scholarly journals Do School Spending Cuts Matter? Evidence from the Great Recession

2021 ◽  
Vol 13 (2) ◽  
pp. 304-335
Author(s):  
C. Kirabo Jackson ◽  
Cora Wigger ◽  
Heyu Xiong
Keyword(s):  
Public Schools ◽  
Great Recession ◽  
Test Scores ◽  
Budget Cuts ◽  
The Great Recession ◽  
College Going ◽  
The Business Cycle ◽  
The Impact ◽  
Spending Cuts ◽  
School Spending

During the Great Recession, national public school per-pupil spending fell by roughly 7 percent and persisted beyond the recovery. The impact of such large and sustained education funding cuts is not well understood. To examine this, first, we document that the recessionary drop in spending coincided with the end of decades-long national growth in both test scores and college-going. 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 (i) other ill-effects of the recession or (ii) endogenous state policies, we use states’ historical reliance on state-appropriated funds (which are more sensitive to the business cycle) 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 college-going rates. The spending cuts led to larger test score gaps by income and race. (JEL E32, H52, H75, I21, I28, J15)

scholarly journals The Great Recession and Public Education

2019 ◽  
Vol 14 (2) ◽  
pp. 298-326 ◽  
Author(s):  
William N. Evans ◽  
Robert M. Schwab ◽  
Kathryn L. Wagner
Keyword(s):  
Public Education ◽  
Great Recession ◽  
Property Tax ◽  
State Governments ◽  
School Employees ◽  
The Great Recession ◽  
The Impact ◽  
Public Education Finance ◽  
Work First ◽  
School Spending

We examine the impact of the Great Recession on public education finance and employment. Five major themes emerge from our work. First, nearly 300,000 school employees lost their jobs. Second, schools that were heavily dependent financially on state governments were particularly vulnerable to the recession. Third, local revenues from the property tax actually increased during the recession, primarily because millage rates rose in response to declining property values. Fourth, inequality in school spending rose sharply during the Great Recession. We argue, however, that we need to be very cautious about this result. School spending inequality has risen steadily since 2000; the trend in inequality we see in the 2008–13 period is very similar to the trend we see in the 2000–08 period. Fifth, the federal government's efforts to shield education from some of the worst effects of the recession achieved their major goal.

scholarly journals Real vs. nominal cycles: a multistate Markov-switching bi-factor approach

2014 ◽  
Vol 18 (5) ◽  
Author(s):  
Danilo Leiva-Leon
Keyword(s):  
Business Cycle ◽  
Great Recession ◽  
Probabilistic Model ◽  
Housing Demand ◽  
Real Activity ◽  
The Great Recession ◽  
Supply Shocks ◽  
The Business Cycle ◽  
The Impact ◽  
Simultaneous Inferences

AbstractThis paper proposes a probabilistic model based on comovements and nonlinearities useful to assess the type of shock affecting each phase of the business cycle. By providing simultaneous inferences on the phases of real activity and inflation cycles, contractionary episodes are dated and categorized into demand, supply and mix recessions. The impact of shocks originated in the housing market over the business cycle is also assessed, finding that recessions are usually accompanied by housing deflationary pressures, while expansions are mainly influenced by housing demand shocks, with the only exception occurred during the period surrounding the “Great Recession,” affected by expansionary housing supply shocks.

Growing up in Poverty: Children and the Great Recession in Spain

2017 ◽  
Author(s):  
Sara Ayllón
Keyword(s):  
Great Recession ◽  
Social Protection ◽  
Child Poverty ◽  
Well Being ◽  
Economic Downturn ◽  
Growing Up ◽  
The Great Recession ◽  
The Business Cycle ◽  
The Impact ◽  
Economic Well Being

This chapter provides a diagnosis of the economic ill-fare of Spanish children since 2008 with the objective of assessing the impact that the Great Recession has had on them. The results show children’s great economic vulnerability to changes in the business cycle. The Great Recession has had important consequences on the economic well-being of many children—not only because of the sky-high unemployment rates of the adults that look after them, but also because of the lack of a generous and comprehensive social protection system that can be relied upon when the economy slows down. Notwithstanding this, it is important to remember that child poverty was a major social problem in Spain before this economic downturn.

scholarly journals Preventing NEETs during the Great Recession: the effects of mandatory activation programs for young welfare recipients

2021 ◽  
Author(s):  
Emile Cammeraat ◽  
Egbert Jongen ◽  
Pierre Koning
Keyword(s):  
The Netherlands ◽  
Great Recession ◽  
Economic Recession ◽  
Welfare Recipients ◽  
Employment Effects ◽  
The Great Recession ◽  
Employment Education ◽  
The Impact

AbstractWe study the impact of mandatory activation programs for young welfare recipients in the Netherlands. What makes this reform unique is that it clashed head on with the Great Recession. We use differences-in-differences and data for the period 1999–2012 to estimate the effects of this reform. We find that the reform reduced the number of welfare recipients but had no effect on the number of NEETs (individuals not in employment, education or training). The absence of employment effects contrasts with previous studies on the impact of mandatory activation programs, which we argue is due to the reform taking place during a severe economic recession.

Shock or Design: What Drives Fiscal De/Centralization? A Comparative Analysis of Twenty-Nine OECD Countries, 1995–2017

2020 ◽  
Vol 51 (1) ◽  
pp. 1-26
Author(s):  
Tobias Arnold ◽  
Sean Mueller ◽  
Adrian Vatter
Keyword(s):  
Crisis Management ◽  
Great Recession ◽  
Political System ◽  
Multidimensional Approach ◽  
New Paradigm ◽  
The Great Recession ◽  
The Past ◽  
Fiscal Centralization ◽  
The Impact ◽  
Active Policy

Abstract Over the past decades, decentralization has become the new paradigm in how states should organize power territorially. Carefully planned institutional re-designs are the most visible expression thereof. Yet the Great Recession of 2007–2009 has pushed governments into the opposite direction, i.e., towards centralization, to better weather the fiscal drought. Given these contradictory developments, this article compares the effects of twenty-three separate state reforms with the impact of the Great Recession on fiscal centralization in twenty-nine countries over more than two decades. In the main, our analyses attribute a larger effect to design, i.e., pro-active policy making through reforms, than reactive crisis management after a great shock. However, this difference is only apparent once we consider a state’s institutional structure, that is whether a political system is unitary or federal. Our findings thus highlight the need for a multidimensional approach to better understand the drivers of fiscal de/centralization.

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