What the evidence says
The cost literature converges on a U-shaped relationship between district size and per-pupil spending: costs fall as districts grow from very small enrollments, bottom out at a mid-size enrollment, then rise again at the largest sizes. Duncombe's 1995 cross-sectional cost model of 610 districts puts the minimum at 6,500 pupils, with total per-pupil costs dropping 27% moving from 50-pupil to 500-pupil districts and only 8% higher at 50,000 pupils than at the cost-minimizing point. Administrative costs drive most of the early decline — a 73% drop per pupil between the smallest districts and a 500-pupil district — while transportation costs form their own U-shape, bottoming at 1,100 pupils and ending up higher at 50,000 pupils than at 50. Duncombe's 2007 panel study, which tracks actual consolidations using district fixed effects and time trends "holding student performance constant," finds a similar U-shape for operating costs with a minimum at 4,699 pupils, and confirms that doubling district enrollment cuts administrative costs per pupil by over one-third. When districts actually merge, the realized savings scale down with size: operating costs decrease 22% for two 300-pupil districts merging versus 8% for two 1,500-pupil districts, and total costs decrease more than 20% for two 300-pupil districts, 7–9% for two 900-pupil districts, and close to 0% for two 1,500-pupil districts.
Which districts merge, and why, follows a distinct pattern in Gordon's Iowa study. Small districts are more likely to merge than larger ones, and districts that are demographically or administratively similar merge with each other more than dissimilar ones — both consistent with economies-of-scale reasoning, though the paper does not quantify these probability increases. State financial incentives increased merger activity directly: Iowa consolidations rose from zero to three per year through 1990 to four in 1991, seven in 1992, and twenty in 1993 once bonuses took effect, and every merger during that 1991–1993 subsidy window involved at least one district with enrollment below 600. Over the study period the number of Iowa districts fell from 430 to 371, a 13.7% decline. Klein's matching-model study of Hungarian district consolidation measures a different outcome — student welfare from school assignment — and finds that 73% of matched students benefit while fewer than 3% end up assigned to a less-preferred school; the aggregate welfare gain is equivalent to attending a school five kilometers closer to home. Those gains are not evenly distributed: students from smaller, less over-demanded districts and students with higher academic ability benefit more than the average student. Consolidation is not always a one-way street administratively — separately, communities in the U.S. have attempted to secede from their school district 128 times, succeeding 73 of those times.
School closure — a policy adjacent to consolidation in that it removes a physical school rather than an administrative boundary — carries a distinct and gendered cost. Hannum's difference-in-differences study finds that girls exposed to closure during primary-school ages complete 0.60 fewer years of schooling by age 17, on average, with no corresponding measured effect for boys. Averaged across children who were 10–13 years old at the time of closure, overall educational attainment decreases by 0.42 years, a figure that masks the underlying gender split. The effect is not immediate: girls show no measured impact in the first 0–3 years after closure, a 0.56-year decrease 4–6 years after, and a 0.77-year decrease 7–12 years after. A parallel, non-causal association reinforces a distance mechanism for girls specifically: each additional kilometer to school is associated with a 1.1 percentage point decrease in girls' enrollment, while boys' enrollment shows no significant association with distance. Facility quality runs the opposite way by gender — boys' enrollment increases when the nearest school has better facilities, while girls' enrollment shows no measured response to facility quality.
The sources here do not measure student academic achievement or test scores as an outcome of consolidation — the cost studies hold performance constant by design rather than report how it changes, and no claim below reports a test-score or achievement effect. Similarly, no source measures fiscal effects of consolidation beyond roughly a decade after merger, or effects of school district consolidation policy itself (as opposed to the related but distinct policy of school closure) on attainment.