How Finance Reform May Alter Teacher and School Quality: California’s $23 Billion Initiative

Gains in school spending helped to lift achievement over the past half century. But California’s ambitious effort—progressively distributing $23 billion in yearly funding to poorer districts—has yet to reduce disparities in learning. We theorize how administrators in districts and schools, given organizational habits and labor constraints, may fail to move quality resources to disadvantaged students. We identify the exogenous portion of California’s post-2013 reform, finding that schools receiving progressively targeted funding tended to hire inexperienced teachers and disproportionately assign novices to courses serving English learners. New funding expanded the array of courses in high schools, as access to college-preparatory classes by English learners declined. These unfair mechanisms operated most strongly in high-needs schools serving larger concentrations of poor students.