From the Field

Research Notes: Does Extra Funding for Rural School Districts Make a Difference?

Rural school districts face unique challenges, often serving small populations of students spread across large areas. This contributes to higher transportation costs and to difficulties in providing advanced coursework and recruiting staff members. Recognizing this, states across the country are providing additional funding to rural districts. But is that money making a difference?

In a new working paper from the Annenberg Institute, researchers examine one of the largest programs: Wisconin’s Sparsity Aid, which provides $28 million in unrestricted funds annually to more than 140 districts.

The authors—Riley K. Acton of Miami University, Cody Orr of the U.S. Census Bureau and Salem Rogers of Michigan State University—found no significant change in standardized test scores for students in these districts after the state began providing the additional aid, but did find a modest increase in college enrollment and completion.

Using several data sources from Wisconsin, including student level records from 2005 to 2018, the authors reviewed expenditures and outcomes before and after the Sparsity Aid began flowing in 2008.  They found that the aid increased annual spending by 2 percent on average, leading to more expenditures for administration, food services and general operations, among other priorities. They did not find much impact on teacher salaries or student-teacher ratios.

When the researchers looked at student outcomes, they saw no significant changes in student behavior, attendance, or test scores. The college enrollment and completion increases were largely in the two-year college sector.

The study adds to existing scholarship of financial interventions in small rural districts and suggests ways in which the extra resources can support student success.

Read the Research

Returns to School Spending in Rural America: Evidence from Wisconsin’s Sparsity Aid Program

February 2023

Riley K. Acton, Miami University and IZA; Cody Orr, Center for Economic Studies, U.S. Census Bureau; Salem Rogers, Michigan State University