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School Finance, Equivalent Educational Expenditure, and the Income Distribution: Equal Dollars or Equal Chances for Success?


  • Kathryn Wilson

    () (Department of Economics, Kent State University)

  • Kristina Lambright

    () (Master of Public, Administration Program, Binghamton University)

  • Timothy M. Smeeding

    () (Maxwell School and Center for Policy Research, Syracuse University)


This article breaks new ground in the debate on school finance and equality of per pupil school expenditures. We are able to merge school district data with the individual and family data of the Panel Study of Income Dynamics (PSID). This allows us to examine both student and school district characteristics and to assess several measures of equality of expenditure across the income distribution of parents and by funding sources. Unlike studies that use district-level data, our study finds a surprising degree of equality in the actual amounts expended per child in low- versus high-income families. But after adjusting expenditures for student body composition to reach equivalent education expenditures, we find a greater inequality in per pupil spending across the income distribution. In addition, there are substantial racial inequalities in expenditures across the income spectrum. In closing we discuss policy implications for school finance and increased equality of educational opportunity. © 2006 American Education Finance Association

Suggested Citation

  • Kathryn Wilson & Kristina Lambright & Timothy M. Smeeding, 2006. "School Finance, Equivalent Educational Expenditure, and the Income Distribution: Equal Dollars or Equal Chances for Success?," Education Finance and Policy, MIT Press, vol. 1(4), pages 396-424, September.
  • Handle: RePEc:tpr:edfpol:v:1:y:2006:i:4:p:396-424

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    Cited by:

    1. Branko Milanovic & Sean Higgins & Nora Lustig & Whitney Ruble & Timothy M. Smeeding, 2016. "Comparing the Incidence of Taxes and Social Spending in Brazil and the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62, pages 22-46, August.

    More about this item


    school finance; education spending; income distribution; equality; Panel Study of Income Dynamics;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid


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