We explore how teachers unions affect education production by comparing outcomes between districts allocating new tax revenue amidst collective bargaining negotiations and districts allocating tax revenue well before. Districts facing union pressure …
Opportunities to estimate the causal effect of school spending on student achievement are infrequent and have been based, almost entirely, on variation in spending from large school finance reforms. Property values also affect school spending through both local property tax revenue and the level of state aid provided to each school district. However, little is known about the effect property values have on student achievement through their impact on school revenue.
Over the past half-century, court-ordered increases in public school spending dramatically changed the level and distribution of school resources in the United States. Recent evidence from surveys suggests that school finance reforms improved students’ short- and long-run outcomes. However, the policy implications remain unclear because, although observed effects are significantly different from zero, we do not know whether the benefits exceed the costs, or whether the internal rate of return exceeds benchmark interest rates.