Education Reforms and Convergence in Student Performance: Evidence from Arkansas

Arkansas launched a series of far-reaching reforms in 2003 and 2004 aimed at promoting equity and adequacy of education. The education funding system has since directed considerably more school resources to economically disadvantaged and low-performing school districts. This study investigates whether a more equitable allocation of educational resources is followed by more equal student performance. In particular, we examine convergence in student achievements among Arkansas school districts from 2004-05 to 2013-14 academic years. Using traditional convergence tests, we find some degree of overall convergence. We further employ a novel clustering method developed by Phillips and Sul (2007, 2009) to detect convergence clubs. We find that instead of a full panel convergence, school districts' overall academic outcomes converged into three clubs, within which the member districts trend toward their club-specific equilibrium paths. Poorer districts and districts serving a larger proportion of non-white and male students are more likely to end up in the low-performing club. Our results suggest that school finance reforms can reduce but not eliminate student achievement gaps.