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School Finance 101: School Facilities Matter! In So Many Ways (How Could They Not?)

This post contains a brief summary on the importance of equitable and adequate school facilities – a topic unfortunately missing from my 2018 book. So here it is: 

I begin with a conceptual model of how investments in school facilities influence working conditions, employee (specifically teacher) attitudes and behaviors, student outcomes, including physical health and academic outcomes, and how investment in school facilities both directly and indirectly drives local housing and property values (Capitalization).  Figure 1 presents the conceptual model derived from the existing research on investment in school facilities. Investment in school facilities has both direct effects and indirect effects on student outcomes, and cyclical effects on local communities’ overall quality of life. 

Figure 1

Source: Constructed by author based on review of relevant literature herein

Regarding direct effects reflected in Figure 1: 

  • Higher quality and safer outdoor play spaces lead to improved student health, reducing absences and improving a wide array of short- and long-term student outcomes. 
  • Improved air and water quality from new and updated systems contribute positively to student and employee health. 
  • More consistent, higher quality lighting, heating and cooling systems contribute positively to student health (mental and physical) and academic outcomes. 

Regarding indirect effects on student outcomes: 

  • Newer, more efficient mechanical systems lead to reduced annual operating costs of facilities, permitting more money to be directed toward classroom instruction. 
  • Newer, more adequate and physically appealing facilities improve teacher satisfaction and retention (thus reducing the need to counterbalance bad working conditions with higher wages). 

Regarding cyclical effects on overall community quality of life and economic conditions, investment in school facilities can generally increase the quality of amenities accessible to a community including open play spaces, tracks for running, and perhaps even community meeting spaces, which enhance property values, which in turn increases the revenue raised by any given tax rate, to generate more revenue for schools and other public services. Further, investment in school facilities, which leads to improved school quality, can lead to increases in local property values. [1] Both are forms of “capitalization” of investments in schooling, where the former is more direct (influence of the amenity or facility itself) and the latter indirect (leveraged through improved student outcomes). [2]

Cellini and colleagues explore more directly the influence of passing local bond referenda for schools on home prices. [3] They find: 

Our results indicate that California school districts underinvest in school facilities: passing a referendum causes immediate, sizable increases in home prices, implying a willingness to pay on the part of marginal homebuyers of $1.50 or more for each $1 of capital spending. These effects do not appear to be driven by changes in the income or racial composition of homeowners, and the impact on test scores appears to explain only a small portion of the total housing price effect. (p. 215)

That is, they find stronger direct effect on capitalization than indirect effect (leveraged through test scores), but do find evidence of both effects.  

Facilities Investment and Achievement

Similarly, facilities and infrastructure investments have both direct and indirect influence on student outcomes. For example, a very recent study finds that “results consistently suggest that passing a bond measure increases achievement among low- but not high-SES students. However, these benefits for low-SES students are delayed and emerge 6 years after an election.”[4] That is, it takes time for bond measures to result in capital expenses resulting in fully equipped facilities. And extended exposure to those new facilities yields significant, long term positive effects. 

Another very recent study finds important effects of heat on student learning, and further that providing air condition can mitigate negative effects of heat: 

We demonstrate that heat inhibits learning and that school air-conditioning may mitigate this effect. Student fixed effects models using 10 million PSAT-retakers show hotter school days in years before the test reduce scores, with extreme heat being particularly damaging. Weekend and summer temperature has little impact, suggesting heat directly disrupts learning time. New nationwide, school-level measures of air-conditioning penetration suggest patterns consistent with such infrastructure largely offsetting heat’s effects. Without air-conditioning, a 1°F hotter school year reduces that year’s learning by one percent. Hot school days disproportionately impact minority students, accounting for roughly five percent of the racial achievement gap.[5]

In a study of 80 Virginia middle schools, Uline and Tschannen-Moran shed light on indirect influences of school facilities on student outcomes, finding: 

Results confirmed a link between the quality of school facilities and student achievement in English and mathematics. As well, quality facilities were significantly positively related to three school climate variables. Finally, results confirmed the hypothesis that school climate plays a mediating role in the relationship between facility quality and student achievement.

Our results revealed that when learning is taking place in inadequate facilities, there tends not to be as clear a focus on academics, and the learning environment is less likely to be perceived as orderly and serious. Where school buildings are shabby and inadequate, there is less likely to be the kind of community engagement that supports teaching and learning. Teacher attitudes and behaviors are related as well, as teachers are less likely to show enthusiasm for their jobs and to go the extra mile with students to support their learning when they teach in buildings they judge to be of poor quality.[6]

Ladd (2011) in a study of North Carolina public schools addresses similar indirect effects of school facilities, through their influence on teacher perceptions of working environment, noting that “For reading, teachers’ perceptions of facilities are also predictive of positive school effects.” [7] Maxwell (2016) finds that: “academic achievement is linked to building condition mediated by the social climate and student attendance.”[8]

In a recent review of studies of the influence of education investments on student outcomes, Kirabo Jackson provides a review of 7 specific studies pertaining to school facilities/infrastructure investment.  Jackson concludes that “[o]f the 7 studies identified, four are positive and three are null impacts. The fact that none were negative suggests that the average impact of capital spending is positive but that there may be considerable heterogeneity in that impact (and it may be zero in many cases).”[9]

Among the studies reviewed by Jackson, Neilson and Zimmerman using data on New Haven, CT public schools, specifically found: 

Taking advantage of the staggered implementation of a comprehensive school construction project in a poor urban district, we find that, by six years after building occupancy, $10,000 of per-student investment in school construction raised reading scores for elementary and middle school students by 0.027 standard deviations. For a student receiving the average treatment intensity this corresponds to a 0.21 standard deviation increase. School construction also raised home prices and public-school enrollment in zoned neighborhoods.[10]

The six-year time frame noted in this study matches that of the recent study by Rauscher (2019).

Facilities and Teachers’ Perceptions of Working Conditions

A handful of high-quality studies have explored in greater depth the role that facilities play in shaping teacher perceptions of and attitudes toward their working environments. Ladd, in her study of North Carolina schools find that “working conditions of the type on the NC survey are highly predictive of teachers’ career plans to leave schools” though the relationship to actual one-year departure rates was less clear.[13] Specifically at the elementary level “working conditions taken as a group are as predictive as the more commonly analyzed school characteristics” with respect to actual departure rates.[14]

One important factor regarding working conditions is the quality, or perceived quality of school facilities. Similarly, Loeb and colleagues in a study of California schools find:  

Although schools’ racial compositions and proportions of low-income students predict teacher turnover, salaries and working conditions-including large class sizes, facilities problems, multitrack schools, and lack of text-books are strong and significant factors in predicting high rates of turnover. Furthermore, when these conditions are taken into account, the influence of student characteristics on turnover is substantially reduced.[15]

Facilities and children’s health

A recent comprehensive review of studies on the connections between school facilities conditions and children’s health, compiled by the Harvard School of Public Health identifies seven areas of particular importance to children’s health and learning:[16]

  1. Ventilation and Indoor Air Quality 
  2. Water Quality 
  3. Thermal health
  4. Lighting and Views
  5. Acoustics and Noise
  6. Dust, Pests, Mold & Moisture
  7. Safety & Security


These findings are consistent with those addressed above.  The Harvard School of Public Health study also more expansively summarizes public health literature linking environmental factors to children’s and adult health, including workplace conditions. Put simply, healthier kids learn better, just as healthier adults are more productive in their workplace. Healthy work environments and school environments contribute positively to employee and student health, improving daily productivity on site and reducing absences from short term or chronic illnesses. 

Additional studies show that, among other factors, children’s exposure to air pollution may adversely affect both their health and educational outcomes.[17][18]  Exposure may be a function of the location of outdoor play spaces or of the quality of filtering and ventilation systems for interior air quality.  This includes exposure to mold, dust, mildew and other hazards which contribute to chronic asthma and increased rates of absence from school among affected children. 

Research from Denmark finds that accessibility of outdoor play spaces may also affect children’s health. Neilsen and colleagues find: 

The number of play facilities in the school grounds was positively associated with all measures of children’s activity. In preschool, every 10 additional play facilities the children had access to was associated with an increase in the average accelerometer counts of 14% in school time and 6.9% overall. For the children in third grade, access to 10 additional play facilities was associated with an increase in school time activity level of 26% and an increase in overall activity level of 9.4%. School playground area did not affect activity levels independently of the number of permanent play facilities.[19]  

[1] Figlio, D. N., & Lucas, M. E. (2004). What’s in a grade? School report cards and the housing market. American economic review94(3), 591-604.

[2] For example, Figlio and Lucas found that Florida’s school grading scheme significantly influenced housing values, even where grade distinctions from one district/school to another did not reflect real differences in school quality. Id.  The finding that the mere appearance of differences in quality influences housing markets is echoed in a number of studies. Id. at fn. 1, p.2.

[3] Cellini, S. R., Ferreira, F., & Rothstein, J. (2010). The value of school facility investments: Evidence from a dynamic regression discontinuity design. The Quarterly Journal of Economics125(1), 215-261.

[4] Rauscher, E. (2019). Delayed Benefits: Effects of California School District Bond Elections on Achievement by Socioeconomic Status, p. 1 (EdWorkingPaper No.19-18). Retrieved from Annenberg Institute at Brown University:

[5] Goodman, J., Hurwitz, M., Park, R.J., & Smith, J. (2019). Heat and Learning (EdWorkingPaper No.19-30). Retrieved from Annenberg Institute at Brown University:

[6] Uline, C., & Tschannen-Moran, M. (2008). The walls speak: The interplay of quality facilities, school climate, and student achievement. Journal of Educational Administration46(1), 55-73, at 66.

[7] Ladd, H. F. (2011). Teachers’ perceptions of their working conditions: How predictive of planned and actual teacher movement?. Educational Evaluation and Policy Analysis,33(2), 235-261.

[8] Maxwell, L. E. (2016). School building condition, social climate, student attendance and academic achievement: A mediation model. Journal of Environmental Psychology,46, 206-216, at 206.

See also: Whipple, S. S., Evans, G. W., Barry, R. L., & Maxwell, L. E. (2010). An ecological perspective on cumulative school and neighborhood risk factors related to achievement. Journal of Applied Developmental Psychology31(6), 422-427. (& )

[9] Jackson, C. K. (2018). Does School Spending Matter? The New Literature on an Old Question (No. w25368). National Bureau of Economic Research.

[10] Neilson, C. A., & Zimmerman, S. D. (2014). The effect of school construction on test scores, school enrollment, and home prices. Journal of Public Economics120, 18-31.

[11] Holden, K. L. (2016). Buy the book? Evidence on the effect of textbook funding on school-level achievement. American Economic Journal: Applied Economics, 100-127.

[12] Sara D. Adar et al., Adopting Clean Fuels and Technologies on School Buses: Pollution and Health Impacts in Children, 191 Am. J. Respiratory and Critical Care Med. 1413 (2015).

[13] Ladd, H. F. (2011). Teachers’ perceptions of their working conditions: How predictive of planned and actual teacher movement?. Educational Evaluation and Policy Analysis,33(2), 235-261.

[14] Id

[15] Luczak, L. D. H., & Loeb, S. (2013). How Teaching Conditions Predict: Teacher Turnover in California Schools. In Rendering School Resources More Effective (pp. 48-99). Routledge.

[16] Eitland et al., at 10-27. 

[17] Heissel, J., Persico, C., & Simon, D. (2019). Does Pollution Drive Achievement? The Effect of Traffic Pollution on Academic Performance (No. w25489). National Bureau of Economic Research.

Laquatra, J., Maxwell, L. E., & Pierce, M. (2005). Indoor air pollutants: Limited-resource households and child care facilities. Journal of Environmental Health67(7), 39-44.

[18] Frank, L. D., Sallis, J. F., Conway, T. L., Chapman, J. E., Saelens, B. E., & Bachman, W. (2006). Many pathways from land use to health: associations between neighborhood walkability and active transportation, body mass index, and air quality. Journal of the American planning Association72(1), 75-87.

[19] Nielsen, G., Bugge, A., Hermansen, B., Svensson, J., & Andersen, L. B. (2012). School playground facilities as a determinant of children’s daily activity: a cross-sectional study of Danish primary school children. Journal of Physical Activity and Health9(1), 104-114.

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Bruce D. Baker

Bruce Baker is Professor in the Graduate School of Education at Rutgers University. His primary areas of research include elementary and secondary education finan...