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Economic inequality and the provision of schooling

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Author Info

  • Thomas A. Downes
  • David N. Figlio

Abstract

This paper was presented at the conference "Unequal incomes, unequal outcomes? Economic inequality and measures of well-being" as part of session 3, "Education and crime in urban neighborhoods." The conference was held at the Federal Reserve Bank of New York on May 7, 1999. The authors examine the empirical evidence on the relationship between school finance reform and student outcomes, review the economic literature in the field, and present new evidence of the effects of reform on community and school composition. They argue that if one's goal is to reduce income inequality substantially, one should not look to school finance reform as a particularly effective policy instrument. Even the most optimistic estimates of the impact of school finance reform on the distribution of student performance indicate that these effects are relatively small. Furthermore, the authors note that these small gains may come at a cost - the movement of higher income families into private sector schools, a development that would lead to less diversity within the public schools.

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Bibliographic Info

Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review.

Volume (Year): (1999)
Issue (Month): Sep ()
Pages: 99-110

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Handle: RePEc:fip:fednep:y:1999:i:sep:p:99-110:n:v.5no.3

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Keywords: Income distribution ; Income ; Education;

References

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  1. 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.
  2. Mary Corcoran & Roger Gordon & Deborah Laren & Gary Solon, 1992. "The Association between Men's Economic Status and Their Family and Community Origins," Journal of Human Resources, University of Wisconsin Press, vol. 27(4), pages 575-601.
  3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  4. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-95, October.
  5. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
  6. Loury, Linda Datcher & Garman, David, 1995. "College Selectivity and Earnings," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 289-308, April.
  7. Shea, John, 2000. "Does parents' money matter?," Journal of Public Economics, Elsevier, vol. 77(2), pages 155-184, August.
  8. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
  9. David Card & Abigail A. Payne, 1997. "School Finance Reform, the Distribution of School Spending, and the Distribution of SAT Scores," Working Papers 766, Princeton University, Department of Economics, Industrial Relations Section..
  10. Steven N. Durlauf, 1992. "A Theory of Persistent Income Inequality," NBER Working Papers 4056, National Bureau of Economic Research, Inc.
  11. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
  12. Fischel, William A., 1989. "Did Serrano Cause Proposition 13?," National Tax Journal, National Tax Association, vol. 42(4), pages 465-73, December.
  13. Brueckner, Jan K. & Lee, Kangoh, 1989. "Club theory with a peer-group effect," Regional Science and Urban Economics, Elsevier, vol. 19(3), pages 399-420, August.
  14. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
  15. Alan Krueger, 1998. "Reassessing the View that American Schools Are Broken," Working Papers 774, Princeton University, Department of Economics, Industrial Relations Section..
  16. Eric A. Hanushek, 1998. "Conclusions and controversies about the effectiveness of school resources," Economic Policy Review, Federal Reserve Bank of New York, issue Mar, pages 11-27.
  17. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
  18. Daniel Aaronson, 1998. "The effect of school finance reform on population heterogeneity," Working Paper Series WP-98-11, Federal Reserve Bank of Chicago.
  19. Bishop, John Hillman, 1989. "Is the Test Score Decline Responsible for the Productivity Growth Decline?," American Economic Review, American Economic Association, vol. 79(1), pages 178-97, March.
  20. Murray, Sheila E & Evans, William N & Schwab, Robert M, 1998. "Education-Finance Reform and the Distribution of Education Resources," American Economic Review, American Economic Association, vol. 88(4), pages 789-812, September.
  21. repec:fth:prinin:395 is not listed on IDEAS
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Citations

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Cited by:
  1. Cohen-Zada, Danny & Justman, Moshe, 2003. "The political economy of school choice: linking theory and evidence," Journal of Urban Economics, Elsevier, vol. 54(2), pages 277-308, September.
  2. Ana Liberato & Carlton Pomeroy & Dana Fennell, 2006. "Well-Being Outcomes in Bolivia: Accounting for the Effects of Ethnicity and Regional Location," Social Indicators Research, Springer, vol. 76(2), pages 233-262, 04.
  3. David N. Figlio & Deborah Fletcher, 2010. "Suburbanization, Demographic Change and the Consequences for School Finance," NBER Working Papers 16137, National Bureau of Economic Research, Inc.
  4. Carlton Pomeroy & Steve Jacob, 2004. "From Mangos to Manufacturing: Uneven Development and Its Impact on Social Well-being in the Dominican Republic," Social Indicators Research, Springer, vol. 65(1), pages 73-107, January.

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