South Dakota decided last year that any school district that dipped below 100 students would have to merge. The Economist notes that enrollment in the state's schools had declined 94% over the previous ten years. (See chart above.) Ten S.D. districts have already been set for merger.

The magazine reviews the "contentious" history of school consolidation in the U.S. In 1939, there were 117,000 school districts in the country; now there are just over 14,000. School district mergers have been fought all along, recently in North Dakota and today in Maine. Small districts contend they do a better job of educated students than large districts.

"But the debate over rural schools hides a sad irony," the magazine notes. "The better a small town educates its pupils, the more likely they are to seek jobs elsewhere. According to a study by Pennsylvania State University, returns to investment in human capital are much lower in rural areas than in urban ones."