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Why Do Households Without Children Support Local Public Schools?

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Author Info
Christian A. L. Hilber
Christopher J. Mayer

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Abstract

While residents receive similar benefits from many local government programs, only about one-third of all households have children in public schools. We argue that capitalization of school spending into house prices can encourage residents to support spending on schools, even if the residents themselves will never have children in schools. We identify a proxy for the extent of capitalizationâ€â€the supply of land available for new developmentâ€â€and show that in response to a plausibly exogenous spending shock in Massachusetts, towns with little undeveloped land have larger changes in house prices, but smaller changes in quantity (construction). Towns with little available land also spend more on schools. We extend these results using data from school districts in 46 states, showing that per pupil spending is positively related to the percentage of developed land. This positive correlation persists only in districts where the median resident is a homeowner and is stronger in districts with more elderly residents who do not use school services and have a shorter expected duration in their home. These findings support models in which house price capitalization encourages more efficient provision of public services and may explain why some elderly residents support school spending.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10804.

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Date of creation: Oct 2004
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Handle: RePEc:nbr:nberwo:10804

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Find related papers by JEL classification:
H4 - Public Economics - - Publicly Provided Goods
H7 - Public Economics - - State and Local Government; Intergovernmental Relations
I2 - Health, Education, and Welfare - - Education
R31 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Housing Supply and Markets

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Cited by:
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  1. Alejandra Cattaneo & Stefan C. Wolter, 2007. "Are The Elderly A Threat To Educational Expenditures?," Economics of Education Working Paper Series 0003, University of Zurich, Institute for Strategy and Business Economics (ISU). [Downloadable!]
    Other versions:
  2. Christian A.L. Hilber, 2003. "Neighborhood externality risk and the homeownership status of properties," Proceedings, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
    Other versions:
  3. Berardino Cesi, 2007. "Do childless households support local public provision of education," Discussion Papers in Economics 07/02, Department of Economics, University of Leicester. [Downloadable!]
  4. Berardino Cesi, 2009. "Local public education and childless voting: the arising of an "ends with the middle" coalition," THEMA Working Papers 2009-07, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise. [Downloadable!]
  5. Fernando Ferreira & Joseph Gyourko & Joseph Tracy, 2008. "Housing busts and household mobility," Staff Reports 350, Federal Reserve Bank of New York. [Downloadable!]
    Other versions:
  6. Hilber, Christian A. L., 2007. "New Housing Supply and the Dilution of Social Capital," MPRA Paper 11620, University Library of Munich, Germany, revised 14 Nov 2008. [Downloadable!]
    Other versions:
  7. Eric Brunner & Jennifer Imazeki & Stephen L. Ross, 2006. "Universal Vouchers and Racial Segregation," Working papers 2006-01, University of Connecticut, Department of Economics, revised Aug 2008. [Downloadable!]
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