Table 2

# The Effects of Results _−_ Based Financing on Test Scores (Clustered Standard Errors)

||Mathematics<br>5<sup>_th_ </sup>Grade<br>(1)|Portuguese<br>5<sup>_th_ </sup>Grade<br>(2)|Mathematics<br>9<sup>_th_ </sup>Grade<br>(3)|Portuguese<br>9<sup>_th_ </sup>Grade<br>(4)|
|---|---|---|---|---|
|**A. DD, Results**_−_**Based Financing (RBF)**|||||
|<sup>_rbf pre_</sup>|0_._036|0_._061<sup>_∗_</sup>|0_._155<sup>_∗∗∗_</sup>|0_._153<sup>_∗∗∗_</sup>|
|_β_ _−β_|(0_._040)|(0_._037)|(0_._026)|(0_._023)|
|**B. DD, RBF and Teaching Assistance**|||||
|_β_<sup>_rbf_+</sup><sup>_ta _</sup>_−β_<sup>_rbf_</sup>|0_._220<sup>_∗∗∗_</sup><br>(0_._029)|0_._162<sup>_∗∗∗_</sup><br>(0_._021)|||
|<sup>_rbf_(</sup><sup>_re_)+</sup><sup>_ta rbf_(</sup><sup>_re_)</sup>|||0_._148<sup>_∗∗∗_</sup>|0_._118<sup>_∗∗∗_</sup>|
|_β_ _−β_|||(0_._032)|(0_._028)|
|**C. DD, Results**_−_**Based Financing, re**|||||
|_β_<sup>_rbf_(</sup><sup>_re_)+</sup><sup>_ta _</sup>_−β_<sup>_rbf_+</sup><sup>_ta_</sup>|0_._170<sup>_∗∗∗_</sup><br>(0_._038)|0_._166<sup>_∗∗∗_</sup><br>(0_._032)|||
|<sup>_rbf_(</sup><sup>_re_)</sup> <sup>_rbf_</sup>|||0_._092<sup>_∗∗_</sup>|0_._096<sup>_∗∗∗_</sup>|
|_β_ _−β_|||(0_._035)|(0_._028)|
|**Baseline Diference** (_β_<sup>_pre_</sup>)|_−_0_._022|_−_0_._013|_−_0_._199|_−_0_._142|
||[0_._595]|[0_._738]|[0_._000]|[0_._000]|
|**Dif**(2007) _−_**Dif**(2005)|0_._069|0_._080|_−_0_._022|0_._018|
||[0_._512]|[0_._343]|[0_._891]|[0_._853]|
|**City/Student Controls**|Yes|Yes|Yes|Yes|
|**City**_−_**Specifc Time Trend**|Yes|Yes|Yes|Yes|
|**Border Fixed**_−_**Efects**|Yes|Yes|Yes|Yes|
|**# of Student Observations**|233_,_830|223_,_820|194_,_852|194_,_862|
|**Adj. R**_−_**squared**|0_._188|0_._247|0_._149|0_._185|

**Notes.** _∗∗∗_ denotes significance at 1 percent, _∗∗_ at 5 percent, and _∗_ at 10 percent level. This table shows the estimated impacts of the results _−_ based financing (RBF) reform on student test scores. Data on test scores is from the _Sistema de Avaliação da Educação Básica_ (SAEB), a national standardized exam undertaken by the federal government every two years. Importantly, SAEB is _not_ part of the RBF mechanism in _Ceará_ (instead, they use the state assessment called SPAECE) and for this reason is more appropriate to minimize potential gaming. All regressions restrict the sample to the first three immediate municipalities on each side of the border between _Ceará_ and adjacent states as shown in Figure 1. The municipality controls are: number of births in the municipality _−_ year ( _Sistema de Nascidos Vivos_ (SINASC)); a dummy for rural schools (from SAEB); and a dummy for schools offering grades 1 _−_ 9 (School Census). Student controls come from SAEB and include: a dummy if the student is male, if the student is white, age in years, number of bedrooms, if the mother has higher education and their household size. The estimates also include time trends and city-specific time trends. Border fixed-effects introduces dummies for each border between _Ceará_ and its adjacent states (see the different colors in Figure 1). By including these dummies, the regressions compare students at the same border instead of simply averaging test scores on both sides of the border. Panel A presents _DD_ estimates of _RBF_ impacts. Panel B refers to the effects after introducing the TA component. Panel C shows _DD_ estimates after the RBF formula included weights for the percentage of students below minimum thresholds of performance in Mathematics and Portuguese. The baseline difference at the border, _β_<sup>_pre_</sup> , and a parallel trend test estimating changes in the trends during pre-RBF periods is shown at the bottom of each column. Standard errors are clustered by municipality and shown in parenthesis. P _−_ values are shown in brackets.

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