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

37 Pages Posted: 11 Dec 2010  

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: September 1, 2010

Abstract

We investigate the relationship between inequality and education funding in a model of probabilistic voting over public education spending where the private option is available. 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. We also study the implications of different voting participation across income groups. The predictions of the model are supported by U.S. school district-level data.

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 (September 1, 2010). Available at SSRN: https://ssrn.com/abstract=1722167 or http://dx.doi.org/10.2139/ssrn.1722167

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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