Schools and Stimulus ∗
نویسندگان
چکیده
This paper analyzes the impact of the education funding component of the American Recovery and Reinvestment Act of 2009 (the Recovery Act) on public school districts. We use crosssectional differences in district-level Recovery Act funding to investigate the program’s impact on staffing, expenditures and debt accumulation. To achieve identification, we use exogenous variation across districts in the allocations of Recovery Act funds for students with special needs. We estimate that $1 million in grants to a district had the following effects: expenditures increased by $570 thousand, district employment saw little or no change, and an additional $370 thousand in debt was accumulated. Moreover, 70% of the increase in expenditures was in the form of capital outlays. Next, we build a dynamic, decision-theoretic model of a school district’s budgeting problem, which we calibrate to district-level expenditure and staffing data. The model can qualitatively match the employment and capital expenditure responses from our regressions. We also use the model to conduct policy experiments.
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