Using the PSID to study the effects of school spending

Many studies have examined the effects of school spending on educational at tainment, and the results have been mixed. Unfortunately, most of these stu dies have had limited information about the family and neighborhood charact eristics that may affect a student's educational attainment. This articles uses a unique data set that adds school-level data from the Common Core of Data to the rich source of family and neighborhood information of the Panel Study of Income Dynamics. It is found that school spending is positively r elated to the likelihood a student will graduate from high school and atten d college and to the student's years of schooling. III addition, the result s for high school graduation are sensitive to the inclusion of variables of ten not available in previous studies, suggesting that omitted-variables bi as may result in studies concluding that money does not matter when, indeed , school spending is important.