Racial Segregation and Public School Expenditure

44 Pages Posted: 23 Aug 2006

See all articles by Eliana La Ferrara

Eliana La Ferrara

University of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER); Centre for Economic Policy Research (CEPR)

Angelo Mele

University of Illinois at Urbana-Champaign - Department of Economics

Date Written: July 2006

Abstract

This paper explores the effect of racial segregation on public school expenditure in US metropolitan areas and school districts. Our starting point is the literature that relates public good provision to the degree of racial fragmentation in the community. We argue that looking at fragmentation alone may be misleading and that the geographic distribution of different racial groups needs to be taken into account. Greater segregation is associated with more homogeneity in some subareas and more heterogeneity in others, and this matters if decisions on spending are taken at aggregation levels lower than the MSA. For given fragmentation, the extent of segregation conveys information on households' possibility to sort into relatively more or less homogeneous jurisdictions. We account for the potential endogeneity of racial segregation and find that the latter has a positive impact on average public school expenditure both at the MSA and at the district level. At the same time, increased segregation leads to more inequality in spending across districts of the same MSA, thus worsening the relative position of poorer districts.

Keywords: segregation, public school expenditure, racial fragmentation

JEL Classification: H41, H73, J15

Suggested Citation

La Ferrara, Eliana and Mele, Angelo, Racial Segregation and Public School Expenditure (July 2006). CEPR Discussion Paper No. 5750. Available at SSRN: https://ssrn.com/abstract=926166

Eliana La Ferrara (Contact Author)

University of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER) ( email )

Via Roentgen 1
Milan, 20136
Italy
+39 02 5836 3328 (Phone)
+39 02 5836 3302 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Angelo Mele

University of Illinois at Urbana-Champaign - Department of Economics ( email )

410 David Kinley Hall
1407 W. Gregory
Urbana, IL 61801
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
14
Abstract Views
1,325
PlumX Metrics