-
Ahlin, Åsa and Eva Johansson (2001).
Individual Demand for Local Public Schooling: Evidence from Swedish Survey Data.
In: International Tax and Public Finance
8(4)
, 331-351
.
Abstract.
Link.
In this paper we investigate the demand for local public school expenditures in Sweden using survey data, a method previously never applied to Swedish data. We compare our results to those of earlier US studies, where the same method is used in a different institutional setup. Estimating a linear demand specifica-tion, we find that demand is inelastic with respect to income and taxprice, much in line with previous Swedish findings in a median voter framework. Estimation of a log-linear demand specification indicates that the elasticities of demand for schooling are higher in Sweden than in the US. Testing the hy-pothesis that municipal employees tend to have a higher demand for public spending than others, we conclude that income, as well as taxprice and grants, enters the demand function differently for the two groups of employees. [close]
-
Ahlin, Åsa and Eva Mörk (2005).
Effects of decentralization on school resources.
In: Economics of Education Review
27(3)
, 276-284
.
Abstract.
Link.
Sweden has undertaken major national reforms of its school sector, which, consequently, has been classified as one of the most decentralized ones in the OECD. This paper investigates whether local tax base, grants, and preferences affected local school resources differently as decentralization took place. We find that municipal tax base affects per pupil spending in the same way regardless of whether the school sector is centralized or decentralized, but has a smaller effect on teacher–pupil ratio after the reforms. The less-targeted grants are the fewer teachers per pupil do the municipalities employ. The results for local preferences are less clear-cut. [close]
-
Alesina, Alberto, Reza Baqir and Caroline M. Hoxby (2004).
Political jurisdictions in heterogeneous communities .
In: Journal of Political Economy
112(2)
, 348-396
.
Abstract.
Link.
We investigate whether political jurisdictions form in response to the trade-off between economies of scale and the costs of a heterogeneous population. We consider heterogeneity in income, race, ethnicity, and religion, and we test the model using American school districts, school attendance areas, municipalities, and special districts. We find strong evidence of a trade-off between economies of scale and racial heterogeneity; we also find evidence of a trade-off between economies of scale and income heterogeneity. Conversely, we find little evidence that ethnic or religious heterogeneity shapes jurisdictions. To clarify the direction of causality between heterogeneity and jurisdictions, we exploit shocks to racial heterogeneity generated by the two world wars. [close]
-
Andrews, Matthew, William Duncombe and John Yinger (2002).
Revisiting Economics of Size in American Education: Are We Any Closer To a Consensus?.
In: Economics of Education Review
21(3)
, 245-262
.
Abstract.
Link.
Consolidation remains a common policy recommendation of state governments looking to improve efficiency, especially in rural school districts. However, state policies encouraging consolidation have increasingly been challenged as fostering learning environments that hurt student performance. Does the empirical research on economies of size support for this policy? The objective of this paper is to define the factors affecting economies of size and update the literature since 1980. The best of the cost function studies suggest that sizeable potential cost savings in instructional and administrative costs may exist by moving from a very small district (500 or fewer pupils) to a district with ca 2000–4000 pupils. The findings from production function studies of schools are less consistent, but there is some evidence that moderately sized elementary schools (300–500 students) and high schools (600–900 students) may optimally balance economies of size with the potential negative effects of large schools. Since program evaluation research on school consolidation is limited, it is time for researchers on both sides of this debate to make good evaluation research on consolidation a high priority. In addition, the potential diseconomies of size in large central city school districts needs increased attention in academic research. [close]
-
Ashenfelter, Orley (1977).
Demand and Supply Functions for State and Local Government Employment: the Effect of Federal Grants on Nonfederal Governmental Wages and Employment.
New York:
John Wiley & Sons
.
[close]
-
Baicker, Katherine and Nora Gordon (2006).
The Effect of State Education Finance Reform on Total Local Resources.
In: Journal of Public Economics
90(8)
, 1519-1534
.
Abstract.
Link.
Both the federal government and the states use intergovernmental grants to try to change the composition of local spending across different programs, as well as the distribution of resources across localities. Many states are now under court order to use state education grants to reduce local disparities in education spending. While a substantial body of literature suggests that these court orders increase the level and progressivity of state education spending, there is little evidence on their broader effects on the total resources available not just for schools in low-income districts, but for other programs across all localities. We find that states finance the required increase in education spending in part by reducing their aid to localities for other programs, particularly for wealthier areas. Thus, while court-ordered school finance equalizations do increase total state aid to localities for education, they do so at the expense of drawing state intergovernmental aid away from programs like public welfare, health, hospitals, and general services. These findings provide insight into the effectiveness of using earmarked funds to achieve redistribution. [close]
-
Barrow, Lisa and Cecilia Elena Rouse (2004).
Using market valuation to assess public school spending.
In: Journal of Public Economics
88(9)
, 1747-1769
.
Abstract.
Link.
We examine whether school expenditures are valued by potential residents and whether the current level of public school provision is inefficient by estimating the effect of state education aid on residential property values. We find evidence that, overall, state aid is valued by potential residents and that school districts do not overspend on education. However, we find that districts may overspend in areas where residents have fewer schooling options but find no difference in efficiency by the degree of district unionization. One interpretation of these results is that increased competition may reduce overspending on public schools in some areas. [close]
-
Bearse, Peter, Buly A. Cardak, Gerhard Glomm and B. Ravikumar (2013).
Why do education vouchers fail at the ballot box?.
In: European Journal of Political Economy
32
, 26-37
.
Abstract.
Link.
We examine quantitatively why uniform vouchers have repeatedly suffered electoral defeats against the current system where public and private schools coexist. We argue that the topping-up option available under uniform vouchers is not suficiently valuable for the poorer households to prefer the uniform vouchers to the current mix of public and private education. We then develop a model of publicly funded means-tested education vouchers where the voucher received by each household is a linearly decreasing function of income. Public policy, which is determined by majority voting, consists of two dimensions: the overall funding level (or the tax rate) and the slope of the means testing function. We solve the model when the political decisions are sequential-households vote first on the tax rate and then on the extent of means testing. We establish that a majority voting equilibrium exists. We show that the means-tested voucher regime is majority preferred to the status-quo. These results are robust to alternative preference parameters, income distribution parameters and voter turnout. [close]
-
Bergstrom, Theodore, Daniel Rubinfeld and Perry Shapiro (1982).
Micro-based Estimates of Demand Functions for Local School Expenditures.
In: Econometrica
50(5)
, 1183-1205
.
Abstract.
Link.
We devise and apply a new method for estimating demand for local public goods from survey data. Individuals' responses to questions about whether they want more or less of various public goods are combined with observations of their incomes, tax rates, and of actual spending in their home communities to obtain estimates of demand functions. This estimation technique requires no "median voter" assumptions. Functions estimated in this way can be much richer in detail than estimates obtained from aggregate cross-section studies and allow one to distinguish between the effects of individual characteristics and the effects of the character of one's home jurisdiction on demand. Estimates of the effects of income and price turn out to be quite similar to those found in aggregate studies. [close]
-
Bettinger, Eric P. (2012).
Paying to Learn: The Effect of Financial Incentives on Elementary School Test Scores.
In: Review of Economics and Statistics
94(3)
, 686-698
.
Abstract.
Link.
Policymakers and academics are increasingly interested in applying financial incentives to individuals in education. This paper presents evidence from a pay-for-performance program taking place in Coshocton, Ohio. Since 2004, Coshocton has provided cash payments to students in grades 3 through 6 for successful completion of their standardized testing. Coshocton determined eligibility for the program using randomization. Using this randomization, this paper identifies the effects of the program on students' academic behavior. We find that math scores improved about 0.15 standard deviations but that reading, social science, and science test scores did not improve. [close]
-
Betts, Julian R., Kim S. Reuben and Anne Danenberg (2000).
Equal Resources, Equal Outcomes? The Distribution of School Resources and Student Achievement in California.
San Francisco:
Public Policy Institute of California
.
Abstract.
Link.
Court decisions and unrelated legislation emanating from voter initiatives such as Proposition 13 have centralized the funding of California's public school system. A common perception is that this centralization has equalized spending across districts, but the latest research shows that this is not the case. The authors examine the effects of variations in resources across districts in great detail, addressing two principal questions: First, how do school resources-measured in terms of teachers' education, credentials, and experience; class size; and curriculum-vary between schools? Second, do existing inequalities in school resources create inequalities in student achievement? In their analyses of the distribution of school resources and of the link between student achievement and resources, the authors take account of the separate and possibly confounding influences of students' socioeconomic status and school location. [close]
-
Blankenau, William F., Nicole B. Simpson and Marc Tamljanovich (2007).
Public Education Expenditures, Taxation, and Growth: Linking Data to Theory.
In: American Economic Review
97(2)
, 393-397
.
Abstract.
Link.
Governments around the world have taken a prominent role in financing education. While justifications for this involvement are varied, a common motivation is that education expenditures are a key to sustained economic growth. Economic theory provides a foundation for this belief. Many papers in the endogenous growth literature have formalized a link between public education expenditures, human capital accumulation and long-run growth. While theory assigns public education expenditures a key role in growth, empirical support of the link is mixed. As highlighted by William F. Blankenau and Nicole B. Simpson (2004), the disconnect between theory and data can be reconciled by taking a closer look at the theory. In nearly every model where growth is fueled by public education expenditures, a nonmonotonic relationship between expenditures and growth can arise. Public education spending increases growth while taxes may decrease growth, leaving the net effect ambiguous. Thus economic theory shows that to identify the growth effects of expenditures, one must account for any offsetting effects of the requisite taxation. However, most empirical investigations of these effects do not explicitly control for the method of finance. In contrast, we make the relationship between expenditures, taxation and growth central to our analysis. We estimate a growth equation which arises from a fully specified theoretical model where public education expenditures matter for growth. A key innovation is that the regression accounts for the general equilibrium adjustment to the taxes levied in support of education. Using panel data from 23 developed countries over the period 1960-2000, we find a positive relationship between public education expenditures and long-run growth only when controlling for the government budget constraint. An interpretation of these results is that studies which fail to control for the method of finance underestimate the role of public education expenditures. A statistically insignificant coefficient in such analyses may indicate a positive growth effect of expenditures that is offset by the negative consequences of taxation. [close]
-
Booij, Adam, Edwin Leuven and Hessel Oosterbeek (2012).
The role of information in the take-up of student loans.
In: Economics of Education Review
31(1)
, 33-44
.
Abstract.
Link.
We study student loan behavior in the Netherlands where (i) higher education students know little about the conditions of the government's financial aid program and (ii) take-up rates are low. In a field experiment we manipulated the amount of informationstudents have about these conditions. The treatment has no impact on loan take-up, which is not due to students already having decided to take a loan or students not absorbing theinformation. We conclude that a lack of knowledge about specific policy parameters does not necessarily imply a binding information constraint. [close]
-
Borck, Rainald and Martin Wimbersky (2014).
Political economics of higher education finance.
In: Oxford Economic Papers
66(1)
, 115-139
.
Abstract.
Link.
We study voting over higher education finance in an economy with risk averse households who are heterogeneous in income. We compare four different systems and analyse voters’ preferences among them: a traditional subsidy scheme, a pure loan scheme, income contingent loans and graduate taxes. Using numerical simulations, we find that the poor prefer the subsidy scheme over the other systems, even though they pay part of the taxes. We also find that majorities for income contingent loans or graduate taxes become more likely as risk aversion rises or the income distribution gets more equal. [close]
-
Borge, Lars-Erik and Jørn Rattsø (1995).
Demographic Shift, Relative Costs and the Allocation of Local Public Consumption in Norway.
In: Regional Science and Urban Economics
25(6)
, 705-726
.
Abstract.
Link.
Local government responses to shifting demand and supply conditions are investigated. The desired allocation of local public consumption is determined in a voter group decision model where different age groups compete for services within an exogenous budget constraint. The model is implemented in an AIDS demand system built into a partial adjustment framework. The estimates indicate that the dramatic shift in the age composition of the population from the young to the elderly during the period studied has led to higher educational spending per pupil and less health care services per elderly. Age groups in decline are able to resist reallocations and gain in terms of spending per head. [close]
-
Boyd, Donald, Hamilton Lankford, Susanne Loeb and James Wyckoff (2008).
The Impact of Assessment and Accountability on Teacher Recruitment and Retention: Are There Unintended Consequences?.
In: Public Finance Review
36(1)
, 88-111
.
Abstract.
Link.
This article uses data on every teacher in New York State public elementary schools from 1994-1995 through 2001-2002 to examine the response of teachers to the implementation of state-mandated testing. The authors ask whether the introduction of testing in the fourth grade has increased the turnover of fourth-grade teachers, whether testing differentially affected the decisions of teachers with particular attributes, and whether the characteristics of teachers entering the fourth grade changed with the introduction of testing. The authors find that the turnover rate of fourth-grade teachers decreased relative to teachers in other elementary grades since testing began. In addition, entering fourth-grade teachers are less likely to be inexperienced teachers than those moving into other elementary school grades. [close]
-
Brasington, David (1999).
Joint Provision of Public Goods: The Consolidation of School Districts.
In: Journal of Public Economics
73(3)
, 373-393
.
Abstract.
Link.
A new methodological approach investigates the factors that cause and inhibit political jurisdictions from jointly providing public services. Previous statistical approaches study whether consolidation occurs but are incapable of exploring with whom it occurs. The Poirier bivariate probit analysis suggests population and property value factors matter more than socio-demographic factors in determining whether two neighboring entities will form a consolidated school district. Small and large districts merge with each other, while medium-sized communities tend not to merge. Contrary to prior studies, neither racial composition, income levels, nor hypothetical school quality has a statistically significant effect on the probability of merging. [close]
-
Bruckmeier, Kerstin and Berthold U. Wigger (2014).
The effects of tuition fees on transition from high school to university in Germany.
In: Economics of Education Review
41
, 14-23
.
Abstract.
Link.
This paper studies whether the introduction of tuition fees at public universities in some German states had a negative effect on enrollment, i.e., on the transition of high school graduates to public universities in Germany. In contrast to recent studies, we do not find a significant effect on aggregate enrollment rates. Our study differs from previous studies in three important ways. First, we take full account of the fact that tuition fees were both introduced and abolished in the German states at different points in time. Second, we consider control variables, which are absent in previous studies but turn out to have a significant impact on the evolution of enrollment rates. Third, we allow for state-specific effects of tuition fees on enrollment rates. We conclude that there is no evidence for a general negative effect of the recent introduction of tuition fees on enrollment in Germany. [close]
-
Brunner, Eric and Ed Balsdon (2004).
Intergenerational conflict and the political economy of school spending.
In: Journal of Urban Economics
56(2)
, 369-388
.
Abstract.
Link.
In this paper we use survey data to examine support among voters from different age cohorts for public school spending. The survey asked potential voters in California how they intended to vote on two initiatives, one a statewide initiative that would increase spending on public schools throughout the state and the other a local initiative that would increase spending only in the respondent’s local school district. We find that older voters without children generally oppose increases in state spending but are much more willing to support local spending. We examine two explanations for this voting pattern, namely the capitalization of local spending into housing values and intergenerational altruism. Our results do not strongly favor one explanation over the other. Consequently, we conclude that both factors (capitalization and intergenerational altruism) probably play important roles in sustaining support among older voters for local school spending. [close]
-
Brunner, Eric and Jon Sonstelie (2003).
School Finance Reform and Voluntary Fiscal Federalism.
In: Journal of Public Economics
87(9-10)
, 2157-2185
.
Abstract.
Link.
California has transferred the financing of its public schools from localities to the state. In response, many families have supplemented the tax revenue of their local public schools with voluntary contributions. This paper analyzes that phenomenon. We propose a model of partial cooperation among parents in making voluntary contributions to their public schools. Under reasonable conditions, the model predicts that contributions per pupil should decline with school size. We estimate this relationship using data on contributions to California schools. Our estimates reveal that contributions per pupil do decline with size; however, the rate of decline is surprisingly slow. [close]
-
Burnell, Barbara (1991).
The Effect of School District Structure on Education Spending.
In: Public Choice
69(3)
, 253-264
.
Abstract.
Link.
This paper develops a theoretical and empirical model of local spending on education that analyzes the effect of institutional structure on education spending. It attempts to determine whether the theory of bureaucratic behavior is consistent with school-district spending decisions by testing the hypothesis that the number of school districts in a county has a negative effect on per pupil expenditures. The results are not consistent with the theory, but indicate that a fragmented school-district structure serves to increase expenditures. [close]
-
Burstzyn, Leonoardo (2016).
Poverty and the Political Economy of Public Education Spending: Evidence from Brazil.
In: Journal of the European Economic Association
14(5)
, 1101-1128
.
Abstract.
Link.
A large body of literature has emphasized the elite capture of democratic institutions as the explanation for the low levels of spending on public education in many low‐income democracies. This paper provides an alternative to that longstanding hypothesis. Motivated by new cross‐country facts and evidence from Brazilian municipalities, we hypothesize that many democratic developing countries might invest less in public education spending because poor decisive voters prefer the government to allocate resources elsewhere. One possible explanation is that low‐income voters could instead favor redistributive programs that increase their incomes in the short run, such as cash transfers. To test for this possibility, we design and implement an experimental survey and an incentivized choice experiment in Brazil. The findings from both interventions support our hypothesis. [close]
-
Campbell, Colin and William Fischel (1996).
Preferences for School Finance Systems: Voters versus Judges.
In: National Tax Journal
49(1)
, 01-15
.
Abstract.
Link.
This paper examines a theory that urges judges to decide, as in Serrano v. Priest, that locally financed school systems are unconstitutional. The theory holds that courts must implement reforms because the legislative process is dominated by “property-rich” communities. A New Hampshire legislator ran for governor in 1992 on a property tax and school finance reform platform after it had narrowly failed in the legislature. Regression analysis shows that the candidate’s fiscal platform was decisive in her loss. We conclude that propertyrich districts are not unduly influential in maintaining a system that relies heavily on the property tax. [close]
-
Card, David and A. Abigail Payne (2002).
School Finance Reform, the Distribution of School Spending and the Distribution of Student Test Scores.
In: Journal of Public Economics
83(1)
, 49-82
.
Abstract.
Link.
This paper studies the effect of school finance reforms on the distribution of school spending across richer and poorer districts, and the consequences of spending equalization for the relative test performance of students from different family backgrounds. We find that states where the school finance system was declared unconstitutional in the 1980s increased the relative funding of low-income districts. Increases in the amount of state aid available to poorer districts led to increases in the spending of these districts, narrowing the spending gap between richer and poorer districts. Using micro samples of SAT scores from this same period, we then test whether changes in spending inequality affect the gap in achievement between different family background groups. We find evidence that equalization of spending leads to a narrowing of test score outcomes across family background groups. [close]
-
Chambers, Jay (1977).
The Impact of Collective Bargaining for Teachers on Resource Allocation in Public School Districts.
In: Journal of Urban Economics
4(3)
, 324-339
.
Abstract.
Link.
This paper presents a theoretical and empirical evaluation of the impact of teacher bargaining on the demand for school inputs, the compensation of school personnel, and the level of educational expenditure in public school districts. It is demonstrated that the major impact of bargaining for teachers has been on a regional rather than on a district by district level, and, contrary to the results of previous studies, bargaining does appear to have a substantial and significant effect on teachers' salaries. The empirical analysis is carried out on a sample of public school districts located in the state of California. [close]
-
Chapman, Bruce, and Mathias Sinning (2014).
Student loan reforms for German higher education: financing tuition fees.
In: Education Economics
22(6)
, 569-588
.
Abstract.
Link.
It is generally agreed that the funding base for German universities is inadequate and perhaps the time has come for serious consideration of the imposition of nontrivial tuition charges. This article compares conventional and income contingent loans (ICLs) for financing tuition fees at German universities. Two aspects are considered: the size of repayment burdens associated with mortgage-style loans, and the time structure of revenue to the government from a hypothetical ICL. We find that tuition fees could increase considerably with the use of an ICL system similar to policy approaches used in Australia, England and New Zealand. [close]
-
Chaudhary, Latika (2009).
Education inputs, student performance and school finance reform in Michigan.
In: Economics of Education Review
28(1)
, 90-98
.
Abstract.
Link.
This paper estimates the impact of the Michigan school finance reform, Proposal A, on education inputs and test scores. Using a difference-in-difference estimation strategy, I find that school districts in Michigan used the increase in educational spending generated through Proposal A to increase teacher salaries and reduce class size to a smaller extent. Then, using the foundation allowance created by Proposal A as an instrument, I estimate the causal effect of increased spending on 4th and 7th grade math scores for two test measures – a scaled score and a percent satisfactory measure – and find positive effects of increased spending on 4th grade test scores. A 60% increase in spending increases the percent satisfactory score by one standard deviation. The positive impact of expenditures on test performance seems largely due to higher teacher salaries. [close]
-
Coen-Pirani, Daniele (2011).
Immigration and spending on public education: California, 1970-2000.
In: Journal of Public Economics
95(11-12)
, 1386-1396
.
Abstract.
Link.
The evolution of education spending in California has received plenty of attention from both academics and practitioners after this state's education finance reform in the 1970's. This paper quantifies the contribution of immigration to the relative decline in elementary and secondary public education spending per student in California in the period 1970–2000. A quantitative model of school choice and voting over public education is used to perform the counterfactual experiments of interest. The model predicts that education spending per student in California would have been 24% higher in the year 2000 if U.S. immigration had been restricted to its 1970 level. [close]
-
Colegrave, Andrew and Margaret J. Giles (2008).
School cost functions: A meta-regression analysis.
In: Economics of Education Review
27(6)
, 688-696
.
Abstract.
Link.
The education cost literature includes econometric studies attempting to determine economies of scale, or estimate an optimal school or district size. Not only do their results differ, but the studies use dissimilar data, techniques, and models. To derive value from these studies requires that the estimates be made comparable. One method to do this is meta-regression analysis (MRA) which was pioneered by Stanley and Jarrell [(1998). Gender wage discrimination bias? An MRA. Journal of Human Resources, 33, 947–973] as a result of similar frustrations with ‘omnipresent biases’ (p. 717). In this paper, the basic technique of MRA is described and then applied to 22 estimates of school costs, where an optimal school size (OSS) has or can be calculated. Results suggest an OSS of around 1543 students at the US secondary school level. Difficulties in interpreting the estimates are highlighted. The paper concludes with cautions in the use of MRA and opportunities for further research in this area. [close]
-
Conlin, Michael and Paul N. Thompson (2014).
Michigan and Ohio K-12 educational financing systems. Equality and efficiency.
In: Education Finance and Policy
9(4)
, 417-445
.
Abstract.
Link.
We consider issues of equality and efficiency in two different school funding systems—a state-level system in Michigan and a foundation system in Ohio. Unlike Ohio, the Michigan system restricts districts from generating property or income tax revenue to fund operating expenditures. In both states, districts fund capital expenditures with local tax revenue. Our results indicate that although average revenue and expenditures per pupil in Michigan and Ohio are almost identical, the distributions of the various revenue sources are quite different. Ohio’s funding system has greater equality in terms of total revenue, largely due to Ohio redistributing state funds to the least wealthy districts while Michigan does not. We find relatively wealthy Michigan districts spend more on capital expenditures, whereas relatively wealthy Ohio districts spend more on labor and materials. This suggests that constraints on raising local revenue to fund operating expenditures in Michigan could create efficiency issues. [close]
-
Costrell, Robert, Eric Hanushek and Susanna Loeb (2008).
What Do Cost Functions Tell Us About the Cost of an Adequate Education?.
In: Peabody Journal of Education
83(2)
, 198-223
.
Abstract.
Link.
Econometric cost functions have begun to appear in education adequacy cases with greater frequency. Cost functions are superficially attractive because they give the impression of objectivity, holding out the promise of scientifically estimating the cost of achieving specified levels of performance from actual data on spending. By contrast, the opinions of educators form the basis of the most common approach to estimating the cost of adequacy, the professional judgment method. The problem is that education cost functions do not in fact tell us the cost of achieving any specified level of performance. Instead, they provide estimates of average spending for districts of given characteristics and current performance. It is a huge and unwarranted stretch to go from this interpretation of regression results to the claim that they provide estimates of the minimum cost of achieving current performance levels, and it is even more problematic to extrapolate the cost of achieving at higher levels. In this article we review the cost-function technique and provide evidence that draws into question the usefulness of the cost-function approach for estimating the cost of an adequate education. [close]
-
Craig, Steven and Robert Inman (1986).
Education, Welfare and the “New” Federalism: State Budgeting in a Federalist Public Economy.
In: Rosen, Harvey (ed.).
Studies in State and Local Public Finance.
Chicago:
University of Chicago Press
, 187-222
.
Abstract.
Link.
President Reagan`s proposal for a "New Federalism" raises a fundamental challenge to our structure of Federal-state-local fiscal relations. This research examines the likely consequence of the New Federalism for fiscal allocations by state governments, and attempts to model the impact on both the size of state budgets and on the sectors on which that budget is spent. [close]
-
Cullen, Julie Berry (2003).
The Impact of Fiscal Incentives on Student Disability Rates.
In: Journal of Public Economics
87(7-8)
, 1557-1589
.
Abstract.
Link.
In this paper, I estimate the elasticity of student disability rates with respect to the generosity of state reimbursements. The classification response is identified from policy-induced variation in the amount of state aid generated by serving a disabled student across local school districts in Texas from 1991–1992 through 1996–1997. My central estimates imply that fiscal incentives can explain nearly 40% of the recent growth in student disability rates in Texas. The magnitude of the institutional response varies by district size and enrollment concentration, student race/ethnicity and the level of fiscal constraint. [close]
-
Dearden, Lorraine, Emla Fitzsimons, Alissa Goodman and Greg Kaplan (2008).
Higher Education Funding Reforms in England: The Distributional Effects and the Shifting Balance of Costs.
In: Economic Journal
118(526)
, 100-125
.
Abstract.
Link.
This article undertakes a quantitative analysis of substantial reforms to the system of higher education (HE) finance in England, first announced in 2004 and revised in 2007. The reforms introduced deferred fees for HE, payable by graduates through the tax system via income-contingent repayments on loans subsidised by the government. The article uses lifetime earnings simulated by the authors to consider the likely distributional consequences of the reforms for graduates. It also considers the costs of the reforms for taxpayers, and how the reforms are likely to shift the balance of funding for HE between the public and private sectors. [close]
-
Del Rey, Elena (2012).
Deferring higher education fees without relying on contributions from non-students.
In: Education Economics
20(5)
, 510-521
.
Abstract.
Link.
The benefits of deferring the payment of higher-education costs are increasingly acknowledged as a way to overcome student-borrowing constraints. Since higher education is a risky investment and students are generally risk averse, the repayment arrangements proposed in the literature frequently include some insurance. In a competitive environment, preventing adverse selection may require coercion to join the scheme or the use of public funds (i.e. contributions from non-students) to make the scheme attractive to all students. Alternatively, when the number of higher-ability students is low, students can be given the option to choose among arrangements that include different degrees of insurance. [close]
-
Del Rey, Elena (2004).
Funding schools for greater equity.
In: Regional Science and Urban Economics
34(2)
, 203-224
.
Abstract.
Link.
Countries that finance schools by means of uniform per-student allocations and allow free school choice seem to recognize the need to regulate admissions at over-subscribed schools. In this paper, we show that, without such regulations, (i) allowing free school choice leads to complete segregation unless mobility costs are high, and (ii) higher allocations per disadvantaged student enrolled can help achieve a unique and less segregated equilibrium, especially when mobility costs are low. The latter instrument can make regulation unnecessary when the aim is to avoid cream-skimming by publicly financed schools. [close]
-
Del Rey, Elena and María Racionero (2010).
Financing schemes for higher education.
In: European Journal of Political Economy
26(1)
, 104-113
.
Abstract.
Link.
Most industrial countries have traditionally subsidized the provision of higher education. Alternative financing schemes, which rely on larger contributions from students, are being increasingly adopted. Those based on income-contingent loans provide insurance against uncertain educational outcomes. We consider a unified framework where we analyze the following schemes: 1) the traditional tax-subsidy, 2) pure loans, 3) income-contingent loans with risk-sharing, and 4) income-contingent loans with risk-pooling. We focus on their insurance role and their effect on higher education participation. We show that an income-contingent loan with risk-pooling can induce the optimal level of participation provided that it covers both financial costs of education and forgone earnings. [close]
-
Deny, Kevin (2014).
The effect of abolishing university tuition costs: evidence from Ireland.
In: Labour Economics
26
, 26-33
.
Abstract.
Link.
University tuition fees for undergraduates were abolished in Ireland in 1996. This paper examines the effect of this reform on the socio-economic gradient to determine whether the reform was successful in achieving its objective of promoting educational equality that is improving the chances of low socio-economic status (SES) students progressing to university. It finds that the reform clearly did not have that effect. The results are consistent with recent findings for the UK which show that the socio-economic gradient in second level attainment largely explain the socio-economic gradient in higher education participation. [close]
-
Denzau, Arthur (1975).
An Empirical Survey of Studies on Public School Spending.
In: National Tax Journal
28(2)
, 241-249
.
Abstract.
Link.
The study of public school spending has proceeded in a disjointed fashion, with no explanatory, theoretical paradigm being generally accepted. Some guidance for future work in this area can be provided, however, by an empirical survey. Several versions of the models from thirteen works are re-estimated on a single data base. The robust results obtained suggest the "facts" which the desired hypothetical-deductive analysis would be expected to explain. [close]
-
Doolan, Karin, Danijela Dolenec, and Mladen Domazet (2013).
The Croatian Student Financial Support System in a European Context: A Comparative Study.
Zagreb:
Institute for the Development of Education
.
Link.
[close]
-
Link.
[close]
-
Downes, Thomas (1992).
Evaluating the Impact of School Finance Reform on the Provision of Public Education: The Californian Case.
In: National Tax Journal
45(4)
, 405-419
.
Abstract.
Link.
This paper begins with an overview of the institutional structure of educational finance in California. Using two crosssections of California school districts, one from before and the other after the second Serrano v. Priest decision of the Califorma Supreme Court, the analysis shows there has been significant convergence across school districts in per pupil expenditures. A concomittant convergence in student performance is not seen. The paper considers possible explanations for this stability in relative performance. Of these, actions in wealthier districts to offset the constraints implicit in the post-Serrano finance reforms and changing demographics in poor districts offer the best explanations for the stability. [close]
-
Downes, Thomas and David Schoeman (1998).
School Finance Reform and Private School Enrollment: Evidence from California.
In: Journal of Urban Economics
43(3)
, 418-443
.
Abstract.
Link.
This paper uses the school finance reforms in California in the 1970s to examine whether the constraints such reforms impose on school districts lead to switching to private schools. Misspecifications of demand in previous work have led to understatement of reform effects. An empirical model of schooling share equations is derived from a discrete choice framework. Large biases are shown to result from failure to account for heterogeneity of demanders and school-district-specific fixed effects. Simulations indicate that the changes in public provision potentially resulting from reform explain a sizeable portion of the growth in the private school share. [close]
-
Downes, Thomas and Shane Greenstein (1996).
Understanding the Supply Decisions of Nonprofits: Modelling the Location of Private Schools.
In: RAND Journal of Economics
27(2)
, 365-390
.
Abstract.
Link.
This research examines the location choice of California private schools in 1978-1979. We make use of some of the recent developments in the analysis of count data. The results indicate that the character of the population and the public schools influence location decisions. Private schools with different religious affiliations respond differently to population characteristics, which we argue is evidence of differences in the objectives of these different types of private schools. Location decisions of all types of private schools depend most on characteristics of the community in which a school locates, with attributes of surrounding communities having small effects on the location decision. [close]
-
Duncombe, William and John Yinger (2011).
Are education cost functions ready for prime time? An examination of their validity and reliability.
In: Peabody Journal of Education
86(1)
, 28-57
.
Abstract.
Link.
This article makes the case that cost functions are the best available methodology for ensuring consistency between a state's educational accountability system and its education finance system. Because they are based on historical data and well-known statistical methods, cost functions are a particularly flexible and low-cost way to forecast what each school district must spend to meet the standards in a state's accountability system. However, the application of cost functions to education must confront several challenges in both data collection and estimation methodology. This article describes the strengths and weaknesses of various ways to address these challenges and illustrates how the reliability and forecasting accuracy of cost functions can be tested using data for Missouri school districts. [close]
-
Duncombe, William and John Yinger (2007).
Does School District Consolidation Cut Costs?.
In: Education Finance and Policy
2(4)
, 341-375
.
Abstract.
Link.
Consolidation has dramatically reduced the number of school districts in the United States. Using data from rural school districts in New York, this paper provides the first direct estimation of consolidation’s cost impacts. We find economies of size in operating and capital spending: doubling enrollment cuts total costs per pupil by 28 percent for a 300-pupil district and by 9 percent for a 1,500-pupil district. Adjustment costs in capital spending lower these enrollment-based cost savings by about 5 percentage points. Overall, consolidation makes fiscal sense, particularly for very small districts, but states should avoid subsidizing unwarranted capital projects. The results of this paper should be of interest to state and local elected officials, to people in state education departments, and to public school administrators [close]
-
Duncombe, William and John Yinger (2005).
How much more does a disadvantaged student cost?.
In: Economics of Education Review
24(5)
, 513-532
.
Abstract.
Link.
This paper provides a guide to statistically based methods for estimating the extra costs of educating disadvantaged students, shows how these methods are related, and compares state aid programs that account for these costs in different ways. We show how pupil weights, which are included in many state aid programs, can be estimated from an education cost equation, which many scholars use to obtain an education cost index. We also devise a method to estimate pupil weights directly. Using data from New York State, we show that the distribution of state aid is similar with either statistically based pupil weights or an educational cost index. Finally, we show that large, urban school districts with a high concentration of disadvantaged students would receive far more aid (and rich suburban districts would receive far less aid) if statistically based pupil weights were used instead of the ad hoc weights in existing state aid programs. [close]
-
Ehrenberg, Ronald G., Randy A. Ehrenberg, Christopher L. Smith and Liang Zhang (2004).
Why Do School District Budget Referenda Fail?.
In: Educational Evaluation and Policy Analysis
26(2)
, 111-125
.
Abstract.
Link.
Our article analyzes historical data for New York State on the percentage of school board budget proposals that are defeated each year and panel data that we have collected on budget vote success for individual school districts in the state. We find that changes in state aid have little impact on budget vote success. Defeating a budget in one year increases the likelihood that voters will defeat a budget the next year. Finally, districts have a lower probability of having their budget proposals defeated when their school board members have longer terms. [close]
-
Eom, Tae Ho, William Duncombe, Phuong Nguyen-Hoang and John Yinger (2014).
The unintended consequences of property tax relief: New York’s STAR program.
In: Education Finance and Policy
9(4)
, 446-480
.
Abstract.
Link.
New York’s School Tax Relief Program, STAR, provides state-funded property tax relief for homeowners. Like a matching grant, STAR changes the price of education, thereby altering the incentives of voters and school officials and leading to unintended consequences. Using data for New York State school districts before and after STAR was implemented, we find that STAR increased student performance, school district inefficiency, and school spending by 2 to 4 percent in most districts, leading to an average school property tax rate increase of 14 percent. The STAR-induced tax rate increases offset about one third of the initial STAR tax savings and boosted property taxes for business property. STAR did little to offset the existing inequities in New York State’s education finance system, particularly compared to an equal-cost increase in state aid. This article should be of interest to policy makers involved in property taxes or other aspects of education finance. [close]
-
Epple, Dennis N. and Maria Marta Ferreyra (2008).
School Finance Reform: Assessing General Equilibrium Effects.
In: Journal of Public Economics
92(5-6)
, 1326-1351
.
Abstract.
Link.
In 1994 the state of Michigan implemented one of the most comprehensive school finance reforms undertaken to date in any of the states. Understanding the effects of the reform is thus of value in informing other potential reform initiatives. In addition, the reform and associated changes in the economic environment provide an opportunity to assess whether a simple general equilibrium model can be of value in framing the study of such reform initiatives. In this paper, we present and use such a model to derive predictions about the effects of the reform on housing prices and neighborhood demographic compositions. Broadly, our analysis implies that the effects of the reform and changes in the economic environment are likely to have been reflected primarily in housing prices and only modestly on neighborhood demographics. We find that evidence for the Detroit metropolitan area from the decade encompassing the reform is largely consistent with the predictions of the model. [close]
-
Epple, Dennis and Richard Romano (2014).
On the political economy of educational vouchers.
In: Journal of Public Economics
120
, 62-73
.
Abstract.
Link.
Two significant challenges hamper the analyses of the collective choice of educational vouchers. One is the multi-dimensional choice set arising from the interdependence of the voucher, public education spending, and taxation. Second, even absent a voucher, preferences over public spending are not single-peaked; a middling level of public school spending may be less attractive to a household than either high public school spending or private education coupled with low public spending. We show that Besley and Coate's (1997) representative democracy model provides a viable approach to overcome these hurdles. We provide a complete characterization of equilibria with an endogenous voucher. A voucher is adopted in political equilibrium provided the coefficient of variation of income is sufficiently small. We undertake a parallel quantitative analysis and we find that no voucher arises in equilibrium for the U.S. income distribution, which exhibits too much heterogeneity. For a tighter income distribution, including those in Douglas County, Colorado where a voucher was recently adopted, our model predicts a positive voucher. Public support for a not-too-large voucher arises because the cross subsidy to public school expenditure from those switching to private schools outweighs the subsidy to those who attend private school in the absence of a voucher. [close]
-
Epple, Dennis, Richard Romano, Sinan Sarpça, and Holger Sieg (2013).
The U.S. Market for Higher Education: .
A General Equilibrium Analysis of State and Private Colleges and Public Funding Policies.
NBER Working Paper 19298. Cambridge, MA: National Bureau of Economic Research.
Abstract.
Link.
We develop a general equilibrium model of the market for undergraduate higher education that captures the coexistence of public and private colleges, the large degree of quality differentiation among them, and the tuition and admission policies that emerge from their competition for students. The calibrated version of the model matches well the aggregate characteristics of U.S. higher education including college attendance in public and private schools, tuition levels, and the distribution of federal aid. Predictions about the distribution of students across colleges by ability and income and about the provision of institutional aid are realistic. We use the model to examine the consequences of federal and state aid policies. A one-third increase in the availability of federal aid increases college attendance by 6% of the initial college population, virtually all of the increase being in state colleges and mainly of poor students. Private colleges reduce institutional aid and use the net funding gain to spend more on educational inputs and to substitute some highly able poor students for less able rich students. Reductions in federal or state aid result in reduced attendance mainly by poor students. Reductions of support to state colleges does not cause private colleges to grow but does improve their quality as demand shifts toward them. [close]
-
Fack, Gabrielle and Julien Grenet (2015).
Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program.
In: American Economic Journal: Applied Economics
7(2)
, 1-34
.
Abstract.
Link.
Using comprehensive administrative data on France's single largest financial aid program, this paper provides new evidence on the impact of large-scale need-based grant programs on the college enrollment decisions, persistence, and graduation rates of low-income students. We exploit sharp discontinuities in the grant eligibility formula to identify the impact of aid on student outcomes at different levels of study. We find that the provision of 1,500 euros cash allowances to prospective undergraduate or graduate students increases their college enrollment rates by 5 to 7 percent. Moreover, we show that need-based grants have positive effects on student persistence and degree completion. [close]
-
Falch, Torberg and Justina A. V. Fischer (2012).
Public sector decentralization and school performance: International evidence.
In: Economics Letters
114(3)
, 76-279
.
Abstract.
Link.
Using a panel of international student test scores 1980–2000 (PISA and TIMSS), panel fixed effects estimates suggest that government spending decentralization is conducive to student performance. The effect does not appear to be mediated through levels of educational spending. [close]
-
Falch, Torberg and Jørn Rattsø (1999).
School Reforms and School Spending Growth.
In: Journal of Policy Reform
3(3)
, 195-227
.
Abstract.
Link.
The evolution of school spending is related to legislative school reforms expanding the school system. This study addresses the determination of legislative reforms and primary school spending, using data for Norway 1880-1990. Reforms are the result of growth in demand for school services and economic and political conditions conducive to reform. 10 school reforms are identified, and they are shown to be systematically related to characteristics of the political structure. School spending is analyzed both as an aspect of reform and by assuming separability between legislative reform decisions and implementation of reform. When legislative reform is treated as an independent determinant of school spending, we find that reforms drive up teacher employment and that local governments react with a cost saving strategy increasing the class size. [close]
-
Falch, Torberg and Jørn Rattsø (1997).
Political Economic Determinants of School Spending in Federal States: Theory and Time-Series Evidence.
In: European Journal of Political Economy
13(2)
, 299-314
.
Abstract.
Link.
To develop the understanding of public sector growth, this paper addresses the determinants of one important component of public spending, public education. Disaggregation of school expenditure allows for an analysis of how different decisions at the national and the local government level contribute to increased spending. A bargaining model between the central government and a teacher union is combined with a demand model of educational services at the local government level. Political characteristics are assumed to influence the central government bargaining strength over teacher wages and working hours. The model is implemented using a database for economic, political and school factors in Norway during 1880–1990. Political strength, measured as stable government and low party fragmentation of parliament, is shown to be important to hold down teacher employment. Socialist orientation of the government tends to drive up both teacher wages and employment. The inelastic response of local governments to centrally determined cost factors imply that they are not able to hold back spending growth following higher costs. [close]
-
Falch, Torberg and Jørn Rattsø (1996).
Sources of Cost Expansion: Primary Education in Norway 1946–1990.
In: Education Economics
4(2)
, 161-185
.
Abstract.
Link.
Primary school spending growth is a concern in the public debate in Norway. During the 1980s, real spending per student increased by 35%, but no improvement in student performance has been documented. School spending in decided in a complicated process involving central and local governments and bargaining with teacher unions. In this econometric study the primary school spending growth is shown to be the result of cost factors determined at the national level together with lack of adjustment to rising costs in local governments. Policies to control school spending must address the bargaining strangth of the central goverment to hold back on teacher wages and teacher employment and the responsiveness of local governments to higher costs. [close]
-
Falch, Torberg, Marte Rønning and Bjarne Strøm (2008).
A cost model of schools: School size, school structure and student composition.
In: N. Soguel and P. Jaccard (eds).
Governance and performance of education systems.
Springer
, 247-265
.
Abstract.
Link.
In this chapter, we use information at the school level from Norway to estimate the relationship between resource use, student composition and school size net of these confounding effects. In light of the discussion above, our estimated relationship cannot be interpreted as a cost function in the meaning of the traditional economic textbook because we do not include output into the model. Including output will introduce all the problems described above, making it very hard to interpret the estimated coefficients. Our model can be seen as a reduced form model in the sense that both costs and output are determined by the same factors. Our contribution to the literature is that we condition in our empirical model on school district fixed effects, that is, we only utilize variation between schools within districts to estimate the effects of school size and student composition on resource use. All demand factors common for all schools in a district are differentiated out of the model. In effect, we are removing from the model the district-level role of policy decisions, local preferences, political power of parents representing special student groups and the priority of spending on schools in relation to other services in the district. Thus, an alternative interpretation is that we estimate how the school districts distribute a given school budget between the schools. In that sense, our model can be considered as an “allocation model”. In Norway, the maximum class size rule was terminated before the school year 2003/2004. The idea was that teaching could be made more efficient when organized in a more flexible way, with larger student groups in some subjects than in other subjects. One reasonable hypothesis is that economics of scale in education became less important under the new flexible system. We will investigate whether this regulatory change affected the economics of scale in the allocation of the school budget across schools. To our knowledge, this article is the first to examine empirically the consequences on school resource use from removing a maximum class size rule. Section 11.2 gives a short description of our methodology, while Section 11.3 presents the institutional setting for Norwegian schools and the data we will use. The empirical results are presented in Section 11.4. Within our allocation model we find that costs per student is diminishing within the whole range of school size in Norway. Further, we find that a minority student costs almost twice as much as an average student, while students with special needs cost more than twice as much as an average student. Section 11.5 offers some concluding comments. [close]
-
Fernandez, Raquel and Richard Rogerson (2003).
Equity and Resources: An Analysis of Education Finance Systems.
In: Journal of Political Economy
111(4)
, 858-897
.
Abstract.
Link.
Over the last few decades many US states have made large changes to their systems of financing K-12 education with the explicit objective of providing more equitable educational opportunities. There has been relatively little accompanying analysis, however, examining how these changes might affect the total sum of resources dedicated to education and whether indeed increased equality is a likely outcome. We analyze five different education finance systems: local, State, foundation, power equalizing with recapture (PER) and power equalizing without recapture (PEN). We find that finance systems can have very large effects on both resources devoted to education and equity. Our calibration suggests that total spending on education may differ by as much as 25% across systems. The trade-off between equity and resources, however, is not monotone. Although spending in a local system is typically greater than that in either the State system or PER, total spending is typically highest for the foundation and PEN systems, both of which reduce inequality of educational resources substantially relative to a local system. We also rank systems in welfare terms by carrying out an expected utility calculation. We find that PER consistently ranks best, though it provides fewer resources to education than the foundation and PEN systems, and falls well short of the state system in terms of equity. Additionally, we find that the PER system is remarkably popular among these alternative finance systems--we prove analytically that for an important subset of preferences PER will win in majority voting comparisons with each of the other systems. [close]
-
Fernandez, Raquel and Richard Rogerson (1999).
Education Finance Reform and Investment in Human Capital: Lessons from California.
In: Journal of Public Economics
74(3)
, 327-350
.
Abstract.
Link.
This paper examines the effect of different education financing systems on the level and distribution of resources devoted to public education. We focus on California, which in the 1970's moved from a system of mixed local and state financing to one of effectively pure state finance and subsequently saw its funding of public education fall between ten and fifteen percent relative to the rest of the US. We show that a simple political economy model of public finance can account for the bulk of this drop. We find that while the distribution of spending became more equal, this was mainly at the cost of a large reduction in spending in the wealthier communities with little increase for the poorer districts. Our model implies that there is no simple trade-off between equity and resources; we show that if California had moved to the opposite extreme and abolished state aid altogether, funding for public education would also have dropped by almost ten percent. [close]
-
Fernandez, Raquel and Richard Rogerson (1997).
Education Finance Reform: A Dynamic Perspective.
In: Journal of Policy Analysis and Management
16(1)
, 67-84
.
Abstract.
Link.
We use a dynamic Tiebout model to analyze the consequences of moving from a pure local system of education finance to a pure state system of finance in which each student receives the same resources. While much of the education finance literature focuses on the static or immediate effects of such a change, our analysis also examines the dynamic effects. Numerical simulations for a calibrated version of our model indicate that these dynamic effects are very important. Comparing steady states, we find that aggregate welfare increases on the order of 10 percent following the switch to a state system. The key to this welfare gain is that a local system yields inefficiently low investment in human capital of children from low-income families. [close]
-
Figlio, David (1997).
Did the "Tax Revolt" Reduce School Performance?.
In: Journal of Public Economics
65(2)
, 245-269
.
Abstract.
Link.
This paper uses detailed school-level data from 49 states to analyze the effects of tax-revolt era property tax limitations on school services. I find that limitations are associated with larger student-teacher ratios and lower cost-of-living adjusted starting teacher salaries, all else equal. These results are robust to modelling the results as endogenous and using a variety of measures for whether the limitation binds at particular schools. However, I find no such evidence that schools subject to limitations have reduced their administrative costs. Furthermore, I find that limitations are associated with lower student performance on mathematics, science, social studies and reading examinations, all else equal. [close]
-
Figlio, David N. (2002).
Can Public Schools Buy Better-Qualified Teachers?.
In: Industrial and Labor Relations Review
55(4)
, 686-699
.
Abstract.
Link.
Since the early 1980s, real teacher salaries in U.S. public schools have increased considerably faster than salaries of other Americans with similar levels of education and training. Providing an important impetus for this development were claims that increased salaries would allow the recruitment of betterqualified teachers. This analysis, which uses panel data on new teachers in 188 public school districts that changed their salaries between 1987–88 and 1993– 94, investigates whether a school district can, by unilaterally increasing teacher salaries, improve the quality of the teachers it hires, as indicated by their having graduated from selective colleges and majored in the specific subject matter they teach. For nonunion school districts, the author finds a positive, statistically significant relationship between a given district’s teacher salaries and that district’s probability of hiring well-qualified teachers. Several tests indicate that this relationship is not found in unionized school districts. [close]
-
Figlio, David N. and Kim S. Rueben (2001).
Tax Limits and the Qualifications of New Teachers.
In: Journal of Public Economics
80(1)
, 49-71
.
Abstract.
Link.
This paper examines the impact of local tax limits on new teacher quality. Using data from the National Center for Education Statistics we find that tax limits systematically reduce the average quality of education majors, as well as new public school teachers in states that have passed these limits. The average relative test scores of education majors in tax limit states declined by ten percent as compared to the relative test scores of education majors in states that did not pass limits. This relationship is strengthened if we control for school finance equalization reforms or examine tax limits passed in two different periods. [close]
-
Figlio, David N., Thomas A. Husted and Lawrence W. Kenny (2004).
Political Economy of Inequality of School Spending.
In: Journal of Urban Economics
55(2)
, 338-349
.
Abstract.
Link.
This paper employs data from 45 states between 1972 and 1992 to investigate the basic forces affecting school resource inequality within a state. We consider a wide range of determinants of inequality, including voter preferences, the tax and political structure within the state, and the legal standing of education within the state constitution. We find that state constitutional language regarding equity affects the degree of school spending equality in the state, as does the political environment in the state and factors associated with the benefits and costs of Tiebout sorting into school districts. [close]
-
Figlio, David and Cassandra M. D. Hart (2014).
Competitive effects of means-tested school vouchers.
In: American Economic Journal: Applied Economics
6
, 133-156
.
Abstract.
Link.
We use the introduction of a means-tested voucher program in Florida to examine whether increased competitive pressure on public schools affects students' test scores. We find greater score improvements in the wake of the program introduction for students attending schools that faced more competitive private school markets prior to the policy announcement, especially those that faced the greatest financial incentives to retain students. These effects suggest modest benefits for public school students from increased competition. The effects are consistent across several geocoded measures of competition and isolate competitive effects from changes in student composition or resource levels in public schools. [close]
-
File, Jon, Thomas Farnell, Karin Doolan, Dušan Lesjak, and Ninoslav Šćukanec (2013).
Higher Education Funding and the Social Dimension in Croatia: Analysis and Policy Guidelines.
Zagreb:
Institute for the Development of Education
.
Link.
[close]
-
Fischer, Justina A. V. (2005).
Do Institutions of Direct Democracy Tame the Leviathan? Swiss Evidence on the Structure of Expenditure for Public Education.
CESifo Working Paper 1628.
Abstract.
Link.
Identification of a deleterious impact of institutions of direct legislation on student performance by studies for both the U.S. and Switzerland has raised the question of the exact transmission channels for this impact. Studies for the U.S. that find an increase in the ratio of administrative to instructional spending and larger class sizes support the hypothesis of a Leviathan-like school administration. However, research for Switzerland using a time-series panel of sub-federal school expenditure and class size detects no such effect. These findings are in line with previous analyses that identify efficiency gains in the provision of public goods for Switzerland. [close]
-
Fletcher, Deborah and Lawrence W. Kenny (2008).
The Influence of the Elderly on School Spending in a Median Voter Framework.
In: Education Finance and Policy
3(3)
, 283-315
.
Abstract.
Link.
How do the elderly influence school spending if they are a minority of the population? We estimate the determinants of school spending in a median voter model, comparing four assumptions about how the elderly influence the identity of the median voter. Using a countylevel panel, we find that elderly preferences are best characterized by assuming all elderly or all elderly migrants vote with the poor. Having more elderly results in a median voter who is further down the community’s income distribution. This median voter is poorer, which lowers preferred school spending, and faces a lower tax price, which raises preferred school spending. The evidence suggests that the income effect is slightly larger than the price effect, so the elderly on net cause a very small drop in spending. Thus the widespread concern about the negative impact of population aging on school funding seems to be misplaced. [close]
-
Flyer, Fredrick and Sherwin Rosen (1997).
The New Economics of Teachers and Education.
In: Journal of Labor Economics
15(1)
, 104-139
.
Abstract.
Link.
Rapidly growing costs of elementary and secondary education are studied in the context of the rising value of women's time. The three-fold increase in direct costs of education per student in the past three decades was caused by increasing demand and utilization of teacher and staff inputs, attributable to growing market opportunities of women and changes in the structure of families. Substitution of purchased teacher and staff inputs for own household time in the total production of children's education and maturation is a predictable economic response to these forces. On the supply side, the 'flexibility option,' that female teachers who take temporary leaves to raise children do not suffer subsequent wage loss upon reentry, is shown to be an important attraction of the teaching profession to women. Other college educated women suffer reentry wage losses of 10 percent per year of leave. The estimated value of flexibility in teaching is 5 percent of life-cycle earnings and will fall as labor force interruptions of women for child-rearing become less frequent. Both supply and demand considerations suggest that the direct costs of education per student will continue to increase in the future, independent of political and other organization reforms of schools. [close]
-
Freeman, Richard (1986).
Unionism Comes To the Public Sector.
In: Journal of Economic Literature
24(1)
, 41-86
.
Abstract.
Link.
This paper argues that public sector labor relations is best understood in a framework that focuses on unions` ability to shift demand curves rather than to raise wages, as is the case in the private sector. [close]
-
Gallagher, Daniel (1978).
Teacher Bargaining and School District Expenditures.
In: Industrial Relations
17(2)
, 231-237
.
Link.
[close]
-
Glewwe, Paul, Ilias Nauman and Michael Kremer (2010).
Teacher Incentives.
In: American Economic Journal: Applied Economics
2(3)
, 205-227
.
Abstract.
Link.
We analyze a randomized trial of a program that rewarded Kenyan primary school teachers based on student test scores, with penalties for students not taking the exams. Scores increased on the formula used to reward teachers, and program school students scored higher on the exams linked to teacher incentives. Yet most of the gains were focused on the teacher reward formula. The dropout rate was unchanged. Instead, exam participation increased among enrolled students. Test scores increased on exams linked to the incentives, but not on other, unrelated exams. Teacher attendance and homework assignment were unaffected, but test preparation sessions increased. [close]
-
Goldhaber, Dan (1999).
An Endogenous Model of Public School Expenditures and Private School Enrollment.
In: Journal of Urban Economics
46(1)
, 106-128
.
Abstract.
Link.
This paper examines the link between private school enrollment rates and public school expenditures. Using a panel of New York State school districts, models are estimated in which public school spending and private school enrollment rates are endogenously determined. The results indicate the presence of endogeneity. Increases in private school enrollment are not shown to cause decreases in public school per pupil expenditure. Private school enrollment rates are found to respond to changes in public school expenditure and are sensitive to changes in tuition. [close]
-
Goodman, Joshua (2010).
Skills, Schools, and Credit Constraints: Evidence from Massachusetts.
In: Education Finance and Policy
5(1)
, 36-53
.
Abstract.
Link.
Low college enrollment rates among low-income students may stem from a combination of credit constraints, low academic skill, and low-quality schools. Recent Massachusetts data allow the first use of school district fixed effects in the analysis of credit constraints, leading to four findings. First, low-income students in Massachusetts have lower intended college enrollment rates than higher income students but also have dramatically lower skills and attend lower-quality school districts. Second, inclusion of skill controls greatly reduces but does not eliminate this intended enrollment gap. Third, inclusion of school district fixed effects has little further impact, with low-income students eight percentage points less likely to intend enrollment than higher income students of the same skill and from the same school district. Fourth, medium- and high-skilled low-income students appear the most constrained. State governments could use the methods employed here to target financial aid more efficiently. [close]
-
Gordon, Nora (2004).
Do federal grants boost school spending? Evidence from Title I.
In: Journal of Public Economics
88(9)
, 1771-1792
.
Abstract.
Link.
One of the federal government's main elementary and secondary education programs is Title I, which allocates money for compensatory education to school districts based on child poverty. I use sharp changes in per-pupil grant amounts surrounding the release of decennial census data to identify effects of Title I on state and local education revenue, and how much the program ultimately increases spending by recipient school districts. I find that state and local revenue efforts initially are unaffected by Title I changes, but that local governments substantially and significantly crowd out changes in Title I within in a 3-year period. [close]
-
Gradstein, Mark and Michael Kaganovich (2004).
Aging population and education finance.
In: Journal of Public Economics
88(9)
, 2469-2485
.
Abstract.
Link.
Conventional wisdom suggests that aging of population will increase political pressure to tilt the composition of social spending in favour of the elderly, while potentially sacrificing other publicly provided goods such as education. This view seems to be supported by recent empirical findings that per child public education spending tends to be lower in US jurisdictions with higher fraction of elderly residents. Do these cross-sectional findings also carry the dynamic implication that longevity will lead over time to waning political support for funding of public education? This Paper challenges such implication. We present a model that is consistent with the aforementioned cross-sectional regressions yet predicts an overall positive impact of increasing longevity on public education funding and economic growth. [close]
-
Greenaway, David and Michelle Haynes (2003).
Funding Higher Education in the UK: The Role of Fees and Loans.
In: Economic Journal
113(485)
, F150-F166
.
Abstract.
Link.
Higher education has undergone considerable expansion in recent decades in a number of OECD countries. Expansion has been especially dramatic in the UK where aggregate student numbers have doubled in 20 years. However, over the same period, funding per student has halved in real terms. In the UK as well as in other countries, most notably Australia, innovation to diversify the funding base has taken place. This has included a limited role for fee contributions. This paper makes the case for much greater reliance on fee contributions from students, accompanied by a greater availability of income contingent loans. [close]
-
Grob, Ueli and Stefan C. Walter (2007).
Demographic Change and Public Education Spending: A Conflict between Young and Old?.
In: Education Economics
15(3)
, 277-292
.
Abstract.
Link.
Demographic change in industrial countries will influence educational spending in potentially two ways. On the one hand, the decline in the number of school-age children should alleviate the financial pressure. On the other hand, the theoretical/empirical literature has established that the concomitantly increasing proportion of elderly in the population can influence the propensity of politicians to spend on education. Using a panel of the Swiss Cantons for the period from 1990 to 2002, we find that the education system has exhibited little elasticity in adjusting to changes in the school-age population, and that the share of the elderly population has a significantly negative influence on the willingness to spend on public education. [close]
-
Gross, John (1995).
Heterogeneity of Preferences for Local Public Goods: The Case of Private Expenditures on Public Education.
In: Journal of Public Economics
57(1)
, 103-127
.
Abstract.
Link.
Revealed preference techniques are used to investigate the degree of heterogeneity of local public good preferences by testing the hypothesis that demographic characteristics are correlated with preferences for expenditure on public education. The test relies on a goodness-of-fit index which is on an estimation of wasted consumer expenditure. We use bootstrap techniques to estimate the distribution of the test statistic. Preference heterogeneity is found to be common, however Democrat-Protestant households are found to have similar tastes, and, to a lesser extent, so are households with school-age children where at least one other trait is held in common. Republicans exhibit the greatest degree of preference heterogeneity. [close]
-
Hanushek, Eric A. (2007b).
Science Violated: Spending Projections and the 'Costing Out' of an Adequate Education.
In: Hanushek, Eric A.(ed).
Courting Failure: How School Finance Lawsuits Exploit Judges’ Good Intentions and Harm Our Children.
San Fransisco:
Stanford
.
Abstract.
Link.
The recent movement to hold schools accountable for student performance has highlighted a simple fact: Many students are not achieving at desired levels. Moreover, it takes little additional evidence to realize that many schools are not on an obvious path toward eliminating the gaps. These simple facts have led people with widely varying reform perspectives to enter into the fray with plans and solutions. And a natural follow-on question is invariably “what will it cost?” To answer this important question, a series of very misleading methods for estimating the costs of an improved education have evolved, but the problems with these methods are generally unrecognized (or ignored) in the public and judicial debate. These studies inherently fail to provide usable information about the resources that would be required to meet a given student achievement level, at least when the resources are used efficiently and effectively. Instead, as described below, the studies merely provide spending projections that incorporate, and in general lock in, current inefficient uses of school funds. But the other side is equally as important. Even if the specific method used in the spending projections is based on programs that have a proven track record of effectiveness—an infrequent occurrence in itself—there is no mechanism that will ensure the funds provided will be used in a way that is consistent with the effective programs. In fact, the final reports on spending projections invariably include a disclaimer that indicates one should not really expect the outcomes they consider because a variety of other forces are likely to dissipate any results. In other words, none of these studies suggests that the projected spending would actually have an effect on student achievement. To deflect criticism these studies frequently couch the analysis in terms of “opportunity” instead of outcome, but there is no scientific or objective way to define such an approach. The warning of lack of results is perhaps the most accurate statement in a number of these studies. Little evidence supports the case that improvements have followed past court infusions of funds. This chapter concludes with additional data on such ineffectiveness, and Evers and Clopton (chapter 4) provide detailed case studies of the failure of large increases in funds to lead to noticeable improvements in student outcomes. The fundamental issues surrounding the design and execution of these studies, described in this chapter, make these studies an inappropriate basis for judicial or legislative deliberations on school finance. [close]
-
Hanushek, Eric A. (2007a).
Incentive-based financing of schools.
SFRP Working Paper 14.
Abstract.
Link.
Many discussions of education finance attempt to separate the funding of the schools from the policies that govern operations. The idea is that it is possible to determine the level of spending and its distribution across students, schools, and districts at one time and then to decide on the policies and regulations that guide the system in an independent set of policy decisions. History shows that, as a general rule, this cannot be done effectively and the attempt frequently leads to very bad policy outcomes. [close]
-
Hanushek, Eric A. and Kuzey Yilmaz (2013).
Schools and Location: Tiebout, Alonso, and Governmental Finance Policy.
In: Journal of Public Economic Theory
15
, 829-855
.
Abstract.
Link.
Many discussions of school finance policy fail to consider how households respond to policies that change the attractiveness of different residential locations. We develop a general equilibrium model that incorporates workplace choice, residential choice, and political choice of tax and expenditure levels. Importantly, we consider multiple workplaces, a fundamental feature of today's metropolitan landscape. This basic model permits investigating how accessibility and public goods interact in a metropolitan area. The model is used to analyze two conventional policy initiatives: school district consolidation and district power equalization. The surprising conclusion is that school quality and welfare can fall for all families when these restrictions on choice are introduced. [close]
-
Hanushek, Eric A., Charles Ka Yui Leung, and Kuzey Yilmaz (2014).
Borrowing Constraints, College Aid, and Intergenerational Mobility.
In: Journal of Human Capital
8
, 1-41
.
Abstract.
Link.
This paper provides a consistent comparison of general tuition subsidies, need-based student aid, merit-based student aid, and income-contingent loans (ICL). Each of these policies is analyzed through a dynamic general equilibrium model in which individuals differ in family wealth and opportunities of completing college. The overlapping-generation structure of the model permits evaluation of different aid schemes in their implications on the aggregate outcomes, income distribution, and intergenerational mobility. Compared to current US tuition and loan policies, the ICL and need-based policies are most effective in promoting aggregate efficiency and income equality, while merit-based policies are least effective. [close]
-
Hanushek, Eric and Steven Rivkin (1997).
Understanding the Twentieth-Century Growth in U.S. School Spending.
In: Journal of Human Resources
32(1)
, 35-58
.
Abstract.
Link.
The persistent increase in spending on elementary and secondary schools has gone virtually undocumented and has received insufficient attention. Real expenditure per student increased at 3< percent per year over the entire period of 1890-1990. A decomposition of the spending growth shows that it was propelled by a combination of falling pupil-teacher ratios, increasing real wages to teachers, and rising expenditures outside of the classroom. While the expansion of education for the handicapped has had a disproportionate effect on spending, most of the growth in expenditure during the 1980s came from other sources. Teacher salary increases, which reflect competitive pressures particularly for females, have nevertheless failed to keep up with wages in other occupations?leading to likely declines in teacher quality over time. Moreover, the magnitude of the wage decline is larger than commonly thought because the relative aging of teachers has masked the sizable declines when teachers are compared to comparably aged people in other occupations. [close]
-
Harris, Amy Rehder, William N. Evans and Robert M. Schwab (2001).
Education Spending in an Aging America.
In: Journal of Public Economics
81(3)
, 449-472
.
Abstract.
Link.
In this paper we use a national panel of public school districts to study the impact of an aging population on public education spending. In contrast to previous analyses that use state-level data, we find that the elderly have only a modest overall negative effect on education spending at the district level. Our results confirm, however, that a growing share of elderly at the state level tends to depress state spending on education. These results are consistent with the hypothesis that the elderly believe only higher local spending is capitalized into house values. [close]
-
Heinesen, Eskil (2004).
Determinants of Local Public School Expenditure: A Dynamic Panel Data Model.
In: Regional Science and Urban Economics
34(4)
, 429-453
.
Abstract.
Link.
This paper investigates determinants of local authorities’ school expenditure. Hypotheses are derived from an expenditure demand model incorporating a school cost function. The empirical analysis exploits the panel structure of the dataset (for the 275 municipalities in Denmark over the period 1984–1996) by Generalized Method of Moments estimation of a dynamic model taking into account unobserved municipal-specific effects and possible endogeneity of the explanatory variables. Comparing with more standard estimations of the model, the results indicate that flexible estimation of a dynamic model controlling for unobserved municipal-specific effects is needed to avoid biased parameter estimates. [close]
-
Hoxby, Caroline (1999).
The Productivity of Schools and Other Local Public Goods Producers.
In: Journal of Public Economics
74(1)
, 01-30
.
Abstract.
Link.
I construct an agency model of local public goods producers in which households make Tiebout choices among jurisdictions in a world of imperfect information and costly residential mobility. I examine producers’ effort and rent under local property tax finance and centralized finance. I show that, if there are a sufficient number of jurisdictions, conventional local property tax finance can attain about as much productivity as a social planner with centralized finance can, even if the social planner is armed with more information than a real social planner could plausibly have. The key insight is that decentralized Tiebout choices make some information the social planner would need verifiable and other information unnecessary. [close]
-
Hoxby, Caroline (1996).
How Teachers’ Unions Affect Education Production.
In: Quarterly Journal of Economics
111(3)
, 671-718
.
Abstract.
Link.
This study helps to explain why measured school inputs appear to have little effect on student outcomes, particularly for cohorts educated since 1960. Teachers' unionization can explain how public schools simultaneously can have more generous inputs and worse student performance. Using panel data on United States school districts, I identify the effect of teachers' unionization through differences in the timing of collective bargaining, especially timing determined by the passage of state laws that facilitate teachers' unionization. I find that teachers' unions increase school inputs but reduce productivity sufficiently to have a negative overall effect on student performance. Union effects are magnified where schools have market power. [close]
-
Hoxby, Caroline M. (2001).
All School Finance Equalizations Are Not Created Equal.
In: Quarterly Journal of Economics
116(4)
, 1189-1231
.
Abstract.
Link.
Public school finance equalization programs can be characterized by the change they impose on the tax price of an additional dollar of local school spending. I calculate the tax price of spending for each school district in the United States for 1972, 1982, and 1992. I find that using the actual tax prices (rather than treating school finance equalizations as events) resolves apparently conflicting evidence about the effects of equalizations on per-pupil spending. Depending on whether they impose tax prices greater than or less than one, school finance equalizations either enjoy increased spending under most equalization schemes, but they actually lose spending under the strongest schemes such as those that exist in California and New Mexico. More importantly, regardless of whether an equalization levels down or up, it should be understood as a tax system on districts' spending. I show that school finance equalization schemes have properties that are generally considered undesirable: they raise revenue on a base that is itself a function of the school finance system and they assign tax prices so that people with a high demand for education are penalized relative to otherwise identical people with the same income. I discuss some simple, familiar schemes that do not have these undesirable properties, yet can achieve similar redistribution. [close]
-
Humlum, Maria K. and Rune M. Vejlin (2013).
The Responses of Youth to a Cash Transfer Conditional on Schooling: A Quasi-Experimental Study.
In: Journal of Applied Econometrics
28(4)
, 628-649
.
Abstract.
Link.
We estimate the effect of cash transfers given to youth conditional on high school attendance on the labor supply decisions and academic performance of youth. We exploit differences in the size of the total transfer received based on timing of birth to identify the causal effects of interest. Specifically, individuals born late in a quarter receive a larger total transfer than comparable individuals born early in the following quarter. We find that the transfer increases the labor market participation of youth and the number of months worked. The estimated effect is larger for individuals from low-income families. The results suggest that some youths are borrowing constrained. Since we find no evidence of corresponding effects on academic performance, alleviating the constraint appears only to affect consumption decisions and not human capital investment. [close]
-
Hübner, Malte (2012).
Do Tuition Fees Affect Enrollment Behavior? Evidence from a ‘Natural Experiment’ in Germany.
In: Economics of Education Review
31(6)
, 949-960
.
Abstract.
Link.
This paper uses the introduction of tuition fees in seven of the sixteen German states in 2007 as a natural experiment to identify the effects of tuition prices on enrollment probabilities. Based on information on enrollment decisions of the entire population of high-school graduates between 2002 and 2008, I find a negative effect of tuition fees on enrollment behavior. The effect is larger than in existing studies for European countries, but of a similar magnitude as effects identified with U.S. data. A potential spill-over effect of the policy intervention to the comparison group is accounted for by using the estimation results to calibrate a structural model of the enrollment decision. [close]
-
Imazeki, Jennifer (2001).
School Revenue Limits and Teacher Salaries: Evidence from Wisconsin.
Abstract.
In this paper, I analyze how state-adopted caps on school district revenue and teacher salary increases have affected the distribution of teacher salaries in Wisconsin. Specifically, a fixed effects model is used to estimate the effect that these policy changes have had on beginning and experienced teacher salaries and confirms that the revenue limits have had different effects on different districts, with high-salary districts being more strongly affected. I then estimate a model of compensating differentials to uncover changes in relative wages for districts that serve disadvantaged student populations. [close]
-
Imazeki, Jennifer and Andrew Reschovsky (2001).
Achieving Educational Adequacy Through School Finance Reform.
In: Journal of Education Finance
26(4)
, 373-396
.
Link.
[close]
-
Inman, Robert (1978).
Optimal Fiscal Reform of Metropolitan Schools: Some Simulation Results.
In: American Economic Review
68(1)
, 107-122
.
Link.
[close]
-
Inman, Robert P. (1979).
The Fiscal Performance of Local Governments: An Interpretative Review.
In: Mieszkowski, Peter and Mahlon Straszheim (eds.).
Current Issues in Urban Economics..
Baltimore, M.D.:
Johns Hopkins University Press
.
[close]
-
Jackman, Richard and John Papadachi (1981).
Local Authority Education Expenditure in England and Wales: Why Standards Differ and the Impact of Government Grants.
In: Public Choice
36(3)
, 425-439
.
Link.
[close]
-
Jackson, Kirabo C., Rucker C. Johnson and Claudia Persico (2016).
The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms,The Quarterly Journal of Economics.
In: Quarterly Journal of Economics
131(1)
, 157-218
.
Abstract.
Link.
Since the Coleman Report, many have questioned whether public school spending affects student outcomes. The school finance reforms that began in the early 1970s and accelerated in the 1980s caused dramatic changes to the structure of K–12 education spending in the United States. To study the effect of these school finance reform–induced changes in public school spending on long-run adult outcomes, we link school spending and school finance reform data to detailed, nationally representative data on children born between 1955 and 1985 and followed through 2011. We use the timing of the passage of court-mandated reforms and their associated type of funding formula change as exogenous shifters of school spending, and we compare the adult outcomes of cohorts that were differentially exposed to school finance reforms, depending on place and year of birth. Event study and instrumental variable models reveal that a 10% increase in per pupil spending each year for all 12 years of public school leads to 0.31 more completed years of education, about 7% higher wages, and a 3.2 percentage point reduction in the annual incidence of adult poverty; effects are much more pronounced for children from low-income families. Exogenous spending increases were associated with notable improvements in measured school inputs, including reductions in student-to-teacher ratios, increases in teacher salaries, and longer school years. [close]
-
Johnes, Geraint and Jill Johnes (1994).
Policy Reforms and the Theory of Education Finance.
In: Journal of Economic Studies
21(1)
, 03-15
.
Abstract.
Link.
Discusses the current system of higher education funding in the UK, and proposals for its reform. Possible reforms include methods whereby the direct burden of paying for tuition is shifted from government and towards students, which raises the question of how much of the total burden should be shifted. To examine this issue, constructs a general equilibrium model which seeks to explain the determination of occupation-specific wages and the allocation of work between three occupations: labouring, management and teaching. Derives comparative statics and assesses the impact of alternative finding arrangements for post-compulsory education. [close]
-
Johnstone, D. Bruce (2004).
The Economics and Politics of Cost Sharing in Higher Education: Comparative Perspectives.
In: Economics of Education Review
23(4)
, 403-410
.
Abstract.
Link.
Cost-sharing, or the shift in at least part of the higher educational cost burden from governments (or taxpayers) to parents and students, is a worldwide trend manifested in the introduction of (or in sharp increases in) tuition fees, user charges for lodging and food, and in the diminution of student grants. The phenomenon is seen even in Europe, which still remains the last bastion of generally "free" higher education, as well as in countries that were once Marxist and that are finding loopholes to retain the legal semblance of free higher education while becoming increasingly dependent on tuition revenue for the financial survival of their institutions. This paper examines the rationales for cost-sharing as well as the continuing ideological, political, and technical opposition to it, even in the face of extreme austerity and the virtual inevitability of higher educational revenue diversification, including some forms of cost-sharing, in most countries. [close]