Essays on Education Economics

I study how forces outside of student control can affect the quality of education they receive. The first chapter of my dissertation investigates how economic downturns influence the qualifications of teachers hired during them. Due to strict collective bargaining agreements, teacher salaries fall relatively less than alternative professions during economic downturns. This may influence highly qualified individuals on the margin of becoming a teacher to enter the profession during poor labor markets. Using New York State Education Department data, I employ a fixed effects regression model to estimate the effect of local unemployment rates on teacher qualifications, as well as other demographic variables. I find that higher local unemployment rates lead districts to hire more qualified teachers. These more qualified teachers are younger, more local, and teach for fewer years. All of these results are consistent with economic downturns increasing the supply of teachers in the local labor market, pulling from a pool of teaching candidates on the margin of entering the profession.

The second chapter examines the ways school districts adjust to unexpected budget tightness, and the ways they reduce spending. By using a statewide pension contribution rate in New York, a percentage of teacher salaries that schools are required to contribute to the statewide pension fund announced as schools are finalizing their budgets, I am able to construct an instrument for teacher retirement spending. I find that school districts reduce spending by a statistically significant amount on instructional equipment and staff, extracurricular activities, and delay paying off debt. These results show that many of the ways school districts cut back may have a direct impact on students.

The third chapter examines how increased access to post-secondary education affects the performance and demographics of school districts. Place-based scholarships are a form of tuition assistance in which eligibility is primarily based on graduating from a particular school district, rather than financial need or academic merit. More than 200 such programs nationwide aim to assist prospective college students paying for the rising costs of tuition. This paper seeks to examine whether these place-based scholarships have any impact on early childhood academic performance. By looking at the Say Yes to Education scholarships in Syracuse and Buffalo and using publicly available New York data, I find that these scholarships increase student performance on 4th grade exam scores by approximately one-third of a standard deviation. Interestingly, these results appear to be partially determined by shifting demographics, with the number of not economically disadvantaged test takers increasing enough to account for between one-fifth to one-fourth of the total change.