Search Results
Journal Article
A tale of two states: the recession’s impact on N.Y. and N.J. school finances
Although schools play a crucial role in human capital formation and economic growth, relatively few studies consider the effect of recessions (and in particular the Great Recession) on schools. This article helps fill this gap by comparing and contrasting the effects of the Great Recession on school districts in New York and New Jersey. In fact, it is the first article to compare the impacts of the Great Recession on schools in different states. The authors find that the two states had very different experiences in the two years following the recession. While total school funding in New York ...
Report
Abbott and Bacon Districts: education finances during the Great Recession
In the State of New Jersey, any child between the age of five and eighteen has the constitutional right to a thorough and efficient education. The State of New Jersey also has one of the country?s most rigid policies regarding a balanced budget come fiscal end. When state and local revenues took a big hit in the most recent recession, officials had to make tough decisions about education spending. This paper exploits rich panel data and trend-shift analysis to analyze how school finances in the Abbott and Bacon School Districts, as well as the high-poverty districts in general, were affected ...
Journal Article
Tough Choices: New Jersey Schools during the Great Recession and Beyond
This study examines the medium-term effects of the Great Recession on school finances in New Jersey using detailed school district panel data and an interrupted time series analysis. The authors find that the recession led to sharp cuts in school funding and expenditure, in spite of the federal stimulus. These cuts deepened as the stimulus abated. An analysis of variations by metropolitan area reveals that the Camden metro area, the highest poverty area reviewed, experienced considerably larger cuts in expenditures when the stimulus receded compared with other areas. The findings are ...
Report
Precarious slopes? The Great Recession, federal stimulus, and New Jersey schools
While sparse literature exists investigating the impact of the Great Recession on various sectors of the economy, there is virtually no research that studies the effect of the Great Recession, or past recessions, on schools. This paper starts to fill the void. Studying school funding during the recession is of paramount importance because schools have a fundamental role in fostering human capital formation and economic growth. We exploit unique panel-data and trend-shift analysis to analyze how New Jersey school finances were affected during the Great Recession and the ARRA federal stimulus ...
Report
Still not out of the woods? New Jersey schools during the recession and beyond
Schools are essential in forming human capital and in improving the long-term health of the economy. They are also heavily reliant on state and local funds, which were severely depleted during the Great Recession. To alleviate some of the strain on local budgets, the federal government passed and implemented a large stimulus package, which included funds for school districts. However, the stimulus funds were drawn down beginning in 2011, at a time when state and local revenues were still under pressure. In this paper, we use a detailed panel data set of all school districts in New Jersey for ...
Discussion Paper
Tough Decisions, Depleted Revenues: Analysis of New Jersey Education Finances during the Great Recession
Today’s post, which complements Monday’s on New York State, considers the Great Recession’s impact on education funding in New Jersey. Using analysis published in our recent staff report, “Precarious Slopes? The Great Recession, Federal Stimulus, and New Jersey Schools,” we examine how school finances were affected during the recession and the ARRA federal stimulus period. We find strong evidence of a significant decline—relative to trend—in school revenues and expenditures following the recession as well as key compositional changes that could affect school financing and ...
Report
Effect of constraints on Tiebout competition: evidence from a school finance reform in the United States
In 1994, Michigan enacted a comprehensive school finance reform that not only significantly increased state aid to low-spending districts, but also placed restraints on the growth of spending in high-spending districts. While a rich literature studies the impact of school finance reforms on resource equalization, test scores, and residential sorting, there is no literature yet on the impact of such reforms on resource allocation by school districts. This study begins to fill this gap. The Michigan reform affords us a unique opportunity to study the impacts of such reforms on resource ...
Journal Article
Precarious slopes? The Great Recession, federal stimulus, and New Jersey schools
While only a sparse literature investigates the impact of the Great Recession on various sectors of the economy, there is virtually no research on the effect on schools. This article starts to fill the void. The authors make use of rich panel data and a trend-shift analysis to study how New Jersey school finances were affected by the onset of the recession and the federal stimulus that followed. Their results show strong evidence of downward shifts in total school funding and expenditures, relative to trend, following the recession. Support of more than $2 billion in American Recovery and ...
Report
The long road to recovery: New York Schools in the aftermath of the Great Recession
Schools play a crucial role in human capital development, and were one of the many elements of government adversely affected by the Great Recession. Using a rich panel data set of New York State school districts and a trend-shift analysis, we examine how the funding and expenditure dynamics of districts have changed in the four years since the recession hit. We find that although the stimulus prevented major cuts to expenditures while it was in place, once the stimulus funding was used up districts faced strong budget constraints and made deep cuts to their expenditures. While state and local ...
Report
Getting ahead by spending more? Local community response to state merit aid programs
In more than half of U.S. states over the past two decades, the implementation of merit aid programs has dramatically reduced net tuition expenses for college-bound students who attend in-state colleges. Although the intention of these programs was to improve access to enrollment for high-achieving students, it is possible that they had unanticipated effects. We analyze whether state funding for higher education and K-12 education changed as a result of program implementation, and whether local school districts attempt to counter any such changes. We employ two methodologies to study whether ...