School finance policies don’t just affect the present-day classroom experience for students. They have a direct and measurable effect on how much those students learn and how much money they make later in life.
That’s the takeaway from new research showing that Jim Crow-era school funding laws in 20th-century Mississippi cost Black families significantly in terms of educational attainment and income decades after those policies were deemed illegal and immoral.
Researchers examined a system of school finance in the first half of the 20th century called an “equalization fund” that had a far different effect than the name suggests. Mississippi lawmakers offered supplemental school funding grants to some majority-white counties, which effectively used local decisionmaking power to send significantly less of the state aid to Black schools than to white schools, which were segregated.
Using archival Census data and interviews from 1940 and 2000, the research team compared the trajectories of Black students who attended school in majority-Black counties with Black students who attended schools in better funded, majority-white counties during the same period. For each additional dollar (in 1940s terms) of instructional spending per student each year, a student gained .09 years of educational attainment, and their income grew by 3 percent.
These findings might seem primarily useful as tools for understanding the past. But much of what unfolds in school finance today follows similar patterns to explicitly discriminatory policies like the one in Mississippi, said David Card, a professor and economist at the University of California, Berkeley who co-authored the paper and has extensively studied connections between education and earnings.
For instance, modern disparities in special education funding are magnified in districts in low-income areas, where rates of students with disabilities tend to be higher, Card said. When states and the federal government fail to adequately fund special education, districts are still obligated to fund those mandatory services with their own local dollars. Schools in low-income areas thus invest significant sums in special education, even though the rest of their students would also strongly benefit from greater investment.
“To what extent are the districts left trying to fund all the extra costs of the disability programs on the backs of other kids?” Card said.
Researchers say racism and school finance have been intertwined for generations
Card last month published the Mississippi study as a working paper along with three co-authors: Leah Clark, an economist for the U.S. Census Bureau; Ciprian Domnisoru, an economics professor at the Aalto University School of Business in Finland; and Lowell Taylor, a professor of economics at Carnegie Mellon University.
The study reinforces the idea that racial disparities in school finance policies aren’t merely byproducts of racial injustice in housing policy and elsewhere in society, said Esther Cyna, an associate professor of U.S. history and society at the Université de Versailles Saint-Quentin, Paris-Saclay.
Cyna studies the history of school finance, particularly in the American South, and is working on a book about Jim Crow-era school funding policies underlying the modern K-12 education system. Racism is embedded in school finance itself, Cyna contends.
“The policies we know to this day come from things that were established decades ago in the Jim Crow context,” Cyna said. “It’s important to remind people that finance and race are not two different things.”
She has noticed a consistent theme in her research: The concept of “separate but equal” is often a mirage, obscuring that equal opportunity for Black Americans often rested on white Americans’ definition of “equal.” For instance, Black teachers were paid proportionally to their qualifications or skills, but they had fewer opportunities to attain credentials that would lead to higher compensation.
Calculating the economic impact of unfair school finance policies on Black Americans
Mississippi’s “equalization” policy, and others like it, operated similarly.
Card said he first stumbled on the existence of such policies 30 years ago, when he was reading a publication by Horace Mann Bond, father of the civil rights activist Julian Bond, about K-12 schools in Alabama. There, too, fewer resources went to areas where most students were Black.
In Mississippi, the equalization policy came about because the state offered base education funding to counties according to the total number of children in the county, regardless of race. Local decisionmakers directed much of the funding they received to schools with mostly white students.
But counties with larger numbers of Black students had more money to work with, thus creating disparities between white schools in counties where few Black children lived and white schools in counties where many Black children lived.
To help even the score, the state created “equalization grants” geared toward counties whose white schools were funded at lower levels than those in peer counties that had more children overall.
Counties with few white residents tended not to receive these grants, even though their Black schools were funded at far lower levels than any white school.
“Each race has arrived to access something that is appropriate for their race,” Cyna said. “But who decides what is appropriate? It’s the white elite.”
Policies like the one in Mississippi began to fade in the mid-1940s, when the NAACP began signaling plans to file legal challenges, Card said. The specifics of the laws may have faded from memory, but their effects on the people who attended school under them remain vivid.
Researchers calculate that, for each student, "$20 of additional spending would have led to gains in income on the order of 50 percent or more—very large impacts that are indicative of serious under-investment in the education of Black Mississippians in the late 1930s and early 1940s,” the authors write.
Schools of education should teach future educators and superintendents about these historical realities in an effort to make them aware of patterns they should fight against, Cyna said. “You’ll find versions of this story through different policies and mechanisms pretty much anywhere,” she said.
In the meantime, Card said, other researchers could extend his team’s work to calculate what America might owe to Black citizens who were systemically barred from achieving high-quality education.
That would be in line with ongoing efforts in some states to study whether governments owe Black Americans reparations. In places like Loudoun County, Va., and Berkeley, Calif., schools are directly involved in that work.
In Mississippi, “it’s very clear they were ripped off by the system,” Card said.
