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Diane Publishing Books
Precarious Slope?: The Great Recession, Federal Stimulus, and New Jersey Schools
Rajashri Chakrabarti (au); Sarah Sutherland (au)
There is virtually no research that studies the effect of the Great Recession, or past recessions, on schools. This study begins to fill the void. Studying school funding during the recession is of paramount importance because schools have a fundamental role in fostering human capital formation and economic growth. The authors analyze how New Jersey school finances were affected during the Great Recession and the ARRA federal stimulus period. Their results show strong evidence of downward shifts in both revenue and expenditure following the recession. Federal stimulus seemed to have helped in 2010; however, both revenue and expenditure still declined. While total revenue declined, the various components of revenue did not witness symmetric changes. The infusion of funds with the federal stimulus occurred simultaneously with statistically and economically significant cuts in state and local financing, especially the former. Results also show a compositional shift in expenditures in favor of categories that are linked most closely to instruction, while several noninstruction categories, including transportation and utilities, declined. The analysis shows that high-poverty and urban districts sustained the largest falls in the post-recession era. Tables and figures. This is a print on demand report.
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