Does Money Matter More in the Country? Education Funding Reductions and Achievement in Kansas, 2010–2018

Abstract

The U.S. Department of Education made recent technical changes reducing eligibility for the Rural and Low-Income School Program. Given smaller budgets and lower economies of scale, rural districts may be less able to absorb short-term funding cuts and experience stronger negative achievement effects. Kansas implemented a state-level finance change (block grant funding) after 2015, which froze district revenue regardless of enrollment and reduced funding in districts where enrollment increased. Difference-in-differences models compare achievement before and after block grant implementation to estimate effects of funding cuts separately in rural and nonrural districts. Between-state and within-state comparisons offer complementary identification strategies in which the strengths of one approach help address limitations of the other. Revenue/spending reductions are similar by geography but represent a larger fraction of rural district budgets. Results indicate that revenue reductions have larger implications for achievement in rural areas, where they represent a larger proportion of the total budget.