Federal Relief Funds Contributed to Academic Recovery Across the Country

When the first international test score assessment after the COVID-19 pandemic was released in December 2023, the results showed that the US experienced smaller COVID-19 era test score declines than many peer nations. A CEA issue brief suggested that the relative resilience of the US may have been due to the American Rescue Plan Elementary and Secondary Emergency Relief Fund (ARP ESSER) investment made by the Biden Administration, but noted that "it is too early still for research that establishes a causal link between funding and academic recovery from COVID-19 per se." Half a year later, there is now credible causal evidence that this money did indeed accelerate academic recovery.

Two new working papers highlight the impact of federal relief dollars on student learning: Dewey et al. (2024) and Goldhaber et al. (2024). In-line with previously published CEA work and a wide literature on the positive impacts of school spending (see Jackson and Mackevicius, 2024 for a recent review), both studies independently find that federal pandemic aid contributed substantially to academic recovery in the post-pandemic period. This blog will briefly explore the unprecedented federal funding allocated to K-12 schools in the wake of the COVID-19 pandemic and discuss new findings that highlight how these funds have aided the academic recovery process.

COVID-Era Lost Learning Time and ESSER Funding

Large and widespread achievement losses in the United States have been well documented using various datasets. Two standardized tests (the MAP Growth and the National Assessment of Educational Progress) indicate that, across tested grades, test scores declined by around 0.19 standard deviations (about 7.5 percentile points) in Math and 0.094 standard deviations (about 3.7 percentile points) in English Language Arts (ELA) between Spring 2019 and Spring 2022. As a crude metric, these declines are equivalent to the difference in performance associated with 4-7 months of regular learning in math and 2-3 months in reading. In other words, they represent significant and consequential losses.

Anticipating challenges, in March of 2021, the Biden-Harris Administration allocated $122 billion dollars to public K-12 school systems via ARP ESSER funds. These funds were the largest of three tranches of federal relief funding to schools (after $13.2 billion in March 2020 and $54 billion in December 2020), and were allocated with the goal of helping schools reopen safely while providing support to students and staff. Spent across five years, the allocated ARP ESSER funds would have represented an increase of roughly $40 billion in additional federal funding per year if spent equally across all three years. A past CEA issue brief estimated that these funds equated to roughly $1,000 per student annually, though distribution varied substantially across states and districts, providing well over $1,000 per pupil in districts with the most students qualifying for free or reduced-price lunch (Figure 1). These ESSER funds represent a historic 57 percent boost in Federal support for public schools above prepandemic levels. Even so, it is important to point out that relative to total public K-12 spending (which predominantly comes from state and local sources), this represents roughly a 5 percent increase.

The ESSER funds were more flexible than previous federal allocations because the impact of COVID-19 and local needs varied across districts. Prior work from the CEA has highlighted that schools used ESSER funds to safely reopen their doors: the original goal of ARP funding. This includes everything from staff salaries to digital learning resources to COVID-19 safety measures like HVAC upgrades (Figure 2). While one would expect many of these uses to improve student academic outcomes, some uses may have had other important benefits to students physical and overall well-being that are not necessarily reflected in standardized tests. Overall, the authors of new research find that this historic investment in public education was a key driver of academic recovery in the 2022-2023 school year.

The Causal Effects of ESSER Money

2023 academic year. Because ESSER money was not randomly distributed, the authors use a number of approaches to isolate the causal effects of ESSER money on student achievement. Across both studies, they find that each $1,000 in per pupil spending increased math scores by between 0.5 and 2 percent of a standard deviation and ELA scores by between 0.1 and 2 percent of a standard deviation - estimates that are in line with a meta-analytic average of causal evidence on school spending from the existing literature.

The distribution of aid dollars based on poverty levels means that the funding helped to close academic achievement gaps-exacerbated by the pandemic-between low- and high-poverty districts. In particular, Dewey et al. (2024) compare outcomes for a set of high poverty districts with relatively large ESSER allocations (more than $8,188 dollars per-pupil) to those of very similar districts with less ESSER funding. Using this approach, they find that each additional $1,000 in per pupil ESSER spending increased math and ELA scores by about 0.02 standard deviations. This suggests that for those districts that received over $8,000 per-pupil of ESSER money, test scores were more than 0.16 standard deviations higher (about 6 percentile points) than they would have been without the ESSER money. While initial test score losses were most pronounced in these high povertydistricts, the most pronounced recovery was also in the highest-poverty districts, and these test score gains are large and on a similar scale as the average COVID achievement losses - indicating that the ESSER funding made a considerable difference.

The magnitude of the estimated impacts in these studies indicate that this was money well spent. Jackson and Persico (2024) point out that school spending improves outcomes such as educational attainment in ways that are understated using test score effects alone. Using only the estimated effects on test scores from studies with very similar impacts as those documented for the ESSER funds, they calculate that, on average, each dollar spent generates about $1.20 in lifetime earnings. While it is too early to examine educational attainment effects of the ESSER spending, the fact that the test score effects are similar to those of existing work suggests that the educational attainment effect could also be similar. As such, a more accurate estimate (accounting for likely educational attainment effects) is that each dollar spent will generate about $2.50 in lifetime earnings. That is, while the long-run benefits will take time to materialize (as with all educational investments), the Biden-Harris Administration's investments in our children were likely well worth the expense.

Conclusions

The Biden-Harris Administration's unprecedented investment in U.S. public education and leadership has helped the U.S. navigate the COVID-19 pandemic and emerge relatively resilient compared to peer nations. Recent research indicates that test score gains in 2023 were larger than in a typical year before the pandemic and that students recovered approximately one-third and one quarter of the original achievement loss (between 2019 and 2022) in math and reading, respectively. Moreover, because larger amounts of ESSER funding went to low-income districts, the ESSER funds are helping to begin the narrowing of achievement gaps between high- and low-income districts. While the country is making progress, there remains work to do, and these recent research papers indicate that providing the financial resources to schools to implement proven strategies should be part of the toolkit. Recognizing this, the Biden-Harris Administration has made additional investments such as the $2 billion increase in Title I funding to date. This is just one piece of a broader effort to address the need for ongoing fiscal support for schools and districts-via recent budget proposals and efforts to strengthen existing programs-underscoring the President's commitment to our public schools.

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