Working Paper

The Roles of State Aid and Local Conditions in Elementary School Test-Score Gaps


Abstract: Equal educational opportunity is a core American value. Yet many children of low-income or minority racial or ethnic status attend public schools that are lower quality compared with those that white children or high-income children attend. And data indicate that, on average, low-income or minority children score lower on states’ elementary-school accountability tests compared with higher-income children or white children. Such test-score gaps serve as evidence of unequal educational opportunity. This study uses information from metropolitan areas and from school districts to understand which factors are strongly related to the size of racial and socioeconomic test-score gaps. One key factor is the degree to which state aid to school districts is distributed progressively—that is, distributed disproportionately to districts with high fractions of students living in poverty—with progressive distributions associated with smaller test-score gaps in high-poverty metros or districts. Second, test-score gaps are larger in metropolitan areas and districts where poverty segregation is greater, that is, where, compared with white children or higher-income children, minority children or low-income children go to school with, or are in school districts with, more students from low-income families.

Keywords: inequality of opportunity; student test-score gaps; state aid to public schools; socioeconomic segregaton; racial segregation;

JEL Classification: H75; H77; I22; I24; I28;

https://doi.org/10.29412/res.wp.2021.02

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Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Working Papers

Publication Date: 2020-11-01

Number: 21-2