and create broad-based coalitions and support.

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Robert M. Costrell.

It has long been argued that cash balance (CB) pension plans offer a more equitable distribution of benefits than traditional final-average-salary (FAS) plans for teachers, particularly between short-termers and career teachers.   However, it has also been understood that the impetus for reform would come from fiscal distress, rather than a concern for equity.  In this paper I examine how the nation’s first CB plan for teachers, in Kansas, adopted under such conditions, has played out for system costs, and the level and distribution of individual benefits, compared to the FAS plan it replaced.  My key findings are:  (1) employer-funded benefits were modestly reduced, despite the surface appearance of somewhat generous employer matches; (2) more importantly, the cost of the pension guarantee, which is off-the-books under standard actuarial accounting, was reduced quite substantially.  Thus, although much of the distributional benefit originally put forth did materialize, the primary gain for states considering reform may well be the reduction in the cost of risk-bearing.  Indeed, I argue that these results are intrinsically linked:  it is CB’s near-elimination of back-loading that simultaneously cuts the implicit cost of risk. 

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Corey A. DeAngelis.

I compare per pupil revenues, expenditures, and performance levels in public charter schools to district-run public schools in Texas for the 2017-18 school year. After controlling for several school and student characteristics, I find that public charter schools are funded around $1,700 (15 percent) less, and spend around $3,700 (28 percent) less, per pupil than district-run public schools. Public charter schools demonstrate cost-effectiveness advantages between 8 and 42 percent, depending on the model employed, over district-run public schools in Texas. I also find evidence to suggest per pupil spending is positively related to state testing outcomes for public charter schools, but not for district-run public schools.

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Carlos X. Lastra-Anadón, Paul E. Peterson.

Tiebout theorizes that local public services are provided more efficiently if costs are paid out of local revenues rather than by inter-governmental grants. But if local politics is not as pluralistic as Dahl has argued, citizens of higher socio-economic status will exercise greater influence, resulting in higher inequalities in service provision. We use administrative data to estimate the impacts of local revenue shares on individual performance of a nationally representative sample of over 140,000 U.S. eighth graders in math and reading. Causal effects are estimated with geographic discontinuity models and 2SLS models that use change in housing prices as an instrument. For every 10 percent increase in local revenue share, students perform about 0.05 standard deviations higher. Gains from local funding are less for disadvantaged students. Local financing affords better education for all but widens achievement gaps.

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Christopher A. Candelaria, Kenneth A. Shores.

Use of education finance data is ubiquitous. Yet, because the academic calendar circumscribes two calendar years, researchers have linked the Consumer Price Index to three different dates: the Fall, Spring and academic fiscal years. We demonstrate that linking the CPI to these different academic year results in identifying different trends in U.S. educational spending during the Great Recession. Descriptive inferences should not be sensitive to researcher discretion about merge years. We provide an easy-to-use software package to facilitate implementation of NCES guidelines in the hope that future analyses of education finance data will explicitly and consistently apply inflation adjustments.  

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Kelli A. Bird, Benjamin L. Castleman, Jeffrey T. Denning, Joshua Goodman, Cait Lamberton, Kelly Ochs Rosinger.

Do nudge interventions that have generated positive impacts at a local level maintain efficacy when scaled state or nationwide? What specific mechanisms explain the positive impacts of promising smaller-scale nudges? We investigate, through two randomized controlled trials, the impact of a national and state-level campaign to encourage students to apply for financial aid for college. The campaigns collectively reached over 800,000 students, with multiple treatment arms to investigate different potential mechanisms. We find no impacts on financial aid receipt or college enrollment overall or for any student subgroups. We find no evidence that different approaches to message framing, delivery, or timing, or access to one-on-one advising affected campaign efficacy. We discuss why nudge strategies that work locally may be hard to scale effectively.

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Benjamin L. Castleman, Francis X. Murphy, Richard W. Patterson, William L. Skimmyhorn.

The Post-9/11 GI Bill allows service members to transfer generous education benefits to a dependent. We run a large-scale experiment to test whether active choice framing impacts US Army service members’ decision to transfer benefits.  Individuals who received email messages framing GI Bill use as an active choice between own use and transfer to a family member are more likely to pursue information about the benefit than individuals receiving outreach that does not frame the decision as an active choice.  While we find no overall effect of framing on transfer, active choice increases transfer among service members with graduate degrees.

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Paul T. von Hippel, Chandi Wagner.

Evidence-based policy is the practice of basing policy decisions on rigorous research evidence, such as randomized experiments. But it is unclear how often evidence-based decisions produce more effective policy. We evaluate an evidence-based policy implemented in 1989-93, after the state of Tennessee completed the famous Project STAR randomized experiment, which showed that reducing average class sizes from 23 to 15 could raise test scores by nearly 0.2 standard deviations (SD). After Project STAR, the state launched Project Challenge, which tried to achieve similar score gains by earmarking $5 million to reduce class sizes in the state’s 17 poorest districts.

We evaluate the effects of Project Challenge by applying regression discontinuity and difference in differences analysis to data from district report cards. Our analysis offers no evidence that Project Challenge districts raised test scores, and even raises questions about whether districts reduced class sizes. After Project Challenge, Tennessee’s Basic Education Plan did reduce class sizes, but only by a token amount, from 26 to 25. In this example, it seems that a successful randomized experiment did not lead to successful policy.

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