Do Relative or Absolute Spending Levels Matter More? Progressive Funding Allocations and Low-Income Student Achievement

How do progressive school funding systems affect academic achievement in low-income school districts?

Progressive state school funding systems are intended to enable low-income school districts to gain a relative funding advantage over higher-income school districts. Recent studies have shown that increases in spending levels associated with state school finance policy reforms are associated with improved student achievement in low-income districts. These studies have not addressed whether these districts have seen improvements because absolute spending levels increased or because funding level disparities between districts decreased. Favero will contribute to this literature by determining whether and to what extent a district’s relative funding advantage over another district may drive improved educational outcomes for students. Favero theorizes that in cases where local districts compete over key educational resources (such as personnel), spending levels in neighboring districts will affect a district’s purchasing power. Thus, the study will also examine whether higher spending levels in one district have negative spillover effects on the academic outcomes in neighboring school districts. Favero’s analyses will also ask how disparities in academic outcomes by socioeconomic status have been affected when states have more progressive funding systems and allow for awarding additional funds to poorer districts. He will pursue questions about school finance, neighboring districts, and student achievement by analyzing district-level standardized exam result data from the Foundation-supported Stanford Education Data Archive and data from the National Center for Education Statistics Common Core of Data (i.e., district-level revenue amounts, sources, and spending levels). To determine how changes in school funding systems have affected socioeconomic disparities in academic achievement, Favero will analyze data from the Foundation-supported School Funding Fairness Data System, which includes measures of the progressivity of the state’s school funding system and achievement gaps by socioeconomic status. Findings from this study have the potential to provide policymakers with a nuanced understanding of the effects of different school finance reforms on low-income populations.