Does School District Consolidation Cut Costs?

By William Duncombe, John M. Yinger. Education Finance and Policy, 2007

182 citations recorded by the source corpus.

Consolidation has dramatically reduced the number of school districts in the United States. Using data from rural school districts in New York, this article provides the first direct estimation of consolidation's cost impacts. We find economies of size in operating spending: all else equal, doubling enrollment cuts operating costs per pupil by 61.7 percent for a 300-pupil district and by 49.6 percent for a 1,500-pupil district. Consolidation also involves large adjustment costs, however. These adjustment costs, which are particularly large for capital spending, lower net cost savings to 31.5 percent and 14.4 percent for a 300-pupil and a 1,500-pupil district, respectively. Overall, consolidation makes fiscal sense, particularly for very small districts, but states should avoid subsidizing unwarranted capital projects.

Subfields: Economics and Econometrics, Education, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/832b407663be9800763aa2471a2f1958bf1eff2a