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Comparable Wages, Inflation, and School Finance Equity

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  • Lori L. Taylor

    () (Bush School of Government and Public Service Texas A&M University)

Abstract

A Comparable Wage Index (CWI) is an attractive mechanism for measuring geographic variations in the cost of education. A CWI measures uncontrollable variations in educator pay by observing systematic variations in the earnings of comparable workers who are not educators. Together, the 2000 census and the Occupational Employment Statistics survey support the construction of just such an index. The resulting panel of index values measures wage levels in all parts of the United States from 1997 through 2004 and reveals substantial variation in purchasing power both across school districts and across time. Such inequalities undermine the equity and adequacy goals of school finance formulas. If states were successfully directing additional resources to school districts in high-cost environments, then measured inequality within states should fall when differences in purchasing power are taken into account. Instead, cost adjustment widens the spending gap in all but a handful of states. © 2006 American Education Finance Association

Suggested Citation

  • Lori L. Taylor, 2006. "Comparable Wages, Inflation, and School Finance Equity," Education Finance and Policy, MIT Press, vol. 1(3), pages 349-371, June.
  • Handle: RePEc:tpr:edfpol:v:1:y:2006:i:3:p:349-371
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    References listed on IDEAS

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    Cited by:

    1. Shawna Grosskopf & Kathy Hayes & Lori Taylor & William Weber, 2015. "Centralized or decentralized control of school resources? A network model," Journal of Productivity Analysis, Springer, vol. 43(2), pages 139-150, April.
    2. Elizabeth Dhuey & Stephen Lipscomb, 2013. "Funding Special Education by Total District Enrollment: Advantages, Disadvantages, and Policy Considerations," Education Finance and Policy, MIT Press, pages 316-331.

    More about this item

    Keywords

    wages; teacher pay; school finance; education finance;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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