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Pennies from Heaven? Using Exogeneous Tax Variation to Identify Effects of School Resources on Pupil Achievements

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Author Info
Haegeland, Torbjørn () (Statistics Norway)
Raaum, Oddbjørn () (Ragnar Frisch Centre for Economic Research)
Salvanes, Kjell G. () (Norwegian School of Economics and Business Administration)

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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 positive IV estimates contrast with the standard cross-sectional estimates that reveal no effects of extra resources.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3561.

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Length: 54 pages
Date of creation: Jun 2008
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Handle: RePEc:iza:izadps:dp3561

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Related research
Keywords: pupil achievement; school resources;

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Find related papers by JEL classification:
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
I28 - Health, Education, and Welfare - - Education - - - Government Policy
J00 - Labor and Demographic Economics - - General - - - General

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References listed on IDEAS
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Cited by:
(explanations, 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.)

  1. Leuven, Edwin & Oosterbeek, Hessel & Rønning, Marte, 2008. "Quasi-Experimental Estimates of the Effect of Class Size on Achievement in Norway," IZA Discussion Papers 3474, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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