In 1996, New York State began requiring all graduating high school students (starting with the Class of 1999) to pass rigorous end-of-course exams in five subjects. This study explores whether high school resources have been reallocated in the wake of these new standards and whether reallocation patterns differ among high- and low-graduation-rate schools. Using a six-year panel of school-level data, we model resources as a function of school and student characteristics, school graduation rates, and school fixed effects. Regression analyses reveal increases in direct services spending, while the percentage of more experienced and educated teachers fell. We find little evidence, though, of differential patterns related to graduation rates, with the exception of teacher licensure and nonpersonnel expenditures. The findings suggest that schools may have limited ability to redeploy nonteacher resources in the short term. While other funds may be reallocated, these represent a small share of total school resources.

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