The specific connection between increased school funding and student outcomes remains unclear—regardless of whether the added dollars are blanket or targeted—and the mechanisms at work remain elusive. Perhaps the historical record could shed some light on modern times. A new working paper offers a window into the past that might just show us the way for the future.
A quartet of researchers from the United States and Finland dig into data from Mississippi between 1940 and 2000, attempting to trace the impact of a school funding tweak implemented there in 1920. The so-called “equalization fund” was intended to provide more state dollars to districts whose expenses outpaced the combination of their base state revenue and their local tax revenue. Prior to 1920, districts with a majority-Black student population received higher funding than those with majority-White populations, largely because Black schools were fewer in number and geographically clustered, resulting in crowded buildings. Having more students meant receiving more money via the state’s base per capita formula. However, individual schools could be advantaged or disadvantaged as a result of allocation decisions made at the central office by White leaders who generally favored schools with more White students. That also meant that equalization funds ended up going to districts with a significant population of White students because, on paper, they received less from the state formula. Thus the unwritten rules of the Jim Crow South allowed almost-completely-separate and almost-completely-unequal school funding via every possible mechanism.
What changed when the equalization funds started flowing? The researchers fast-forward to 1940 and find that Mississippi schools were spending, on average, $5 per year per Black student versus $26 per White student (which translates to $107 versus $557 in today’s currency). For schools with a high concentration of Black students, this represents a decrease of about 4 to 6 cents for every percentage point increase in Black population share between 1920 and 1940.
They also zoom in to a subsample of school districts that did or did not receive equalization funding in 1940. Since there were instances of schools with a mix of Black and White students in both categories, they were able to create thirty-six district pairs for direct comparison. These districts were all relatively rural, with three-quarters of both their Black and their White students living on farms. Families were somewhat more disadvantaged relative to the broader population (for example, only 16 percent of Black families in the subsample owned their homes versus 24 percent in the larger group of districts). These districts included about 20 percent of all Black fourteen- to eighteen-year-olds from the larger group and roughly 9 percent of Whites.
Estimates indicate that higher levels of spending, where they occurred, had a positive effect on Black students’ educational attainment. Specifically, a $1 increase in annual instructional spending per Black student from the base average of $5 per year increased the fraction of fourteen- to sixteen-year-old Black students who completed at least sixth grade by around 1.5 percentage points (from a base of 45 percent) and increased mean completed years of schooling by around a tenth of a year (from a base of 5.28 years). Interestingly, the impact of increased marginal spending on White students was essentially null, but both outcome statistics were far higher for White students to begin with.
The researchers also go on to extrapolate these impacts over sixty years, using Census data to identify a sample of nearly 6,000 Black individuals who were between the ages of four and sixteen in Mississippi in 1940 and were still alive in 2000. Their analysis confirms that each dollar of additional instructional spending (as of 1940) was associated with a 0.09 year increase in completed education. This echoes the single-year estimate from 1940. Additionally, they find that higher school resources in 1940 were associated with significantly higher household and family income in 2000—an increase in $1 in school funding was associated with a 3 percent increase in income. This is a large effect relative to the size of the effect on completed schooling, suggesting that higher spending increased both the years of schooling of Black Mississippians and their returns per year of schooling. It’s worth noting that there were many other influences on the economic trajectory of all individuals between 1940 and 2000, including cycles of economic boom and bust, family migration, civil rights victories (along with unrealized goals), and numerous efforts to connect educational inputs and outcomes directly with a dedicated goal of fixing past injustices. Any or all could have influenced the economic outcomes of individuals in the study to greater or lesser degree, even if the researchers’ main point still stands.
The research team goes on to highlight the other side of the coin revealed by their initial analysis: what Black students who did not receive extra funding lost out on over the intervening years and how much better life might have been for them at the dawn of the twenty-first century if Black student funding in the state had equaled that of White students from 1940 onward. They (and others) discuss that long term analysis here.
Jim Crow–era Southern White leaders used every possible lever to keep Black people down and to raise up their own White sons and daughters. But data and analysis from recent years indicate that those sorry days are largely gone, although there is still work to be done. As my colleague Adam Tyner discusses in depth in his 2023 “Think Again” publication on school funding, research shows that, nationally, as of 2022, Black and Hispanic students were receiving $514 and $115 more per pupil, on average, than White students, respectively. “It is true, however, that funding gaps based on race/ethnicity are more common than those based on SES,” he writes. “Whereas Lee et al. find only a handful of states where total school-level funding is even slightly regressive, they identify more than twenty states where Black or Hispanic students are funded at lower levels than their White counterparts, although only a few of those differences are statistically significant.” One of those states is Texas, another place whose Black residents suffered under Jim Crow regimes for decades after the Civil War. “Although equity advocates shouldn’t exaggerate the problem,” Tyner concludes, “the persistence of racial disparities should prompt action in the places where they still exist.” This window on Mississippi’s past—especially the multi-decade impacts of a single school funding decision—provides a light by which to clearly see the consequences of inequity and gives us incentive to end those inequities wherever they may still exist once and for all.
SOURCE: David Card et. al, “School Equalization in the Shadow of Jim Crow: Causes and Consequences of Resource Disparity in Mississippi circa 1940,” National Bureau of Economic Research Working Papers (June 2024).
