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The Effect of a Differential Add-On Grant: Title I and Local Education Spending


  • Martin Feldstein


Analyses of intergovernmental aid emphasize the difference between matching grants and block grants. Since a block grant has only an income effect and no price effect, conventional theory predicts that block grants have a very small impact on the local government's expenditure on the favored activity. There is, however, a different type of block grant referred to in this paper as a "differential add-on grant." The purpose of the present paper is to measure the effectiveness of one such add-on grant, the federal government's program to increase local education spending on pupils from low-income families. The evidence implies that this aid is quite effective and therefore suggests that the traditional theory of intergovernmental aid should be extended to recognize this type of grant.

Suggested Citation

  • Martin Feldstein, 1978. "The Effect of a Differential Add-On Grant: Title I and Local Education Spending," Journal of Human Resources, University of Wisconsin Press, vol. 13(4), pages 443-458.
  • Handle: RePEc:uwp:jhriss:v:13:y:1978:i:4:p:443-458

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    References listed on IDEAS

    1. Kiesling, Herbert J., 1984. "Assignment practices and the relationship of instructional time to the reading performance of elementary school children," Economics of Education Review, Elsevier, vol. 3(4), pages 341-350, August.
    2. Link, Charles R. & Mulligan, James G., 1986. "The merits of a longer school day," Economics of Education Review, Elsevier, vol. 5(4), pages 373-381, August.
    3. Ronald G. Ehrenberg & Richard P. Chaykowski & Randy A. Ehrenberg, 1988. "Determinants of the Compensation and Mobility of School Superintendents," ILR Review, Cornell University, ILR School, vol. 41(3), pages 386-401, April.
    4. Levin, Henry M. & Tsang, Mun C., 1987. "The economics of student time," Economics of Education Review, Elsevier, vol. 6(4), pages 357-364, August.
    5. Stephen L. Jacobson, 1989. "The Effects of Pay Incentives on Teacher Absenteeism," Journal of Human Resources, University of Wisconsin Press, vol. 24(2), pages 280-286.
    6. Steven G. Allen, 1983. "How Much Does Absenteeism Cost?," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 379-393.
    7. Chelius, James R., 1981. "Understanding absenteeism: The potential contribution of economic theory," Journal of Business Research, Elsevier, vol. 9(4), pages 409-418, December.
    8. Allen, Steven G, 1981. "An Empirical Model of Work Attendance," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 77-87, February.
    9. Summers, Anita A & Wolfe, Barbara L, 1977. "Do Schools Make a Difference?," American Economic Review, American Economic Association, vol. 67(4), pages 639-652, September.
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    Cited by:

    1. Gordon, Nora, 2004. "Do federal grants boost school spending? Evidence from Title I," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1771-1792, August.
    2. Chakrabarti, Rajashri & Sutherland, Sarah, 2013. "Precarious slopes? The Great Recession, federal stimulus, and New Jersey schools," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 41-65.
    3. Rhee, Se-Koo, 1996. "The impact of intergovernmental grants-in-aid on public school expenditure under the segregated school system," ISU General Staff Papers 1996010108000012396, Iowa State University, Department of Economics.
    4. Baicker, Katherine & Clemens, Jeffrey & Singhal, Monica, 2012. "The rise of the states: U.S. fiscal decentralization in the postwar period," Journal of Public Economics, Elsevier, vol. 96(11), pages 1079-1091.
    5. Rebecca J. Acosta, 2001. "How Do Colleges Respond to Changes in Federal Student Aid?," UCLA Economics Working Papers 808, UCLA Department of Economics.

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