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

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  • Hægeland, Torbjørn
  • Raaum, Oddbjørn
  • Salvanes, Kjell G.

Abstract

Evidence on the effectiveness of school inputs remains inconclusive, partly due to the challenge of identification as families sort themselves into school districts and resources are potentially allocated to compensate (or reinforce) differences in pupil abilities. Using variation in school resources induced by the location of waterfalls in Norway, we examine the effect of school expenditures on pupil performance at age 16. Higher school expenditures, triggered by higher revenues from local taxes on hydropower plants, have a significantly positive effect on pupil performance. This positive IV estimate contrasts a zero effect based on least squares. A downward biased estimate using a standard cross section estimator is expected in a context of compensating resource allocation across educational units.

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  • Hægeland, Torbjørn & Raaum, Oddbjørn & Salvanes, Kjell G., 2012. "Pennies from heaven? Using exogenous tax variation to identify effects of school resources on pupil achievement," Economics of Education Review, Elsevier, vol. 31(5), pages 601-614.
  • Handle: RePEc:eee:ecoedu:v:31:y:2012:i:5:p:601-614 DOI: 10.1016/j.econedurev.2012.03.004
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    Cited by:

    1. Tarjei Havnes & Magne Mogstad, 2009. "No Child Left Behind. Universal Child Care and Children's Long-Run Outcomes," Discussion Papers 582, Statistics Norway, Research Department.
    2. Andersen, Jørgen Juel & Fiva, Jon H. & Natvik, Gisle James, 2014. "Voting when the stakes are high," Journal of Public Economics, Elsevier, pages 157-166.
    3. Destin, Mesmin, 2013. "Integrating resource-based and person-based approaches to understanding wealth effects on school achievement," Economics of Education Review, Elsevier, pages 171-178.
    4. Figlio, D. & Karbownik, K. & Salvanes, K.G., 2016. "Education Research and Administrative Data," Handbook of the Economics of Education, Elsevier.
    5. Marie Hyland & Richard Layte & Seán Lyons & Selina McCoy & Mary Silles, 2015. "Are Classroom Internet Use and Academic Performance Higher after Government Broadband Subsidies to Primary Schools?," The Economic and Social Review, Economic and Social Studies, pages 399-428.
    6. Edwin Leuven & Marte Rønning, 2012. "Classroom grade composition and pupil achievement," Discussion Papers 722, Statistics Norway, Research Department.
    7. 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, pages 152-166.
    8. repec:eee:pubeco:v:152:y:2017:i:c:p:47-54 is not listed on IDEAS
    9. Reiling, Rune Borgan, 2016. "Does size matter? Educational attainment and cohort size," Journal of Urban Economics, Elsevier, pages 73-89.
    10. Marchand, Joseph & Weber, Jeremy, 2016. "Local Labor Markets and Natural Resources: A Synthesis of the Literature," Working Papers 2016-10, University of Alberta, Department of Economics, revised 24 Jan 2017.
    11. Marchand, Joseph & Weber, Jeremy, 2017. "The Local Effects of the Texas Shale Boom on Schools, Students, and Teachers," Working Papers 2017-12, University of Alberta, Department of Economics, revised 26 Jan 2018.
    12. 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, pages 663-693.
    13. Lixin He & Hiroshi Sato, 2013. "Income Redistribution In Urban China By Social Security System—An Empirical Analysis Based On Annual And Lifetime Income," Contemporary Economic Policy, Western Economic Association International, pages 314-331.
    14. Havnes, Tarjei & Mogstad, Magne, 2011. "Money for nothing? Universal child care and maternal employment," Journal of Public Economics, Elsevier, pages 1455-1465.
    15. 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.
    16. Edwin Leuven & Marte Rønning, 2016. "Classroom Grade Composition and Pupil Achievement," Economic Journal, Royal Economic Society, vol. 126(593), pages 1164-1192, June.
    17. Marcelo Araújo Castro, 2016. "Using A Quasi-Experiment To Identify The Effects Of Education Spending On School Quality," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 221, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Keywords

    Pupil achievement; School resources;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J - Labor and Demographic Economics

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