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The Allocation of Public School Expenditures

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  • Kelly Bedard

    (UC - Santa Barbara)

  • William O. Brown, Jr.

    (Claremont McKenna College)

Abstract

While the Serrano v Priest decisions and Proposition 13 effectively rendered California school district budgets exogenous, intra-district resource allocation remains largely at the discretion of school district administrations. As a result, Serrano v Priest and Proposition 13 alleviate concerns about the potentially endogenous relationship between student body composition and inter-district resource disparity and allow us to focus on consistently estimating the effect of classroom versus non-classroom spending. We find that teaching expenditures have a positive effect on student performance while nonteaching expenditures have a negative effect. Either the reallocation of $100 from administrative to classroom spending, with no change in overall expenditures, or an $100 increase aimed directly at the classroom moves the average California high school approximately 5 percentage points higher in the state test score rankings. These results are similar across grade levels (elementary, middle and high schools) and subject areas (mathematics, reading, language, spelling, social studies, and science). Our results suggest that both current and future educational expenditures should be targeted towards the classroom.

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Paper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2000-16.

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Handle: RePEc:clm:clmeco:2000-16

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Keywords: school spending; test scores;

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  1. 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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Cited by:
  1. Rajashri Chakrabarti & Sarah Sutherland, 2012. "Precarious slopes? The Great Recession, federal stimulus, and New Jersey schools," Staff Reports 538, Federal Reserve Bank of New York.

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