Handbook of Research in Education Finance and Policy

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Handbook of Research in Education Finance and Policy

Editors: Helen F. Ladd and Edward B. Fiske

Table of Contents

Introduction. Helen F. Ladd and Edward B. Fiske

Section I. Perspectives on Education Finance and Policy

Section Editors: James W. Guthrie and Michael Kirst

As is true of any field of inquiry, education finance and policy can be viewed through a variety of lenses or perspectives. The initial section of the Handbook consists of a series of articles looking at how research in the field has evolved – and where it now stands – through seven different lenses.

1. History and Scholarship Regarding United States Education Finance and Policy. Matthew G. Springer, Eric A. Houck and James W. Guthrie. This chapter describes the evolution of American education finance policy and discusses characteristics that distinguish “historic” from “contemporary” education finance. It reviews basic education governance structures as well as the revenue generation and resource distribution mechanisms upon which American public education now depends. This discussion sets the stage for an examination of the three public values shaping the direction of contemporary education finance and policy – equity, efficiency, and liberty.

2. The Role of Economics in Education Policy Research. Dominic J. Brewer, Guilbert C. Hentschke and Eric R. Eide with Ally Kuzin and Michelle Nayfack

This chapter discusses the growing importance of economics in education policy. Economic concepts important for education are reviewed including the relationship between education and the economy, the concept of investment in human capital, the role of markets, and educational production functions.

3. The Past, Present and Possible Futures of Educational Finance Reform Litigation. William S. Koski and Jesse Hahnel. This chapter examines the history of educational finance reform litigation from its origins and short life in federal court to modern adequacy litigations. The authors consider the doctrinal standards courts employ in such litigation as well as the complex remedies that courts and litigants are developing in response to judicial rulings. The chapter closes with a discussion of the possible futures of educational finance litigation, including litigation addressing inter-state and intra-district inequity, remedial schemes that enhance student and parent choice, and the possibility that the judiciary may be reaching its institutional limitations in addressing these complex issues.

4. Politics, Political Cultures and Government. James W. Guthrie and Kenneth Wong. This chapter describes the nature of politics, political processes and government structures, and it offers theoretical lenses through which to view the interaction of politics and policy. The authors illustrate the manner in which these political forces and structures influence education using the No Child Left Behind Act as a case study.

5. Educational Goals: A Public Perspective. Richard Rothstein and Rebecca Jacobsen. Contemporary school accountability for standardized math and reading scores alone undermines Americans' commitment to a broad range of school outcomes, including not only basic skills but also citizenship, work ethic, social skills, physical and mental health, and appreciation of the arts and literature. A new accountability system is feasible, one that would create incentives for schools to balance their pursuit of these diverse goals.

6. Quantitative Research Methods in Education Finance and Policy. Patrick McEwan. The chapter provides an overview of research questions in education policy and the appropriate methods for answering them. In particular, it reviews the rationale, intuition, and pitfalls of quantitative methods for addressing research questions about the causal relationship between policies and outcomes, including regression analysis, randomized experiments, the regression-discontinuity design, and others.

7. The Evolution of Comparative and International Education Statistics. Stephen P. Heyneman and Chad R. Lykins. This chapter highlights critical moments in the history of international education finance. It gives specific attention to the role of international agencies, such as the World Bank, OECD, and UNESCO, in coordinating cross-national comparisons such as TIMMS and PISA. It then describes the nature, role, and limitations of such comparisons, as well as the reform movements (such as Education for All) to which they have given rise.

Section II. Making Money Matter

Section Editors: Jennifer King Rice and Amy Ellen Schwartz

Given the growing emphasis on the performance of public schools and school systems, policymakers and researchers have intensified their efforts to identify strategies for improving educational results by using resources more productively. Chapters in this section consider the concept of productivity in education and examine theoretical and empirical research on policies to increase the quality of teachers and to provide stronger incentives for school improvement.

8. Toward an Understanding of Productivity in Education. Jennifer King Rice and Amy Ellen Schwartz.. This chapter examines the theoretical and empirical research on productivity in education. After providing an overview of the concept of productivity in education, the authors describe various research traditions that shed light on the empirical relationships between education inputs and outcomes. Special attention is given to the education production function, a primary analytical construct used by economists. The chapter concludes by discussing the importance of productivity considerations in promoting efficiency and equity in public education.

9. Teachers Matter, But Effective Teacher Quality Policies are Elusive. Dan Goldhaber. This chapter focuses on teachers as a key resource in education. While research has identified teachers as the most important educational resource provided to students, the author reviews evidence that demonstrates the limits of relying on teacher qualifications as indicators of teacher quality. The chapter describes policy alternatives for improving teacher quality including strategies focused on relaxing requirements for entry into the profession (“teacher gateway policies”) and policies aimed at improving the effectiveness of existing teachers (“teacher workforce policies”).

10. School Accountability and Student Achievement. David N. Figlio and Helen F. Ladd. The use of accountability policies as a mechanism to improve the productivity of schools and school systems has become widespread. The authors of this chapter focus on administrative accountability systems that rely heavily on student testing to promote better performance within traditional public education systems. This chapter describes the rationale for school-based accountability, examines a number of policy design issues that can affect the impact of these policies, discusses reasons why accountability might not increase student achievement, and presents evidence on the effects of accountability on student achievement.

11. School Competition and Student Outcomes. Brian Gill and Kevin Booker. Supporters of market-based reforms in education argue that competitive forces will promote higher school productivity. Market-based approaches include charter schools, public funding for private schools, and private management of public schools. This chapter presents findings from research that examines how competitive pressures promoted by market-based reforms affect conventional public schools and the traditional purposes of public education, including student integration and the education of democratic citizens.

Section III. Promoting Equity and Adequacy

Section Editor: Leanna Stiefel

The concept of equity has been evolving in the courts from a focus on the distribution of spending and inputs across districts to a greater focus on whether local districts are providing an adequate education to all students. This section addresses this evolution, with close attention to methodological considerations, political issues and international comparisons.

12. Conceptions of Equity and Adequacy in School Finance. Bruce D. Baker and Preston C. Green. This chapter provides an overview of conceptions of equity and adequacy applied to school finance policy in the United States with attention to the legal underpinnings of equity and adequacy frameworks. The chapter concludes with a framework for evaluating the level and distribution of financial resources across local public school districts in the U.S. that delineates between horizontal equity, vertical equity, vertical equity as adequacy, and adequacy independent of equity.

13. Measuring Equity and Adequacy in School Finance. Thomas A. Downes and Leanna Stiefel. The authors discuss differences in values among well-established measures of horizontal and vertical equity of school finance systems and show how choices of measures can affect equity rankings. They then describe the pros and cons of four approaches to measuring adequacy – professional judgment, successful district, whole school design, and cost function. The chapter ends with discussions of the incentives created when aid formulas include adjustments for adequacy and of lingering research questions.

14. Measurement of Cost Differentials. William D. Duncombe and John Yinger. Many scholars have recognized that it costs more to reach a given level of educational performance in some school districts than in others for reasons outside the control of school officials. This chapter surveys the literature on education cost differences and discusses the strengths and weaknesses of alternative approaches. The authors examine three categories of cost factors: resource prices, district size and student needs.

15. Intergovernmental Aid Formulas and Case Studies. Lawrence O. Picus, Margaret Goertz and Allan Odden. This chapter describes state school finance formulas as they evolved from focusing on tax payer equity through the mitigation of differences in property tax capacity to meeting today’s adequacy requirements. The authors demonstrate how state school finance formulas operate and how different formulas serve specific policy concerns. The authors provide brief descriptions of state school aid formulas and how those formulas have affected school district resources.

16. Education Equity in an International Context. Edward B. Fiske and Helen F. Ladd. An international movement has emerged to promote equity in education, especially in developing countries. The authors focus on core policy issues of universal access to primary education, expanded access for girls, and fiscal equity through the elimination of school fees. They describe the difficulties inherent in measuring progress toward equity and show how developing countries inevitably face tradeoffs between enhanced access and quality of education.

Section IV. Changing Patterns of Governance and Finance

Section Editor: Andrew Reschovsky

This section focuses on how responsibilities for finance and governance are distributed among the three levels of government. It explores changes in the sources of resources used to fund public elementary and secondary education, investigates the tools federal and state governments use to influence the taxation, spending, and educational policies of local school districts, and hypothesizes about changes that are likely to occur in the sources and distribution of revenue. The section also explores the increasing role of foundations, think tanks and business groups in the financing and governance of schools.

17. The Changing Federal Role in Education Finance and Governance. Nora E. Gordon. Prior to the early 1960’s, the federal role in the financing and governance of schools was quite limited. It then expanded during the Post War Period for reasons that had more to do with other policy concerns such as national security or poverty than with explicit concerns about education. This chapter describes and evaluates the growth of the federal role during the 20th century , culminating with the No Child Left Behind of 2001, and emphasizes how the near future of the federal role will depend in large part on the implementation of this law.

18. The Role of Nongovernmental Organizations in Financing Public Schools. Janet S. Hansen. Although financing K-12 public schools in the United States is overwhelmingly a governmental responsibility, nongovernmental funding is of increasing interest from a policy perspective. Many private organizations provide funds for public schools, though data on such sources of revenue are limited and imprecise. This paper summarizes what is known about the amount, purpose, and effect of dollars directed to schools from locally-based voluntary contributors, independent foundations, and corporate supporters.

19. Equity, Adequacy, and the Evolving State Role in Education Finance. Sean P. Corcoran and William N. Evans. Over the 20th century states have emerged as the predominant source of funding for public elementary and secondary education in the U.S. The authors examine the evolving role of the states in school finance, focusing on the extent to which court-mandated reform has affected this role and the level and distribution of school resources within states. They further review how this recent transformation of school funding has affected student achievement and other non-fiscal measures.

20. Local Funding of Schools: The Property Tax and Its Alternatives. Therese J. McGuire and Leslie E. Papke. While the property tax has long been the primary source of local funding for schools, its role has diminished in recent decades. To offset perceived problems with the property tax, states have increased state aid to school districts and limited access of local governments to property taxes. The authors assess the criticisms of the local property tax and compare the tax, using standard economic criteria, to other local alternatives for funding schools.

21. Tax and Expenditure Limits, School Finance, and School Quality. Thomas A. Downes and David N. Figlio. Advocates of tax and expenditure limits often support them with the hope that they will reduce the size of local governments without reducing the quality of public education. The authors of this paper summarize research showing that even though tax limits have exerted relatively small dampening effects on education pending they have led to relatively large reductions in the academic performance of public school students. In a final section the authors review the research that helps to explain these patterns and to reconcile them with the common view that increases in spending do little to increase student performance.

Section V. Educational Markets and Decentralization

Section Editor: Henry M. Levin

This section views approaches to financing and managing schools that draw upon market-type principles of choice, privatization, and decentralization of decision-making to schools and families. The analysis provides and overview of the issues that arise in educational privatization and highlights the strengths and weaknesses of using the school as the primary unit for finance, managerial responsibility, and accountability. Specific topics include charter schools, vouchers and tax credits, educational management organizations, and home schooling with special attention to distance learning. The section delineates the advantages and challenges that arise when decentralized solutions are used to address both the private and social benefits of education.

22. Issues in Educational Privatization. Henry M. Levin. Though many observers refer to educational privatization as a term that has a generic meaning and interpretation for educational policy, in fact privatization takes many forms. Moreover differences in details can account for large differences in educational outcomes. This chapter explores how differences in finance, regulation and support services characterize specific approaches to educational privatization and how these differences can account for substantial diversity in the outcomes related to choice, efficiency, equity, and social cohesion that emerge from specific privatization plans.

23. Autonomous Schools: Theory, Evidence and Policy. David Plank and BetsANN Smith. Governments around the world have adopted policies that strengthen central control over goals and standards in the education system, while decentralizing responsibility for execution and accountability for results to individual schools. The authors review the theoretical bases for this new policy framework and assess the empirical evidence on the performance of autonomous schools. This evidence is mixed, at best. The authors conclude that the state must play an active role in the education system, including the creation and support of intermediary institutions to provide assistance to struggling schools.

24. Charter Schools. Robert Bifulco and Katrina Bulkley. This chapter surveys research on charter school programs in the U.S. with an eye to elucidating the costs and benefits of existing charter school programs as well as the more general effects of parental choice, market competition and school level autonomy. It reviews the intellectual arguments and the political dynamics underlying the charter school movement, and it summarizes studies of how charter school programs have affected educational practices, student segregation, academic achievement and school efficiency.

25. Beyond the Rhetoric: Surveying the Evidence on Vouchers and Tax Credits. Ron Zimmer and Eric Bettinger. Advocates of greater school choice have long hailed school vouchers and tax credits as keys to educational improvement, while critics say they will primarily increase inequities. The authors describe the contentious debates that have arisen over vouchers and tax credits and summarize the best research evidence of the impacts – positive and negative – of these policies both in the U.S. and abroad.