Inequality and Education Funding: Theory and Evidence from the U.S. School Districts

40 Pages Posted: 13 Nov 2010 Last revised: 19 Apr 2012

See all articles by Calin Arcalean

Calin Arcalean

ESADE Ramon Llull University - Department of Economics

Ioana C. Schiopu

ESADE Ramon Llull University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2012

Abstract

We investigate the relationship between inequality and public education funding in a model of probabilistic voting where the private option is available and voting participation differs across income groups. A change in inequality can have opposite effects at different income levels: higher inequality decreases public spending per student and increases enrollment in public schools in poor economies, while the opposite holds in the rich ones. A change in the tax base can also have non-monotonic effects. These theoretical predictions, with support in U.S. school district-level data, reconcile previous contradictory results in the political economy literature on redistribution and inequality.

Keywords: Education funding, Inequality, Political Economy

JEL Classification: D72, H42, I21, I22

Suggested Citation

Arcalean, Calin and Schiopu, Ioana C., Inequality and Education Funding: Theory and Evidence from the U.S. School Districts (March 1, 2012). Available at SSRN: https://ssrn.com/abstract=1707388 or http://dx.doi.org/10.2139/ssrn.1707388

Calin Arcalean

ESADE Ramon Llull University - Department of Economics ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

Ioana C. Schiopu (Contact Author)

ESADE Ramon Llull University - Department of Economics ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

HOME PAGE: http://profesores.esade.edu/ioanaschiopu

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