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The Post-9/11 GI Bill allows service members to transfer generous education benefits to a dependent. We run a large scale experiment that encourages service members to consider the transfer option among a population that includes individuals for whom the transfer benefits are clear and individuals for whom the net-benefits are significantly more ambiguous. We find no impact of a one-time email about benefits transfer among service members for whom we predict considerable ambiguity in the action, but sizeable impacts among service members for whom education benefits transfer is far less ambiguous. Our work contributes to the nascent literature investigating conditions when low-touch nudges at scale may be effective. JEL Classification: D15, D91, H52, I24
Verification is a federally mandated process that requires selected students to further attest that the information reported on their FAFSA is accurate and complete. In this brief, we estimate institutional costs of administrating the FAFSA verification mandate and consider variation in costs by institution type and sector. Using data from 2014, we estimate that compliance costs to institutions in that year totaled nearly $500 million with the burden falling disproportionately on public institutions and community colleges, in particular. Specifically, we estimate that 22% of an average community college’s financial aid office operating budget is devoted to verification procedures, compared to 15% at public four-year institutions. Our analysis is timely, given that rates of FAFSA verification have increased in recent years.
A recent literature provides new evidence that school resources are important for student outcomes. In this paper, we show that school finance reform-induced increases in student performance are driven by those states that had test-based accountability policies in place at the time. By incentivizing school improvement, accountability systems (such as the federal No Child Left Behind act) may raise the efficiency with which additional school funding gets spent. Our empirical approach leverages the timing of school finance reforms to compare funding impacts on student test scores between states that had accountability in place at the time of the reform with states that did not. The results indicate that finance reforms are three times more productive in low-income school districts when also accompanied by test-based accountability. These findings shed new light on the role of accountability incentives in education production and the mechanisms supporting the effectiveness of school resources.
Growing reliance on student loans and repayment difficulties have raised concerns of a student debt crisis in the United States. However, little is known about the effects of student borrowing on human capital and long-run financial well-being. We use variation induced by recent expansions in federal loan limits, together with administrative schooling, earnings, and credit records, to identify the effects of increased student borrowing on credit-constrained students’ educational attainment, earnings, debt, and loan repayment. Increased student loan availability raises student debt and improves degree completion, later-life earnings, and student loan repayment while having no effect on homeownership or other types of debt.
Our goal in this paper, presented at the 2020 Brookings Municipal Finance Conference, is to better understand teacher pension funding dynamics with a focus on sustainability and intergenerational equity. The origin of this paper is our analysis of the funding policy recommended in a highly publicized paper first presented at the 2019 Brookings Municipal Finance Conference (Lenney, Lutz, and Sheiner, 2019a; 2019b). That proposed policy aims to alleviate rising pension payments that crowd-out classroom expenditures and teacher salaries by abandoning the attempt to pay down pension debt. While the problem of crowd-out is real, we show that, with uncertain investment returns, the recommended policy would carry significant risk of pension fund insolvency and a jump in contributions to the pay-go rate, which is much higher than current rates. We close by proposing a policy evaluation framework that better incorporates risk and the intertemporal tradeoffs between current contributions and likely future outcomes. We illustrate throughout with data from the California Teachers Retirement System (CalSTRS).
Valid and reliable measurements of teaching quality facilitate school-level decision-making and policies pertaining to teachers, but conventional classroom observations are costly, prone to rater bias, and hard to implement at scale. Using nearly 1,000 word-to-word transcriptions of 4th- and 5th-grade English language arts classes, we apply novel text-as-data methods to develop automated, objective measures of teaching to complement classroom observations. This approach is free of rater bias and enables the detection of three instructional factors that are well aligned with commonly used observation protocols: classroom management, interactive instruction, and teacher-centered instruction. The teacher-centered instruction factor is a consistent negative predictor of value-added scores, even after controlling for teachers’ average classroom observation scores. The interactive instruction factor predicts positive value-added scores.
Using detailed administrative data for public schools, we document racial and ethnic segregation at the classroom level in North Carolina, a state that has experienced a sharp increase in Hispanic enrollment. We decompose classroom-level segregation in counties into within-school and between-school components. We find that the within-school component accounted for a sizable share of total segregation in middle schools and high schools. Recognizing its importance could temper the praise for school assignment policies that reduce racial disparities between schools but allow large disparities within them. More generally, we observe between the two components a complementary relationship, with one component tending to be large when the other one is small. Comparing the degree of segregation for the state’s two largest racial/ethnic minority groups, we find that White/Hispanic segregation was more severe than White/Black segregation, particularly within schools. Analyzed as separate administrative units, schools with large shares of Black students tended to have more White/Black segregation across classrooms than schools with smaller shares. Finally, we examine enrollment patterns by course and show that school segregation brings with it differences by race and ethnicity in the courses that students take, with White students more likely to be enrolled in advanced classes.
We investigate the male–female gap in principal compensation in state and national data: detailed longitudinal personnel records from the state of Missouri and repeated cross-sections from the nationally representative Schools and Staffing Survey (SASS). In both data sets, we estimate substantively important compensation gaps for school leaders. In Missouri, female principals make approximately $1,400 less annually than their male colleagues with similar characteristics leading the same school in different years. SASS analyses show that women make about $900 less than men nationally, on average. These gaps are only partially explained by sorting, career paths, and other labor supply-side mechanisms, suggesting that gender discrimination contributes to male–female pay differences in school leadership.
States and localities cannot avoid dealing with issues of teacher compensation. Not only is it the largest budget item for most local governments, but it is the place of largest leverage for improving the quality of schools. Fortunately, consistent research evidence directly informs ways to optimize teacher compensation.
This research provides strong motivation for improving teacher compensation. First, it shows that teachers are paid significantly less than they could earn outside of teaching. Second, teacher salaries have been stagnant, largely because personnel budgets have been more directed toward increasing the number of educators and administrators than toward supporting teachers. But simply increasing pay without consideration of teacher effectiveness will not lead to improved student outcomes.
The economic status of both students and the nation as a whole could be dramatically improved with increases in school quality. But with pressures on public budgets—due importantly to the growing costs of public pensions and health benefits—personnel dollars will have to be used more strategically if our students are to compete internationally. Moreover, the nation has a substantial equity problem: achievement gaps have been constant for a half century despite a wide variety of federal, state, and local policies designed to address them.