Does Increased TK-12 Funding Improve Student Learning and Narrow Achievement Gaps? New Evidence from California’s Local Control Funding Formula

Abstract:
This study analyzes the efficacy of one of the most ambitious school funding reform efforts in California in a generation to reduce academic achievement gaps between socioeconomically disadvantaged children and their more advantaged counterparts: the Local Control Funding Formula (LCFF). I link district- and school-level information on school resources and per-pupil spending with longitudinal student data for the full universe of public school students in California to analyze the determinants of student trajectories throughout their K-12 years. This student-level data includes more than 6.5 million students in each year across K-12 years. My analyses span 1995-2018 school years, across the 10,000 schools and 1,000 districts in the state. LCFF committed $18 billion over 8 years in increased public K-12 spending and introduced a new progressive funding formula (2013-2019), which I exploit to isolate policy-induced changes in school spending across cohorts and districts at each of grades K-12. Using quasi-experimental methods (2SLS-IV, difference-in-difference, and regression discontinuity designs) to facilitate causal inference, I analyze the causal effects of public K12 school spending on student achievement. This includes impacts on math and reading achievement in grades 3-8 and 11 and high school graduation. This is the first comprehensive study of LCFF impacts on student outcomes across all grades.

I find positive and significant effects of LCFF-induced increases in per-pupil on academic achievement for every grade (3rd-8th and 11th), every subject (math and reading), and for every school that experienced this new infusion of state funds, which targeted lower-income districts and students. The impacts on student achievement increased with both school-age years of exposure to the greater funding and with the amount of increased funding that occurred due to LCFF. Furthermore, I find the increased school spending subsequently increased the likelihood of graduating from high school and college readiness. Equally important, the results indicate a significant narrowing of the average achievement gap (by poverty status). Finally, I find significant beneficial effects of access to Transitional Kindergarten (TK) for low-income children as evidenced in improved third and fourth grade reading and math achievement. Moreover, I document positive synergistic effects of TK and elementary school spending on student achievement.