Clara (Yehyun) Kyung

Resources or Rewards? The Impacts of School District Funding and Incentives on Student Outcomes

with Haruka Uchida

Abstract: School funding and accountability are prevalent policy tools in public education, but their efficacy in improving student outcomes remains contested. We study the impacts of a statewide education reform in Texas that (1) changed the formula that links school district characteristics to funding, and, in a novel shift from test-based accountability, (2) introduced financial bonuses for districts based on high school graduates' attainment outcomes, including college enrollment and industry-based certification. Using policy-driven, between-district variation in district spending and incentives, we find that both spending and incentives improved the composite attainment outcome targeted by the bonus policy. Relative to funding increases, incentives produced comparable gains at a lower government cost. Effects on attainment are driven by industry-based certifications, with little effect on college enrollment. However, by focusing on high school graduates’ outcomes, the bonus structure incentivized districts to reduce graduation rates among 12th graders who were unlikely to meet the attainment criteria: we indeed find that incentives decreased graduation rates and increased dropout rates. Consequently, we find mixed evidence on college and career outcomes one year after 12th grade: neither district spending nor incentives affected the share of students who were employed or enrolled in college, but both increased earnings. Our results highlight both the potential promise and design challenges of attainment-based incentive policies.

How Elastic Can Teacher Labor Supply Be? Evidence from Texas (draft available upon request)

Teacher demand varies significantly across regions within states. The most flexible tool available to policymakers for increasing the supply of teachers to a particular school district is to increase teacher pay. However, in many states, certain aspects of the teacher labor market may lead to a lower responsiveness of teacher supply to teacher pay. First, many states lack a highly robust alternative certification program network---these programs are important for increasing the supply of new teachers because they provide an avenue for individuals to switch to a teaching career. Second, several states do not award full credit for prior out-of-district teaching experience; in these states, a teacher who switches districts will be paid as if they had fewer years of experience. One state that is unique on both of these fronts is Texas: the state has one of highest shares of new teachers trained through alternative certification programs in the country, and the state's Education Code mandates that teachers receive full credit for prior teaching experience in nearly all types of schools. For these reasons, estimates from Texas may provide an upper bound for labor supply elasticity to a school district. Using within-district, idiosyncratic variation in enrollment-driven demand, I find that labor supply elasticity to a school district in Texas can be as high as 7. My main estimate is predictably higher than that from a previous study using data from the 1980s in Missouri, a setting in which no alternative certification programs existed and teachers received only partial credit for past out-of-district teaching experience.