TY  - JOUR
AU  - Ferraz,Claudio
AU  - Finan,Frederico
AU  - Moreira,Diana B.
TI  - Corrupting Learning: Evidence from Missing Federal Education Funds in Brazil
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18150
PY  - 2012
Y2  - June 2012
UR  - http://www.nber.org/papers/w18150
L1  - http://www.nber.org/papers/w18150.pdf
N1  - Author contact info:
Claudio Ferraz
Department of Economics
PUC-Rio
Rio de Janeiro, RJ, 22453-900
Brazil  
E-Mail: cferraz@econ.puc-rio.br

Frederico Finan
Department of Economics
University of California
508-1 Evans Hall #3880
Berkeley, CA 94720-3880
Tel: 310/794-5958
Fax: 310/825-9528
E-Mail: ffinan@econ.berkeley.edu

Diana B. Moreira
Department of Economics and Harvard Business Schoo
Harvard University
Cambridge , MA 02138
E-Mail: dmoreira@fas.harvard.edu
AB  - This paper examines if money matters in education by looking at whether missing resources due to corruption affect student outcomes. We use data from the auditing of Brazil’s local governments to construct objective measures of corruption involving educational block grants transferred from the central government to municipalities. Using variation in the incidence of corruption across municipalities and controlling for student, school, and municipal characteristics, we find a significant negative association between corruption and the school performance of primary school students. Students residing in municipalities where corruption in education was detected score 0.35 standard deviations less on standardized tests, and have significantly higher dropout and failure rates. Using a rich dataset of school infrastructure and teacher and principal questionnaires, we also find that school inputs such as computer labs, teaching supplies, and teacher training are reduced in the presence of corruption. Overall, our findings suggest that in environments where basic schooling resources are lacking, money does matter for student achievement.
ER  -