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The Impact of Early Investments in Urban School Systems in the United States

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Abstract

Cities in the United States dramatically expanded spending on public education after World War I, with the average urban school district increasing per pupil expenditures by over 70 percent by 1924. We provide the first evaluation of these unprecedented investments in public education using a new dataset and plausibly exogenous growth in school spending generated by anti-German sentiment. We find that school resources significantly increased educational attainment and wages later in life, particularly for less advantaged children. Increases in expenditures can explain about 40 percent of the sizable increase in educational attainment of cohorts born between 1895 and 1913.

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  • Ethan Schmick & Allison Shertzer, 2026. "The Impact of Early Investments in Urban School Systems in the United States," Working Papers 26-15, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:102897
    DOI: 10.21799/frbp.wp.2026.15
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    2. Manon Garrouste & Miren Lafourcade, 2022. "Place-Based Policies: Opportunity for Deprived Schools or Zone-and-Shame Effect?," Post-Print hal-04329793, HAL.
    3. Lepinteur, Anthony & Nieto, Adrián, 2025. "All about the money? The gendered effect of education on industrial and occupational sorting," Labour Economics, Elsevier, vol. 92(C).

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    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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