Revealing Failures in the History of School Finance

68 Pages Posted: 9 Nov 2009 Last revised: 16 Nov 2009

See all articles by Peter H. Lindert

Peter H. Lindert

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: November 2009


This essay proposes a set of non-econometric tests using data on wage structure, school resource costs, public expenditures, taxes, and rates of return to explain anomalies in which richer political units deliver less education than poorer ones. Both the anomalies of education history, and its less surprising contrasts, fit broad patterns that can be revealed and partially explained using low-tech methods. Over most of human history, contrasts in the output of education were driven mainly by contrasts in the supply of tax support for mass education. Exogenous influences on the demand for, and the private supply of, education played only lesser roles. Pro-growth public education could have emerged a century or two earlier than it did, had the leading countries of Western Europe mustered the political will to fund it. Government underinvestment in mass education is demonstrated for England and Wales between 1717 and 1891. Differences in political support still account for most of today's education anomalies where the contrasts involve less developed regions. In today's highest-income settings, however, differences in tax funding lose their previous explanatory power. The postwar shift away from strong effects of school resources calls for a renewed introduction of historical context into the "does money matter" debate.

Suggested Citation

Lindert, Peter H., Revealing Failures in the History of School Finance (November 2009). NBER Working Paper No. w15491, Available at SSRN:

Peter H. Lindert (Contact Author)

University of California, Davis - Department of Economics ( email )

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Davis, CA 95616
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National Bureau of Economic Research (NBER)

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