Education Finance Reform and Investment in Human Capital: Lessons from California
40 Pages Posted: 17 Aug 2000 Last revised: 5 Mar 2022
Date Written: November 1995
Abstract
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.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Demographic Structure and the Political Economy of Public Education
-
Demographic Characteristics and the Public Bundle
By David M. Cutler, Douglas W. Elmendorf, ...
-
An Empirical Analysis of the Welfare Magnet Debate Using the Nlsy
-
Government Decision-Making and the Incidence of Federal Mandates
-
Demographic Change and the Demand for Environmental Regulation
-
Taxation with Representation: Intergovernmental Grants in a Plebiscite Democracy
-
Unmarried Parenthood and Redistributive Politics
By Lena Edlund, Laila Haider, ...
-
The Role of Paternity Presumption and Custodial Rights for Understanding Marriage Patterns
By Lena Edlund