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Saving the American Dream ? Education Policies in Spatial General Equilibrium

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  • Eckert,Fabian
  • Kleineberg,Tatjana Karina

Abstract

Children's education and economic opportunities differ substantially across US neighborhoods. This paper develops and estimates a spatial equilibrium model that links children's education outcomes to their childhood location. Two endogenous factors determine education choices in each location: local education quality and local labor market access. This paper estimates the model with US county-level data and studies the effects of a school funding equalization on education outcomes and social mobility. The reform's direct effects improve education outcomes among children from low-skill families. However, the effects are weaker in spatial general equilibrium because average returns to education decline and residential and educational choices of low-skill families shift them toward locations with lower education quality.

Suggested Citation

  • Eckert,Fabian & Kleineberg,Tatjana Karina, 2021. "Saving the American Dream ? Education Policies in Spatial General Equilibrium," Policy Research Working Paper Series 9574, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9574
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    Cited by:

    1. Stephen J. Redding, 2022. "Suburbanization in the USA, 1970–2010," Economica, London School of Economics and Political Science, vol. 89(S1), pages 110-136, June.
    2. Luke Heath Milsom, 2023. "Moving OpportunityLocal Connectivity and Spatial Inequality," CEPREMAP Working Papers (Docweb) 2303, CEPREMAP.
    3. Redding, Stephen, 2021. "Suburbanization in the United States 1970-2010," LSE Research Online Documents on Economics 114437, London School of Economics and Political Science, LSE Library.
    4. Francesco Agostinelli & Margaux Luflade & Paolo Martellini, 2021. "On the Spatial Determinants of Educational Access," Working Papers 2021-042, Human Capital and Economic Opportunity Working Group.

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    More about this item

    Keywords

    Educational Sciences; Rural Labor Markets; Labor Markets; Education for Development (superceded); Education For All; Educational Populations; Economics of Education; Urban Housing; Urban Housing and Land Settlements; Urban Governance and Management; Municipal Management and Reform;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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