Substantial school spending cuts triggered by the Great Recession were associated with sizable losses in academic achievement for students living in counties most affected by the economic downturn, according to a new study published today in AERA Open, a peer-reviewed journal of the American Educational Research Association.

The estimated declines in student math and English language arts achievement in school districts with the most severe school spending cuts represent a loss of approximately 25 percent of the expected annual gains in achievement for students in grades 3 through 8, compared to their peers in the districts least affected by the Great Recession.

According to the study, conducted by scholars Kenneth Shores of Pennsylvania State University and Matthew Philip Steinberg of George Mason University, the steepest declines in expected math and English language arts achievement gains were in school districts serving the poorest students–districts where an average of 72 percent of students received free or reduced-price lunch–and in school districts serving the most African American students–39 percent African American, on average.

As a result, the authors note, the Great Recession was associated not only with declines in average academic achievement among counties most adversely affected by the Great Recession but also with increases in achievement gaps between poor and wealthy school districts and between school districts with many and few African American students.

“Our results reinforce what other recent studies have demonstrated: that there is a link between educational spending and student achievement,” said Shores, an assistant professor of human development and family studies at Pennsylvania State University. “What is different about this study is that we show that divestments in educational spending matter nearly as much for student achievement as do investments.”

For their study, the authors used a dataset consisting of test scores for 2,548 counties across the continental United States for the 2008-09 through 2014-15 school years, combining student achievement information from the Stanford Education Data Archive, demographic information from the U.S. Department of Education, and county-level economic data from multiple sources. The study sample includes test scores for 86 percent of the population of U.S. students who are annually tested in grades 3 through 8.

Although the authors found that the recession resulted in a decline in per pupil revenues of nearly $900 on average for the entire U.S., the consequences for school spending varied substantially among counties. Comparing counties with employment losses in the top and bottom quartiles, school spending declined at a faster rate in the hardest hit areas–by about $600 more per pupil per year–for the first two years of the recession (2007-08 to 2009-10).

In contrast, in the five years leading up to the start of the Great Recession in December 2007–that is, 2002-03 through 2007-08–changes in school spending differed little across the counties that were most and least affected by the downturn. After the recession hit, school spending continued to decline until the 2012-13 school year, but after the first two years, it declined at similar rates across the two groups of districts.

The resulting achievement gap between students in counties most and least affected by the recession persisted for more than three years following the 2009-10 school year.

“Our findings suggest that the first two years of differential declines in school spending were enough to put those hardest hit students at an academic disadvantage, even after spending levels began to increase,” Shores said.

“The Great Recession’s effects varied significantly among U.S. counties; yet the federal response, in the form of the American Recovery and Reinvestment Act of 2009, neglected this variation,” said Steinberg, an associate professor of education policy at George Mason University. “Our findings suggest that greater fiscal support should be targeted to schools that not only serve the most vulnerable student populations but that also are located in communities that are the most vulnerable to the adverse consequences of an economic recession.”

The study also found that achievement decreased more for older students than for younger students, a finding that surprised the authors. Prior evidence had found that divestments in resources for younger children tended to be more consequential than equivalent divestments for older children.

“While our data do not speak to this, one potential explanation is that teacher layoffs were concentrated in older grades,” Steinberg said. “If true, parents with older children would rightfully be concerned that schools’ responses to spending cuts were affecting those students disproportionately. Improving the understanding of how districts redistribute resources differently across schools and grades during periods of districtwide spending declines in the wake of recessionary events is an important line of future research.”