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Inequality and Education Funding Theory and Evidence from the U.S. School Districts

Author

Listed:
  • Calin Arcalean

    (ESADE Ramon Llull University)

  • Ioana Schiopu

    (ESADE Ramon Llull University)

Abstract

We investigate the relationship between inequality and education funding in a model of probabilistic voting over public education spending where the private option is available. A change in inequality can have opposite effects at different income levels: higher inequality decreases public spending per student and increases enrollment in public schools in poor economies, while the opposite holds in the rich ones. A change in the tax base can also have non-monotonic effects. We also study the implications of different voting participation across income groups. The predictions of the model are supported by U.S. school district-level data.

Suggested Citation

  • Calin Arcalean & Ioana Schiopu, 2010. "Inequality and Education Funding Theory and Evidence from the U.S. School Districts," CAEPR Working Papers 2010-009, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
    • Handle: RePEc:inu:caeprp:2010009
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    File URL: https://caepr.indiana.edu/RePEc/inu/caeprp/caepr2010-009.pdf
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    References listed on IDEAS

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    Cited by:

    1. Paololo Melindi Ghidi, 2012. "Income Inequality, School Choice and the Endogenous Gentrification of US Cities," LIDAM Discussion Papers IRES 2012006, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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