From Crowded Classrooms to Empty Halls: How Enrollment Fluctuations Shape Students’ Academic Success

Abstract

This thesis examines how enrollment fluctuations influence student academic performance through changes in school funding. Using data from Massachusetts and North Carolina, I leverage quasi-random variation in per-pupil funding generated by enrollment changes — a key determinant of district budgets under state funding formulas. Employing both Ordinary Least Squares (OLS) and instrumental variable (IV) approaches, with distance to Boston and local population growth as instruments, I estimate the causal effect of enrollment shifts on student outcomes in Math and English Language Arts (ELA). While OLS results suggest a positive relationship between enrollment growth and test scores, IV estimates reveal smaller and often insignificant effects, indicating that simple correlations may be biased by unobserved factors. Panel regressions show that in Massachusetts, higher enrollment levels are associated with declines in test performance, likely due to overcrowding and resource strain. In contrast, North Carolina schools with more stable or growing enrollment see modest improvements in ELA scores, highlighting different policy challenges in shrinking versus growing districts. These findings underscore the need for tailored policy interventions to manage the consequences of enrollment volatility and ensure sustained educational quality.