Three Essays on the Economics of Education

This dissertation examines topics of education finance and human capital investment. The first chapter estimates the causal effect of state intervention on fiscal performance of monitored school districts by using Illinois district-level administrative data. Utilizing the intervention system that provides technical assistance to only low-performing districts, I employ a regression discontinuity design based on financial indicators used to determine intervention status. Results indicate that there are precisely zero effects on districts’ future financial outcomes for the full sample. However, I document that because of the intervention treated elementary school districts are less reliant on issuing long-term debt to meet obligations. Additionally, the budget for treated accrual-basis districts is becoming more structurally balanced. The second chapter explores the long-term economic impact of children’s age at primary school entry on educational attainment and labor market outcomes. The paper documents that a one-year delay in primary school enrollment significantly increases years of schooling completed by roughly two years. In addition, delaying school entry increases the probability of being in the labor force for men, but decreases that for women. Further evidence suggests that the decline in female labor force participation is driven by both demand-side factors such as insufficient job opportunities in urban areas and labor market discrimination against female job seekers, and supply-side factors including fertility decision, childcare provision, and assortative mating. The third chapter investigates the causal impact of teacher quality on student academic performance and family investments in children. Using a nationally representative survey of middle school teachers, students, and their families, I exploit the random assignment of students to teachers and find that high-quality teachers, defined as having more teaching experiences, have positive impacts on students’ test scores. The impact is larger for teachers with more than twelve years of experience. Results on the impact on family investments show that experienced teachers are more helpful in increasing family investments on students’ academic performance, for example paying for private tutoring and devoting more time to assisting children with their homework. This provides evidence that teacher quality and family inputs are complements in the education production function that jointly increase student academic outcomes.