Monetary Transfers to Educational Institutions and Individuals: Their Effectiveness, and Their Spillovers

Abstract

In this dissertation I examine the impacts of monetary transfers to institutions (public schools) and individuals (single parents). I show that federal investments in low-performing public schools made via the School Improvement Grant Program (SIG) lead to increases in testing proficiency, and that child support payments made to custodial parents (focusing on single mother recipients of child support) cause shifts in those parents' labor supply. I show that SIG increased rates of math proficiency on state standardized tests by 11.4% (up 4.2 - 5.0 percentage points, from a baseline of 40.2%), and increased rates of reading proficiency on state standardized tests by 9.5% (up 3.7 - 4.0 percentage points, from a baseline of 39.4%). I estimate marginal and cumulative effects of SIG dollars on schools' testing proficiency, showing that a major factor determining SIG's effectiveness was funding intensity (dollars per-pupil received by schools). I also show that in certain specific contexts (Nashville Metro Public Schools) the school overhauls implemented by SIG caused unintended side-effects not seen in the overall population of SIG schools, such as gentrification of local neighborhoods and schools, with significant whitening of school/neighborhood demographics, and increases in local housing prices. In my estimation of the impact of child support transfer payments on the labor supply of single-mother households, I use a simulated instrumental variables approach to determine the impact of child support payments on the labor supply of U.S. single-mother households over the years 1988-2019, finding that child support income leads to moderate reductions in custodial parents' involvement in the formal labor market. My estimates imply that a $1,000 (2019 USD) increase in annual child support income induces a 1.4 hour decrease in weekly hours worked, a 2.3 week decrease in weeks worked per year, and a 3.8 percentage point reduction in the likelihood of being employed among U.S. single mother households with active child support orders.