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Pennies from heaven - Using exogenous tax variation to identify effects of school resources on pupil achievement

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Author Info

  • Hægeland, Torbjørn

    (Statistics Norway)

  • Raaum, Oddbjørn

    (Ragnar Frisch Centre for Economic Research)

  • Salvanes, Kjell Gunnar

    (The Norwegian School of Economics and Business Administration)

Abstract

Despite important policy implications associated with the allocation of education resources, evidence on the effectiveness of school inputs remains inconclusive. In part, this is due to endogenous allocation; families sort themselves non-randomly into school districts and school districts allocate money based in order to compensate (or reinforce) differences in child abilities, which leaves estimates of school input effects likely to be biased. Using variation in education expenditures induced by the location of natural resources in Norway, we examine the effect of school resources on pupil outcomes. We find that higher school expenditures, triggered by higher revenues from local taxes on hydropower plants, have a significantly positive effect on pupil performance at age 16. The IV estimates contrast with the standard cross-sectional estimates that reveal no effects of extra resources.

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Bibliographic Info

Paper provided by Oslo University, Department of Economics in its series Memorandum with number 18/2007.

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Length: 43 pages
Date of creation: 01 Sep 2007
Date of revision:
Handle: RePEc:hhs:osloec:2007_018

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Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
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Web page: http://www.oekonomi.uio.no/indexe.html
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Keywords: Pupil achievement; school resources;

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References

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Cited by:
  1. Destin, Mesmin, 2013. "Integrating resource-based and person-based approaches to understanding wealth effects on school achievement," Economics of Education Review, Elsevier, vol. 33(C), pages 171-178.
  2. Marte Rønning & Edvin Leuven & Hessel Oosterbeek, 2008. "Quasi-experimental estimates of the effect of class size on achievement in Norway," Working Paper Series 9308, Department of Economics, Norwegian University of Science and Technology.
  3. Andersen, Jørgen Juel & Fiva, Jon H. & Natvik, Gisle James, 2014. "Voting when the stakes are high," Journal of Public Economics, Elsevier, vol. 110(C), pages 157-166.
  4. Havnes, Tarjei & Mogstad, Magne, 2009. "Money for Nothing? Universal Child Care and Maternal Employment," IZA Discussion Papers 4504, Institute for the Study of Labor (IZA).
  5. Edwin Leuven & Marte Rønning, 2012. "Classroom grade composition and pupil achievement," Discussion Papers 722, Research Department of Statistics Norway.
  6. Stephen Gibbons & Sandra McNally, 2013. "The Effects of Resources Across School Phases: A Summary of Recent Evidence," CEP Discussion Papers dp1226, Centre for Economic Performance, LSE.
  7. De Witte, Kristof & Geys, Benny & Solondz, Catharina, 2012. "Public expenditures, educational outcomes and grade inflation: Theory and evidence from a policy intervention in the Netherlands," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2012-111, Social Science Research Center Berlin (WZB).
  8. Masakazu Hojo, 2011. "Education Production Function and Class-Size Effects in Japanese Public Schools," Global COE Hi-Stat Discussion Paper Series gd11-194, Institute of Economic Research, Hitotsubashi University.

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