Abstract
The American system of government-financed education is decentralized among 50 states and more than 15,000 local school districts. Local funds are derived from local property taxes, and this system tends to make local spending unequal. State- government efforts to equalize education spending involve manipulating the local ‘tax price’ with matching grants. School districts with low tax prices are not, however, necessarily populated by rich people, so the distribution of state funds may penalize many low-income districts with large amounts of non-residential property.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Benabou, R. 1996. Heterogeneity, stratification, and growth: Macroeconomic implications of community structure and school finance. American Economic Review 86: 584–609.
Bergstrom, T.C., and R.P. Goodman. 1973. Private demand for public goods. American Economic Review 63: 280–296.
Bergstrom, T.C., D.L. Rubinfeld, and P. Shapiro. 1982. Micro-based estimates of demand functions for local school expenditures. Econometrica 50: 1183–1205.
Bradbury, K.L., K.E. Case, and C. Mayer. 2001. Property tax limits, local fiscal behavior, and property values: Evidence from Massachusetts under proposition 2 1/2. Journal of Public Economics 80: 287–311.
Brunner, E.J., and J. Sonstelie. 2006. California’s school finance reform: An experiment in fiscal federalism. In The Tiebout model at fifty, ed. W.A. Fischel. Cambridge, MA: Lincoln Institute of Land Policy.
Fischel, W.A. 2006a. Will I see you in September? An economic explanation for the standard school calendar. Journal of Urban Economics 59: 236–251.
Fischel, W.A. 2006b. Why voters veto vouchers: Public schools and community- specific social capital. Economics of Governance 7: 109–132.
Hoxby, C.M. 1999. The productivity of schools and other local public goods producers. Journal of Public Economics 74: 1–30.
Hoxby, C.M. 2000. Does competition among public schools benefit students and taxpayers? American Economic Review 90: 1209–1238.
Oates, W.E. 1969. The effects of property taxes and local public spending on property values: An empirical study of tax capitalization and the Tiebout hypothesis. Journal of Political Economy 77: 957–971.
Tiebout, C.M. 1956. A pure theory of local expenditures. Journal of Political Economy 64: 416–424.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Fischel, W.A. (2018). Educational Finance. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2684
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2684
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences