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Rothbart paper on school finance reform and the race gap in school funding published in Edu F&P

Sep 30, 2020

Does School Finance Reform Reduce the Race Gap in School Funding?

Michah W. Rothbart

Education Finance & Policy, September 2020

Michah Rothbart

Michah W. Rothbart

This paper offers new evidence on the impacts of school finance reforms (SFRs) precipitated by school finance litigation, exploring the extent to which the impact of SFR differs by district racial composition. Using difference-in-differences and event study models with a series of district and year (or state-by-year) fixed effects, and a sixteen-year panel of over 10,000 school districts, the author analyses exploit variation in funding across school districts, and timing of school finance court orders across states, to estimate the effect of SFR on the distribution of district funding by racial composition.

Models include relevant control variables available in national data and results are robust to numerous alternative specifications, including estimating impacts on percent changes in resources (in addition to levels), restricting analyses to districts in SFR states, controlling for additional covariates available in only some years and some states, and adding controls for state-specific time trends. In addition, the author estimates changes in New York State to assess whether and to what extent results are sensitive to additional controls for revenue-raising capacity and district costs. Results suggest that SFR can work to alleviate racial funding gaps, though impacts are moderate.