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

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  • Torbjørn Hægeland
  • Oddbjørn Raaum
  • Kjell G. Salvanes

    ()
    (Statistics Norway)

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 Research Department of Statistics Norway in its series Discussion Papers with number 508.

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Date of creation: Jul 2007
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Handle: RePEc:ssb:dispap:508

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Keywords: Pupil achievement; school resources;

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Citations

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Cited by:
  1. Jørgen Juel Andersen & Jon H. Fiva & Gisle James Natvik, 2010. "Voting when the Stakes are High," CESifo Working Paper Series 3167, CESifo Group Munich.
  2. Havnes, Tarjei & Mogstad, Magne, 2011. "Money for nothing? Universal child care and maternal employment," Journal of Public Economics, Elsevier, vol. 95(11), pages 1455-1465.
  3. Edwin Leuven & Marte Rønning, 2012. "Classroom grade composition and pupil achievement," Discussion Papers 722, Research Department of Statistics Norway.
  4. De Witte, Kristof & Geys, Benny & Solondz, Catharina, 2014. "Public expenditures, educational outcomes and grade inflation: Theory and evidence from a policy intervention in the Netherlands," Economics of Education Review, Elsevier, vol. 40(C), pages 152-166.
  5. 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.
  6. Edwin Leuven & Hessel Oosterbeek & Marte Rønning, 2008. "Quasi-experimental Estimates of the Effect of Class Size on Achievement in Norway," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 663-693, December.
  7. 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.
  8. 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.

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