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Education Spending and State Economic Growth: Are All Dollars Created Equal?

Listed author(s):
  • John Deskins

    (Creighton University, Omaha, NE, USA,

  • Brian Hill

    (Salisbury University, Salisbury, MD, USA)

  • Laura Ullrich

    (Winthrop University, Rock Hill, SC, USA)

Registered author(s):

    This article contributes to the literature on the effect of state and local education spending on U.S. state economic growth by separately analyzing higher and K-12 education spending and by taking into account the possibility that education spending may generate spillover effects to neighboring states. Results from a series of fixed-effects regressions using a 1992-2002 panel of state-level data indicate that increased spending on higher education generally exhibits a relatively large negative effect on private sector employment or gross state product growth when the increase in education spending is financed through own-source revenue. Results do not identify a statistically significant relationship between K-12 education spending and economic growth. This finding is an important clarification in the literature because an analysis of combined higher and K-12 education spending yields an overall negative effect. Results do not provide consistent evidence of cross-state spillover effects associated with either form of education spending.

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    Article provided by in its journal Economic Development Quarterly.

    Volume (Year): 24 (2010)
    Issue (Month): 1 (February)
    Pages: 45-59

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    Handle: RePEc:sae:ecdequ:v:24:y:2010:i:1:p:45-59
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