State Aid and Student Performance: A Supply-Demand Analysis
AbstractUsing a supply-demand framework, a six-equation model is specified to generate hypotheses about the relationship between state aid and student performance. Theory predicts that an increase in state or federal aid provides an incentive to decrease local funding, but that the disincentive associated with increased state aid is moderated when federal aid is compensatory. Applying the theory to Alabama county school test score data, results suggest that between 62 and 73 cents of the incremental state dollar goes to schools; the rest is absorbed by local taxpayers through incidence shifting, and by the federal government through the compensatory mechanism. Despite these 'leakages', results suggest that increased state aid can improve student performance provided the incremental funding goes to teacher salaries and not to reductions in class size. Poverty reduction or income growth, however, might accomplish the same ends at lower cost.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Education Economics.
Volume (Year): 14 (2006)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.tandfonline.com/CEDE20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rosalind Levacic & Anna Vignoles, 2002. "Researching the Links between School Resources and Student Outcomes in the UK: A Review of Issues and Evidence," Education Economics, Taylor & Francis Journals, vol. 10(3), pages 313-331.
- Brasington, D. M., 2003. "The supply of public school quality," Economics of Education Review, Elsevier, vol. 22(4), pages 367-377, August.
- Eric A. Hanushek, 2004. "What if there are no 'best practices'?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(2), pages 156-172, 05.
- George A. Akerlof & Rachel E. Kranton, 2002. "Identity and Schooling: Some Lessons for the Economics of Education," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1167-1201, December.
- 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.
- Hanushek, E.A.omson, W., 1996. "Assessing the Effects of School Resources on Student Performance : An Update," RCER Working Papers 424, University of Rochester - Center for Economic Research (RCER).
- Dewey, James & Husted, Thomas A. & Kenny, Lawrence W., 1999. "The ineffectiveness of school inputs: a product of misspecification?," Economics of Education Review, Elsevier, vol. 19(1), pages 27-45, February.
- David Mayston, . "Educational Attainment and Resource Use: Mystery or Econometric Misspecification," Discussion Papers 96/17, Department of Economics, University of York.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.