Pathways to Inequality: Between-District Segregation and Racial Disparities in School District Expenditures

Recent causal evidence connects levels of per pupil spending and short- and long-term student outcomes. This evidence further suggests that specific types of spending may mediate the relationship between expenditures and student outcomes. Yet race remains related to funding disparities and schooling experiences in ways that raise concerns about the role of school finance in perpetuating racial opportunity gaps. We explore this potential source of educational inequality by asking how racial segregation and racial socioeconomic disparities are related to racial disparities in school district spending over time. We use 15 years of data from the School Funding Fairness Data System on school district expenditures and demographics to explore patterns of racial/ethnic segregation and racial/ethnic disparities across six categories of per pupil expenditures. We find that changes in racial/ethnic segregation within a state from 1999 through 2013 are associated with racial/ethnic disparities in spending, even after accounting for disparities in poverty.