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Public Education Inequality and Intergenerational Mobility

Author

Listed:
  • Angela Zheng
  • James Graham

Abstract

Public school funding depends heavily on local property tax revenue. Consequently, low-income households have limited access to quality education in neighborhoods with high house prices. In a dynamic life-cycle model with neighborhood choice and endogenous local school quality, we show that this property tax funding mechanism reduces intergenerational mobility and accounts for the spatial correlation between house prices and mobility. A housing voucher experiment improves access to schools, with benefits that can last for multiple generations. Additionally, a policy that redistributes property tax revenues equally across schools improves mobility and welfare. However, the benefits can take generations to be realized.

Suggested Citation

  • Angela Zheng & James Graham, 2022. "Public Education Inequality and Intergenerational Mobility," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(3), pages 250-282, July.
    • Handle: RePEc:aea:aejmac:v:14:y:2022:i:3:p:250-82
    DOI: 10.1257/mac.20180466
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    Citations

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    Cited by:

    1. Ryan Bacic & Angela Zheng, 2024. "Race and the Income‐Achievement Gap," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 5-23, January.
    2. Eckert,Fabian & Kleineberg,Tatjana Karina, 2021. "Saving the American Dream ? Education Policies in Spatial General Equilibrium," Policy Research Working Paper Series 9574, The World Bank.
    3. Victoria Gregory & Julian Kozlowski & Hannah Rubinton, 2022. "The Impact of Racial Segregation on College Attainment in Spatial Equilibrium," Working Papers 2022-036, Federal Reserve Bank of St. Louis, revised 24 Jul 2023.
    4. Andlib, Zubaria & Sadiq, Maqsood & Scicchitano, Sergio, 2024. "Intergenerational (im)mobility in Pakistan: Is the social elevator broken?," GLO Discussion Paper Series 1367, Global Labor Organization (GLO).
    5. Chen, Jing & Li, Rui, 2023. "Pay for elite private schools or pay for higher housing prices? Evidence from an exogenous policy shock," Journal of Housing Economics, Elsevier, vol. 60(C).

    More about this item

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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