Kirabo Jackson Finds Increased School Spending Helps Poor Kids

Kirabo Jackson Finds Increased School Spending Helps Poor Kids

Kirabo Jackson

New research by SESP associate professor Kirabo Jackson shows that increases in K-12 school spending lead to better outcomes for children living in poverty. His exhaustive research investigated four decades’ worth of data on the impact of court-mandated changes in school finance.

In school districts that substantially increased spending because of court mandates, low-income children were significantly more likely to graduate from high school, earn adequate wages and avoid poverty in adulthood.

School spending increases helped to close the gap in college outcomes between poor schools and rich schools. On average, low-income children exposed to a 20 percent spending increase for their school careers completed nearly a full year of additional education after high school.

Spending increases also had a long-term impact on low-income students’ earnings as adults. A 20 percent increase in school spending led to 25 percent higher earnings and a 20 percentage-point reduction in the incidence of adult poverty.

While school spending increases did not affect children above the poverty line, they did boost both the education levels and the adult earnings of economically disadvantaged children.

“Many have questioned whether increased school spending can really help improve the educational and lifetime outcomes of children from disadvantaged backgrounds. Our findings show that they can,” Jackson and his fellow authors note. 

“Improved access to school resources can profoundly shape the life outcomes of economically disadvantaged children, and thereby significantly reduce the intergenerational transmission of poverty,” adds Jackson, an economist. 

Jackson’s paper also analyzes the most effective designs for K-12 school funding formulas to narrow spending gaps between rich and poor districts while also increasing average spending levels overall.

U.S. public education relies heavily on the local property tax base for school funding. Courts and legislators have played an important role in school finance reform, and Jackson’s analysis documents the long-term effects. He finds, for example, that “adequacy-based” school finance reforms, in contrast to equity-based reforms, are more effective at not only reducing spending gaps but also increasing spending in all districts.

Jackson, a fellow at the National Bureau of Economic Research, conducts research on critical education topics to advise policymakers on education policy. His paper on “The Effect of School Finance Reforms on the Distribution of Spending, Academic Achievement and Adult Outcomes” is available through NBER, co-authored with Rucker Johnson and Claudia Persico of Northwestern University.

By Marilyn Sherman
Last Modified: 2/4/16