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Do Public Expenditures Improve Child Outcomes in the U.S.? A Comparison across Fifty States

  • Kristen Harknett
  • Irwin Garfinkel
  • Jay Bainbridge
  • Timothy Smeeding
  • Nancy Folbre
  • Sara McLanahan

Our paper utilizes variation across the 50 U.S. states to examine the relationship between public expenditures on children and child outcomes. We find that public expenditures on children are related to better child outcomes across a wide range of indicators, including measures of child mortality, elementary-school test scores, and adolescent behavioral outcomes. States that spend more on children have better child outcomes even after taking into account potential confounding influences. Our results are robust to numerous variations in model specifications and to the inclusion of proxies for unobserved characteristics of states. Our sensitivity analyses suggest that the results we present may be conservative, yet our findings show that public investments in children yield broad short-term returns in the form of improved child outcomes.

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Paper provided by Center for Policy Research, Maxwell School, Syracuse University in its series Center for Policy Research Working Papers with number 53.

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Length: 36 pages
Date of creation: Mar 2003
Date of revision:
Handle: RePEc:max:cprwps:53
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  1. Kristine A. Lykens & Paul A. Jargowsky, 2002. "Medicaid matters: children's health and medicaid eligibility expansions," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(2), pages 219-238.
  2. Currie, Janet & Gruber, Jonathan, 1996. "Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1263-96, December.
  3. Krueger, Alan B & Whitmore, Diane M, 2001. "The Effect of Attending a Small Class in the Early Grades on College-Test Taking and Middle School Test Results: Evidence from Project STAR," Economic Journal, Royal Economic Society, vol. 111(468), pages 1-28, January.
  4. John S. Akin & Irwin Garfinkel, 1977. "School Expenditures and the Economic Returns to Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 12(4), pages 460-481.
  5. David Card & Alan Krueger, 1990. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," NBER Working Papers 3358, National Bureau of Economic Research, Inc.
  6. Rebecca M. Blank & Maria J. Hanratty, 1993. "Responding to Need: A Comparison of Social Safety Nets in Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 191-232 National Bureau of Economic Research, Inc.
  7. Eric A. Hanushek, 2001. "Black-White Achievement Differences and Governmental Interventions," American Economic Review, American Economic Association, vol. 91(2), pages 24-28, May.
  8. Caroline M. Hoxby, 2002. "School Choice and School Productivity (or Could School Choice be a Tide that Lifts All Boats?)," NBER Working Papers 8873, National Bureau of Economic Research, Inc.
  9. Eric A. Hanushek & Javier A. Luque, 2002. "Efficiency and Equity in Schools around the World," NBER Working Papers 8949, National Bureau of Economic Research, Inc.
  10. Phipps, S., 1999. "The Well-Being of Young Canadian Children in International Perspective," Department of Economics at Dalhousie University working papers archive 99-01, Dalhousie, Department of Economics.
  11. Markus Jantti & Bruce Bradbury, 1999. "Child Poverty across Industrialized Nations," Papers iopeps99/70, Innocenti Occasional Papers, Economic Policy Series.
  12. Eric A. Hanushek & Julie A. Somers, 1999. "Schooling, Inequality, and the Impact of Government," NBER Working Papers 7450, National Bureau of Economic Research, Inc.
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