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Evidence on the Impact of State Government on Primary and Secondary Education and the Equity-Efficiency Trade-Off

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  • Husted, Thomas A
  • Kenny, Lawrence W

Abstract

State governments may affect the productivity of primary and secondary education in two ways. First, various regulations imposed on local school districts are expected to make schools less efficient. Second, state efforts to reduce inequality in education spending make it more difficult for voters to increase school quality, which should lead to less voter monitoring of schools and thus less efficient schools. Our empirical analysis of state Scholastic Aptitude Test (SAT) scores from 1987 to 1992 provides evidence on both effects. The state's revenue share, which captures state meddling in local decisions, has the expected negative impact on school efficiency. But our novel result is that state-induced spending equalization also lowers average test scores but has had little if any effect on reducing the disparity in student achievement. These results bring into question policy efforts designed to shift education responsibilities from local governments to state and federal governments. Copyright 2000 by the University of Chicago.

Suggested Citation

  • Husted, Thomas A & Kenny, Lawrence W, 2000. "Evidence on the Impact of State Government on Primary and Secondary Education and the Equity-Efficiency Trade-Off," Journal of Law and Economics, University of Chicago Press, vol. 43(1), pages 285-308, April.
  • Handle: RePEc:ucp:jlawec:v:43:y:2000:i:1:p:285-308
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    File URL: http://dx.doi.org/10.1086/467456
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    References listed on IDEAS

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    2. Hanushek, Eric A & Rivkin, Steven G & Taylor, Lori L, 1996. "Aggregation and the Estimated Effects of School Resources," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 611-627, November.
    3. Southwick, Lawrence Jr & Gill, Indermit S., 1997. "Unified salary schedule and student SAT scores: Adverse effects of adverse selection in the market for secondary school teachers," Economics of Education Review, Elsevier, vol. 16(2), pages 143-153, April.
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    5. Graham, Amy E. & Husted, Thomas A., 1993. "Understanding state variations in SAT scores," Economics of Education Review, Elsevier, vol. 12(3), pages 197-202, September.
    6. Downes, Thomas A., 1992. "Evaluating the Impact of School Finance Reform on the Provision of Public Education: The California Case," National Tax Journal, National Tax Association, vol. 45(4), pages 405-419, December.
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    8. William N. Evans & Sheila E. Murray & Robert M. Schwab, 1997. "Schoolhouses, courthouses, and statehouses after Serrano," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 10-31.
    9. David Card & Abigail A. Payne, 1997. "School Finance Reform, the Distribution of School Spending, and the Distribution of SAT Scores," Working Papers 766, Princeton University, Department of Economics, Industrial Relations Section..
    10. Behrendt, Amy & Eisenach, Jeffrey & Johnson, William R., 1986. "Selectivity bias and the determinants of SAT scores," Economics of Education Review, Elsevier, vol. 5(4), pages 363-371, August.
    11. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
    12. Dynarski, Mark, 1987. "The Scholastic Aptitude Test: Participation and performance," Economics of Education Review, Elsevier, vol. 6(3), pages 263-273, June.
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    Citations

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    Cited by:

    1. Clifford A. Grammich, 2005. "Many Faiths of Many Regions Continuities and Changes Among Religious Adherents Across U.S. Counties," Working Papers 211, RAND Corporation.
    2. Joshua Hall, 2007. "Local School Finance and Productive Efficiency: Evidence from Ohio," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(3), pages 289-301, September.
    3. Michelle Phillips, 2014. "State involvement in limiting textbook choice by school districts," Public Choice, Springer, vol. 160(1), pages 181-203, July.
    4. Thomas Downes, 2003. "School Finance Reform and School Quality: Lessons from Vermont," Discussion Papers Series, Department of Economics, Tufts University 0309, Department of Economics, Tufts University.
    5. Thapa, Amrit, 2013. "Does private school competition improve public school performance? The case of Nepal," International Journal of Educational Development, Elsevier, vol. 33(4), pages 358-366.
    6. Lott, Johnathan & Kenny, Lawrence W., 2013. "State teacher union strength and student achievement," Economics of Education Review, Elsevier, vol. 35(C), pages 93-103.
    7. Thomas A. Downes, 2002. "Do state governments matter?: a review of the evidence on the impact on educational outcomes of the changing role of the states in the financing of public education," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 47(Jun), pages 143-180.
    8. repec:kap:iaecre:v:14:y:2008:i:2:p:228-241 is not listed on IDEAS
    9. Kalyan Chakraborty & John Poggio, 2008. "Efficiency and Equity in School Funding: A Case Study for Kansas," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(2), pages 228-241, May.
    10. Lawrence Kenny, 2005. "The public choice of educational choice," Public Choice, Springer, vol. 124(1), pages 205-222, July.
    11. Daniele Coen-Pirani, 2016. "Fiscal Centralization: Theory and Evidence from the Great Depression," 2016 Meeting Papers 783, Society for Economic Dynamics.
    12. Dewey, James & Husted, Thomas A. & Kenny, Lawrence W., 1999. "The ineffectiveness of school inputs: a product of misspecification?," Economics of Education Review, Elsevier, vol. 19(1), pages 27-45, February.
    13. Clifford A. Grammich, 2005. "Many Faiths of Many Regions Continuities and Changes Among Religious Adherents Across U.S. Counties," Working Papers WR-211, RAND Corporation.
    14. Eric J. Brunner & Jon Sonstelie, 2006. "California's School Finance Reform: An Experiment in Fiscal Federalism," Working papers 2006-09, University of Connecticut, Department of Economics.

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