Credit Constrained? How the Cost of Capital Affects District Resources and Student Achievement

Cameron Anglum

In recent years, school finance research has extensively augmented the body of empirical evidence concerning the effect of various school finance reforms, much of it revealing the important role of resources on outcomes for economically disadvantaged students. This study focuses on an aspect of school finance which remains largely unaddressed by the public policy literature, namely the relationship between school district credit constraints, crucial investments in public schools, and underserved student populations. By leveraging an exogenous shock to district borrowing capacities, this paper seeks to estimate the effects of how such changes affect district debt issuance, school resource provision and allocation, and student achievement. District debt issuance, which has grown substantially in recent decades, regularly finances investments in the physical infrastructure of public schools, investments which may improve student achievement, local property wealth, and other public policy outcomes. Such investments, however, are made by school districts characterized by a wide distribution of credit profiles and quality of existing infrastructure, attributes that vary widely by district urbanicity and student socioeconomic traits. To further examine these disparities, this study will shed light on the role of credit constraints in school investments and the role district debt may play in school resource provision and student achievement across varied geographic areas and diverse student populations.

About Cameron Anglum

Cameron Anglum is a Ph.D. candidate in Education Policy at the University of Pennsylvania. He pursues an interdisciplinary line of research in economics of education, school finance, and urban public policy focused particularly on policy effects experienced by disadvantaged students and the communities that serve them. In particular, Cameron uses quasi-experimental methods of analysis to examine how American governments at the local, state, and federal levels invest in inputs to K-12 public education, the largest public expenditure at the state and local levels. His prior work has examined equity and adequacy considerations in school finance reforms, technology integration in urban schools, and reforms to school discipline policies. His dissertation research examines school district debt issuance, credit constraints, and their relationships with school capital investments, investments which have been shown to improve a range of important public policy outcomes. Previously, Cameron earned a B.A. in Economics and an M.S.Ed. in Education Policy both from the University of Pennsylvania.