Does Public School Spending Raise Intergenerational Mobility? Evidence from U.S. School Finance Reforms

Posted: 15 Nov 2016 Last revised: 22 Jan 2018

Date Written: October 31, 2017

Abstract

This study examines whether investment in public schools can enhance equality of opportunity as measured by intergenerational income mobility (IGM). To estimate the causal effect of public school spending, I exploit the plausibly exogenous variation in school spending induced by the U.S. court-mandated school finance reforms. I use county-level college attendance rate and IGM constructed based on administrative tax records. Students are more likely to attend college due to additional resources in public schools. An increase in school spending raises IGM of children from high-income families. However, public school spending has little impact on IGM of low-income children. The school spending effects are concentrated among low-poverty counties. In particular, I find a significant increase in IGM of low-income children in low-poverty counties, which implies that the positive effect of school spending might be mitigated by negative environments in high poverty areas.

Keywords: Intergenerational Mobility, Public School Spending, School Finance Reform

JEL Classification: H52, I24, J62

Suggested Citation

Kwon, Sungoh, Does Public School Spending Raise Intergenerational Mobility? Evidence from U.S. School Finance Reforms (October 31, 2017). Available at SSRN: https://ssrn.com/abstract=2868404 or http://dx.doi.org/10.2139/ssrn.2868404

Sungoh Kwon (Contact Author)

University of Connecticut ( email )

Storrs, CT 06269-1063
United States

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