Does Money Still Matter? Attainment and Earnings Effects of Post-1990 School Finance Reforms

Card and Krueger (1992a,b) used labor market outcomes to study the productivity of school spending. Following their lead, we examine effects of post-1990 school finance reforms on students’ educational attainment and labor market outcomes. Lafortune et al. (2018) show that these reforms increased school spending and narrowed spending and achievement gaps between high- and low-income districts. Using a state-by-cohort panel design, we find that reforms increased high school completion and college-going, concentrated among Black students and women, and raised annual earnings. They also increased the return to education, particularly for Black students and men and driven by the return to high school.