To be a little bit more specific, I found that when a school district narrowly passes an operational referendum, it leads to an increase of approximately 8 percent of a standard deviation in the state standardized exam or the WKCE for people from Wisconsin, which is the accountability exam, a kind of No Child Left Behind exam. Smith: What kind of impact did these operational funding increases have on student outcomes?īaron: In short, I find that these increases in expenditures greatly improve student outcomes. The remaining $100 is spent on what are known as support services, so these are either guidance counselors, school psychologists or social workers. I find that roughly $200 of this $300 is spent on the instructional account in the form of either additional teachers and teacher aides or increases in average teacher compensation. This is not a huge increase it is about 3 percent relative to what they were spending the year before the election. To give you a little sense of the magnitude here, when a school district narrowly passes an operational referendum, they increase operational expenditures by roughly $300 per pupil. This can be hiring additional teachers or increasing the average teacher salary. Smith: How big were these operational funding increases after referendums, and what were schools spending that money on?īaron: I find that when a school district narrowly passes one of these operational referendums, most of the money that they spend is on the instructional account, namely teachers. I realized that I could use this to contribute to some of the literature on the causal effects of school funding on outcomes like test scores and graduation rates. And this got me thinking about how just by luck, some school districts are able to spend more money, and other school districts are not able to spend more money. I also went to high school and undergrad in Wisconsin, and I knew from my experience living there that there were these elections that school districts hold any time they want to spend more money. All else equal, I would expect that more school funding would impact outcomes. In my mind, it was a no-brainer that this was mainly due to funding. And so when we moved to the United States when I was 15, my brother and I were able to access an incredible public school, with really nice facilities, incredible teachers, and guidance counselors. Where I grew up, public schools were very poorly funded. One of the reasons I was shocked was that I’m originally from Mexico. Jason Baron: I became very interested in this question when I started reading and was shocked at the fact that there was a big debate among economists about the effects of school funding. Tyler Smith: Why did you choose to study school spending in Wisconsin? What made it a good test case for your question?
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