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Suing for your supper? Resource allocation, teacher compensation and finance lawsuits

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  • Sims, David P.
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    Abstract

    Despite a large literature examining the effect of litigation on education finance and student achievement, there is relatively little recent evidence about how extra resources generated by litigation are spent. This paper uses national data to examine the effects of high court finance rulings from 1991 to 2002 on school districts' education spending: including the categories of capital, plant, and support expenses as well as the teacher wage bill. It also decomposes the latter change into a quantity effect from teacher hiring and a price effect due to increased wages. I find that the largest spending increase comes from salary increases to teachers, with other large increases for hiring more instructors and increasing support spending. Further evidence suggests that the higher salaries are manifest more in an increased experience premium rather than higher salaries for new teacher hires. This evidence helps rationalize the role teachers unions play in supporting, and sometimes originating finance lawsuits.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0272775711000902
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    Bibliographic Info

    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 30 (2011)
    Issue (Month): 5 (October)
    Pages: 1034-1044

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    Handle: RePEc:eee:ecoedu:v:30:y:2011:i:5:p:1034-1044

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    Web page: http://www.elsevier.com/locate/econedurev

    Related research

    Keywords: Educational finance Teacher salaries Resource allocation;

    References

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    1. Alan B. Krueger, 1997. "Experimental Estimates of Education Production Functions," NBER Working Papers 6051, National Bureau of Economic Research, Inc.
    2. Sims, David P., 2009. "Crowding Peter to educate Paul: Lessons from a class size reduction externality," Economics of Education Review, Elsevier, vol. 28(4), pages 465-473, August.
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    4. Card, David & Payne, A. Abigail, 2002. "School finance reform, the distribution of school spending, and the distribution of student test scores," Journal of Public Economics, Elsevier, vol. 83(1), pages 49-82, January.
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    12. Thomas Downes & David Figlio, 1998. "School Finance Reforms, Tax Limits, and Student Performance: Do Reforms Level-Up or Dumb Down?," Discussion Papers Series, Department of Economics, Tufts University 9805, Department of Economics, Tufts University.
    13. Francis Teal & Geeta Kingdon, 2005. "Does performance related pay for teachers improve student performance? Some evidence from India," Economics Series Working Papers GPRG-WPS-014, University of Oxford, Department of Economics.
    14. Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 1999. "Do Higher Salaries Buy Better Teachers?," NBER Working Papers 7082, National Bureau of Economic Research, Inc.
    15. Stephanie Riegg Cellini & Fernando Ferreira & Jesse Rothstein, 2010. "The Value of School Facility Investments: Evidence from a Dynamic Regression Discontinuity Design," The Quarterly Journal of Economics, MIT Press, vol. 125(1), pages 215-261, February.
    16. Caroline M. Hoxby, 2001. "All School Finance Equalizations Are Not Created Equal," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1189-1231, November.
    17. Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 1998. "Teachers, Schools, and Academic Achievement," NBER Working Papers 6691, National Bureau of Economic Research, Inc.
    18. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
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