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The Allocation of Public School Expenditures

  • Kelly Bedard

    (UC - Santa Barbara)

  • William O. Brown, Jr.

    (Claremont McKenna College)

While the Serrano v Priest decisions and Proposition 13 effectively rendered California school district budgets exogenous, intra-district resource allocation remains largely at the discretion of school district administrations. As a result, Serrano v Priest and Proposition 13 alleviate concerns about the potentially endogenous relationship between student body composition and inter-district resource disparity and allow us to focus on consistently estimating the effect of classroom versus non-classroom spending. We find that teaching expenditures have a positive effect on student performance while nonteaching expenditures have a negative effect. Either the reallocation of $100 from administrative to classroom spending, with no change in overall expenditures, or an $100 increase aimed directly at the classroom moves the average California high school approximately 5 percentage points higher in the state test score rankings. These results are similar across grade levels (elementary, middle and high schools) and subject areas (mathematics, reading, language, spelling, social studies, and science). Our results suggest that both current and future educational expenditures should be targeted towards the classroom.

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Paper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2000-16.

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Handle: RePEc:clm:clmeco:2000-16
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  1. Eric A. Hanushek & Steven G. Rivkin, 1996. "Understanding the 20th Century Growth in U.S. School Spending," NBER Working Papers 5547, National Bureau of Economic Research, Inc.
  2. Kelly Bedard & William O. Brown, Jr. & Eric Helland, . "School Size and the Distribution of Test Scores," Claremont Colleges Working Papers 1999-11, Claremont Colleges.
  3. Silva, Fabio & Sonstelie, Jon, 1995. "Did Serrano Cause a Decline in School Spending," National Tax Journal, National Tax Association, vol. 48(2), pages 199-215, June.
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  9. Brunner, Eric & Sonstelie, Jon, 2003. "School finance reform and voluntary fiscal federalism," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2157-2185, September.
  10. Murray, Sheila E & Evans, William N & Schwab, Robert M, 1998. "Education-Finance Reform and the Distribution of Education Resources," American Economic Review, American Economic Association, vol. 88(4), pages 789-812, September.
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  12. Figlio, David N., 1997. "Did the "tax revolt" reduce school performance?," Journal of Public Economics, Elsevier, vol. 65(3), pages 245-269, September.
  13. Caroline M. Hoxby, 1998. "The Effects of Class Size and Composition on Student Achievement: New Evidence from Natural Population Variation," NBER Working Papers 6869, National Bureau of Economic Research, Inc.
  14. Brewer, Dominic J., 1996. "Does more school district administration lower educational productivity? Some evidence on the "Administrative Blob" in New York public schools," Economics of Education Review, Elsevier, vol. 15(2), pages 111-124, April.
  15. Dan D. Goldhaber & Dominic J. Brewer, 1997. "Why Don't Schools and Teachers Seem to Matter? Assessing the Impact of Unobservables on Educational Productivity," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 505-523.
  16. Thomas S. Dee, 2005. "Expense Preference and Student Achievement in School Districts," Eastern Economic Journal, Eastern Economic Association, vol. 31(1), pages 23-44, Winter.
  17. Grogger, Jeff, 1996. "Does School Quality Explain the Recent Black/White Wage Trend?," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 231-53, April.
  18. Eide, Eric & Showalter, Mark H., 1998. "The effect of school quality on student performance: A quantile regression approach," Economics Letters, Elsevier, vol. 58(3), pages 345-350, March.
  19. Heckman, James & Layne-Farrar, Anne & Todd, Petra, 1996. "Human Capital Pricing Equations with an Application to Estimating the Effect of Schooling Quality on Earnings," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 562-610, November.
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