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Does the United States Spend Enough on Public Schools?

Author

Listed:
  • Patrick J. Bayer

    (Duke)

  • Peter Q. Blair

    (Harvard)

  • Kenneth Whaley

    (South Florida)

Abstract

The United States ranks low among peer countries on the ratio of teacher spending to per capita GDP. Is this (in)efficient? Using a spatial equilibrium model we show that spending on schools is efficient if an increase in school spending funded through local taxes would leave house prices unchanged. By exploiting plausibly exogenous shocks to both school spending and taxes, paired with 25 years of national data on local house prices, we find that an exogenous tax-funded increase in school spending would significantly raise house prices. These findings provide causal evidence that teacher spending in the U.S. is inefficiently low.

Suggested Citation

  • Patrick J. Bayer & Peter Q. Blair & Kenneth Whaley, 2024. "Does the United States Spend Enough on Public Schools?," Working Papers 2024-01, University of South Florida, Department of Economics.
    • Handle: RePEc:usf:wpaper:2024-01
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    References listed on IDEAS

    as
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    Cited by:

    1. Dirk Krueger & Alexander Ludwig & Irina Popova, 2024. "Shaping Inequality and Intergenerational Persistence of Poverty: Free College or Better Schools," NBER Working Papers 32467, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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