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Economic inequality and the provision of schooling

  • Thomas A. Downes
  • David N. Figlio

This paper was presented at the conference "Unequal incomes, unequal outcomes? Economic inequality and measures of well-being" as part of session 3, "Education and crime in urban neighborhoods." The conference was held at the Federal Reserve Bank of New York on May 7, 1999. The authors examine the empirical evidence on the relationship between school finance reform and student outcomes, review the economic literature in the field, and present new evidence of the effects of reform on community and school composition. They argue that if one's goal is to reduce income inequality substantially, one should not look to school finance reform as a particularly effective policy instrument. Even the most optimistic estimates of the impact of school finance reform on the distribution of student performance indicate that these effects are relatively small. Furthermore, the authors note that these small gains may come at a cost - the movement of higher income families into private sector schools, a development that would lead to less diversity within the public schools.

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File URL: http://www.newyorkfed.org/research/epr/99v05n3/9909down.pdf
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Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review.

Volume (Year): (1999)
Issue (Month): Sep ()
Pages: 99-110

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Handle: RePEc:fip:fednep:y:1999:i:sep:p:99-110:n:v.5no.3
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  8. Aaronson, Daniel, 1999. "The Effect of School Finance Reform on Population Heterogeneity," National Tax Journal, National Tax Association, vol. 52(n. 1), pages 5-29, March.
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  10. Bishop, John Hillman, 1989. "Is the Test Score Decline Responsible for the Productivity Growth Decline?," American Economic Review, American Economic Association, vol. 79(1), pages 178-97, March.
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  13. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-95, October.
  14. Caroline M. Hoxby, 1998. "All School Finance Equalizations Are Not Created Equal," NBER Working Papers 6792, National Bureau of Economic Research, Inc.
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  16. Murray, Sheila E & Evans, William N & Schwab, Robert M, 1998. "Education-Finance Reform and the Distribution of Education Resources," American Economic Review, American Economic Association, vol. 88(4), pages 789-812, September.
  17. Alan Krueger, 1998. "Reassessing the View that American Schools Are Broken," Working Papers 774, Princeton University, Department of Economics, Industrial Relations Section..
  18. Eric A. Hanushek, 1998. "Conclusions and controversies about the effectiveness of school resources," Economic Policy Review, Federal Reserve Bank of New York, issue Mar, pages 11-27.
  19. Loury, Linda Datcher & Garman, David, 1995. "College Selectivity and Earnings," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 289-308, April.
  20. Brueckner, Jan K. & Lee, Kangoh, 1989. "Club theory with a peer-group effect," Regional Science and Urban Economics, Elsevier, vol. 19(3), pages 399-420, August.
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