Finding the fat: The relative impact of budget fluctuations on African-American schools

On average, per pupil expenditures were much lower in schools attended by African-American children than in schools attended by whites during the period of de jure segregation. Little is known, however, about what motivated school boards to maintain this inequality or why they funded African-American schools at all. Using newly collected data on schools in early twentieth-century Georgia and exploiting a funding shock resulting from the rules regarding appropriations from the State School Fund, this paper examines how school boards divvied up the proceeds of exogenous shifts in school budgets by race. In response to a one dollar per pupil budget cut, instructional expenditures in white schools fell by $1.21 per pupil, while they remained almost unchanged in African-American schools. Thus, whites, rather than African Americans, bore the brunt of budget cuts, indicating that there was little fat to trim from the budgets of African-American schools.