Skip to main content
Unpublished Paper
Do School Spending Cuts Matter? Evidence from the Great Recession
  • C. Kirabo Jackson
  • Cora Wigger, Northwestern University
  • Heyu Xiong, Northwestern University
During the Great Recession, national public-school per-pupil spending fell by roughly seven percent. While increased public-school spending has been linked to improved student outcomes, the impact of large education funding cuts is not well understood. To examine this, first, we document that the drop in spending after the recession coincided with the end of decades-long national test score growth. Next, we show that this stalled educational progress was particularly pronounced in states that experienced larger recessionary budget cuts for plausibly exogenous reasons. To isolate budget cuts that were unrelated to (a) other ill-effects of the recession or (b) endogenous state policies, we use states' historical reliance on State taxes to fund public schools interacted with the timing of the recession as instruments for reductions in school spending. Cohorts exposed to these spending cuts had lower test scores and lower high-school completion rates. While the test score impacts were similar for poor and non-poor children, the high school completion impacts were largest for Hispanic students.
  • school spending,
  • Great Recession,
  • test scores
Publication Date
Citation Information
C. Kirabo Jackson, Cora Wigger and Heyu Xiong. "Do School Spending Cuts Matter? Evidence from the Great Recession" (2018)
Available at: