This study evaluates the effect that the size of a state's school districts has on public high school graduation rates. The authors calculate the graduation rate over the last decade and examine the relationship between these graduation rates and changes in each state's average school district size.
The study finds that decreasing the size of school districts has a substantial and statistically significant positive effect on graduation rates. Conversely, consolidation of school districts into larger units leads to more students dropping out of high school. The results of the analysis indicate that decreasing the average size of a state's school districts by 200 square miles leads to an increase of about 1.7 percentage points in its graduation rate. This finding is particularly important for states with very large school districts. For example, if Florida decreased the size of its school districts to the national median, it would increase its graduation rate from 59% to 64%.
Decreasing the size of school districts could improve educational outputs, including graduation rates, because it would increase the choice that parents have in the school system that educates their child. By making it easier to relocate from one school system's jurisdiction to the next, smaller school districts make it possible for a larger number of families to exercise choice among different school districts. The more families are able to move from district to district, the less students can be taken for granted by schools, which, for a variety of reasons, don't want to lose enrollment. This study provides empirical evidence that increasing the choice parents have in their child's school district contributes to higher public high school graduation rates.