CEDE Seminar - Antonia Vazquez

Can investing in failing schools help them improve? This paper studies this question using a natural experiment based on a 2017 lawsuit settlement that allocated substantial resources to the lowest-performing schools in the Los Angeles Unified School District (LAUSD). Using a difference-in-differences design, I compare 50 secondary schools that received an increase of 13.5% on average in their annual budgets for three years, to nearby public, noncharter schools that received no settlement funding. The intervention mandated hiring of additional staff members and allocating of funds for professional development, but allowed discretionary spending on initiatives for high-need students. I find that, in line with the intent of the settlement, schools hired more personnel, including instructional staff such as teachers and counselors and support personnel such as paraprofessionals and school service staff, all effects statistically significant. Settlement schools achieved a 0.75 percentage points reduction in suspension rate relative to unfunded schools, reflecting a marked improvement in performance outcomes. These reductions were particularly notable given that the settlement triggered demographic sorting, with the treated schools losing students overall and shifting toward higher concentrations of economically disadvantaged students and lower Black enrollment. A simple bounding exercise that accounts for demographic sorting indicates that the settlement had meaningful effects on suspension rates, suggesting real improvements on noncognitive dimensions of schooling. Survey evidence suggests that two key mechanisms for lower suspensions were improvements to school climate as reported by staff and students, and enhancements to educators’ capacity and disciplinary approaches.