Does Public School Spending Raise Intergenerational Mobility?: Evidence from U.S. School Finance Reforms
It is generally believed that equality of opportunity can be achieved through high qual-ity public schools. This paper examines the causal e˙ect of public school spending on intergenerational mobility by exploiting U.S. court-mandated school finance reforms. I utilize college attendance rate and intergenerational income mobility that Chetty et al. (2014) construct based on administrative tax records. Event study and instru-mental variable models show that students are more likely to attend college due to additional resources in public schools. Reform-induced spending increases also improve intergenerational mobility of advantaged children, but have little impact on mobility of disadvantaged children. In fact, the gap in the mean income rank between advan-tage and disadvantage children widens. The heterogeneity by county characteristics suggests that the school spending e˙ect may be mitigated by negative environments in high poverty area.
|Date of creation:||May 2017|
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