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Revealing Failures in the History of School Finance

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  • Peter H. Lindert

Abstract

This essay proposes a set of non-econometric tests using data on wage structure, school resource costs, public expenditures, taxes, and rates of return to explain anomalies in which richer political units deliver less education than poorer ones. Both the anomalies of education history, and its less surprising contrasts, fit broad patterns that can be revealed and partially explained using low-tech methods. Over most of human history, contrasts in the output of education were driven mainly by contrasts in the supply of tax support for mass education. Exogenous influences on the demand for, and the private supply of, education played only lesser roles. Pro-growth public education could have emerged a century or two earlier than it did, had the leading countries of Western Europe mustered the political will to fund it. Government underinvestment in mass education is demonstrated for England and Wales between 1717 and 1891. Differences in political support still account for most of today's education anomalies where the contrasts involve less developed regions. In today's highest-income settings, however, differences in tax funding lose their previous explanatory power. The postwar shift away from strong effects of school resources calls for a renewed introduction of historical context into the "does money matter" debate.

Suggested Citation

  • Peter H. Lindert, 2009. "Revealing Failures in the History of School Finance," NBER Working Papers 15491, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15491
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    Cited by:

    1. Crafts, Nicholas, 2011. "Explaining the first Industrial Revolution: two views," European Review of Economic History, Cambridge University Press, vol. 15(01), pages 153-168, April.
    2. Peter H. Lindert, 2008. "Kenneth Sokoloff on Inequality in the Americas," NBER Chapters,in: Understanding Long-Run Economic Growth: Geography, Institutions, and the Knowledge Economy, pages 363-372 National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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