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ERIC Number: ED556794
Record Type: Non-Journal
Publication Date: 2012-Mar
Pages: 52
Abstractor: As Provided
Reference Count: 9
The Impact of the Great Recession on School District Finances: Evidence from New York. Working Paper #03-12
Chakrabarti, Rajashri; Setren, Elizabeth
Institute for Education and Social Policy
There is a slowly emerging literature that seeks to understand how the Great Recession affected other parts of the economy; however, there is no research that examines the effect of Great Recession (or any other recession) on schools. Given the fundamental role of education in human capital formation and growth, it is essential to understand the effect of recessions on schools. This paper starts to fill this gap. Exploiting detailed data on a multitude of school finance indicators and a trend shift analysis, it examines how the Great Recession affected school funding in NY. While we find no evidence of effects on either total revenue or expenditure, there were important compositional changes to both. There is strong evidence of substitution of funds on the revenue side--the infusion of funds with the federal stimulus occurred simultaneously with statistically and economically significant cuts in state and local financing, especially the former. On the expenditure side, instructional expenditure was maintained, while several non-instruction categories like transportation, student activities and utilities suffered. Important heterogeneities in experiences are also observed by poverty, metro areas, size, and urban status. Affluent districts were hurt the most, while analysis by metro areas reveal that the NYC metropolitan area, and especially Nassau, sustained largest losses. The findings of this study promise to facilitate our understanding of how recessions affect schools and the role policy can play to mitigate the consequences.
Institute for Education and Social Policy. New York University, Joseph and Violet Pless Hall, 82 Washington Square East, New York, NY 10003. Tel: 212-998-5880; Fax: 212-995-4564; e-mail:; Web site:
Publication Type: Reports - Research; Numerical/Quantitative Data
Education Level: Elementary Secondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: New York University, Institute for Education and Social Policy (IESP)
Identifiers - Location: New York
Identifiers - Laws, Policies, & Programs: American Recovery and Reinvestment Act 2009