Top heavy? On the allocative efficiency of small school districts

Abstract Policymakers tend to presume that small local education agencies (LEAs) are administratively top heavy, but indivisibilities at the classroom level could just as easily lead small LEAs to overuse teachers rather than administrators. This analysis uses an input distance function and administrative data on students, staff, and spending to estimate the technical and allocative efficiency of Texas public school districts. Our results suggest that small districts are no more likely to overuse administrators than to overuse teachers. Once likely determinants of inefficiency are taken into account, there is no relationship between school district size and the degree of allocative inefficiency. As such, our analysis casts doubt on the efficacy of efficiency rules of thumb that are common in public service practice.