Increase In Education Spending Research Articles

The Determinants of Early Investments in Urban School Systems in the United States

Abstract Growth in per pupil education spending in the United States was mostly flat until 1918, after which it increased by almost 100 percent in a brief six-year period. This is the fastest documented increase in per pupil education spending in U.S. history. Using newly digitized biennial data on 386 of the largest urban school systems in the United States from 1900 to 1930, I investigate the origins of this spending increase. I first document that there was significant expansion in all spending and revenue categories with particularly large increases in capital expenditures, which were likely financed through borrowing. My results suggest that state education policies were largely ineffective in increasing school resources, as laws increasing state aid to local districts crowded out local receipts while compulsory schooling and English-only laws were not accompanied by increases in receipts or expenditures per pupil. Rather, I find that substantial increases in educational spending per pupil were linked to women's suffrage. Providing women with the right to vote can explain about 20 percent of the increase in per pupil spending.

The role of industrialisation in education expenditure: municipal budgets in Biscay, 1860-1910

AbstractThis paper presents a unique database that explores how industrialisation affected municipalities' incomes, expenditures and education spending. Using the importance of the mines and steelworks in Biscay in northern Spain between 1860 and 1910 as indicators of industrialisation, the findings show that there was a positive relationship between these dimensions and towns' incomes, which was indirectly transmitted to municipalities' expenditures, showing that municipalities were able to benefit from industrialisation. However, the thriving mining and metallurgy sectors did not support an increase in education spending. The lack of short-term results from spending on education may have led town councils to divert the revenues of industrialisation into more urgent areas, or those that could deliver faster results.

Gender equality, economic growth, and poverty in Côte d’Ivoire: A quantitative analysis

In this paper, we develop a three-period gender-based Overlapping Generations (OLG) model of economic growth for Côte d’Ivoire in which life expectancy is endogenized and the rate of change of the poverty rate is linked to the growth rate of output per capita. We then calibrate the model using the country-specific calibration data to illustrate the role of public policies in the model, and its implications for long-term growth, gender equality, and poverty in Côte d’Ivoire. To this end, we discuss three sets of quantitative experiments: broad-based development policies (increase in education spending and infrastructure investment, and governance reform), gender-based policies (reduction in gender bias in the market place, increase in women’s bargaining power, and reduction in family bias against girls’ education), and a composite reform program (combination of pro-growth, pro-gender policies). Overall, our findings suggest that Côte d’Ivoire could achieve better growth and poverty outcomes if the country could implement a composite reform program that includes comprehensive development and gender-based policies.

Local education expenditures and educational inequality in China

AbstractWe investigate the relationship between education funding and educational inequality across Chinese prefectures. The decentralisation of education in China has created substantial variations in government educational expenditures, both over time and across regions. We propose that these variations relate to the budget preferences of local governors. These are age dependent with younger officials more inclined to invest in large and quantifiable infrastructure projects rather than public service provision. This provides a source of exogenous variation in local fiscal efforts to provide public education and thus permits quasi‐experimental evaluation through instrumental variable identification. Our results suggest that increased education spending is linked with lower educational inequality. Moreover, we find strong evidence of heterogeneity ‐ the magnitude of the effect is diminishing with the degree of local fiscal autonomy.

Assessment of the environmental effects of China's fertility policy: The impact from increasing numbers of children in households

In the dual context of the pursuit of carbon neutrality and the continued relaxation of the fertility policy in China, this study uses a panel data of the China Family Panel Studies (CFPS) from 2012 to 2018 to reveal the environmental performance brought about by the relaxation of the fertility policy. The article finds that an increase in the proportion of children in the household is accompanied by a decrease in the embodied carbon emissions (E-CO2) of the household, indicating the relaxation of the fertility policy is synergistic with the realization of the carbon neutrality. Furthermore, in terms of the influential mechanism, This paper confirms that the inhibitory effect of the rising proportion of children on E-CO2 is due to the constraint of lower household income. On the one hand, lower income expectations from raising more children make households consume less, which reduces household E-CO2. On the other hand, the negative effect of lower income on consumption is unevenly distributed to each category of consumption. Specifically, parents spend more on their children, such as increasing spending on education. However, the increase in education spending comes at the cost of a reduction in other aspects of consumption, which brings a more environmental-friendly consumption pattern. In addition, we find that having more children has a stronger effect on E-CO2 reductions for families in rural areas, families with only daughters and no sons and families with low-income. Therefore, it is necessary to focus on families in urban areas and with high-income to realize household E-CO2 reduction, thereby achieving carbon neutrality under the trend of larger families (more children). Specifically, the government should actively guide families to reduce non-essential and high‑carbon consumption and promote an environmentally friendly consumption structure.

Education and Crime across America: Inequity’s Cost

Much of current research on crime and education has focused on the effect of minimum dropout age on rates of crime. Combining the FBI’s uniform crime reporting database and district finance data, we study the longitudinal relationship between crime in every town/city (whose police department has reported crime statistics) and its school district spending in years 2003 to 2018. We combine over 213 datasets to control for population, density, wealth, education, employment, cost-of-living, race, law enforcement, and voting history. Additionally, we also look at teacher salary, teacher engagement, and student chronic absenteeism. Using linear mixed-effect modeling, we find an overall average of 2.35% percent decrease in property crime for every $1000 more a school district spends per pupil on education. Moreover, a $1000 increase in education spending decreased property crime nearly four times as much as a 10 percent increase in per capita income. We also looked at the range in district spending in towns/cities and counties whose students attend multiple districts. We find that for every $1000 difference in district spending within a city, property crime increases by an average of 3%; interestingly, violent crime decreases by 3%. When we lag variables of education quality, allowing these effects to playout, we also find that for every 10 percentage-point increase in chronic absenteeism among students, violent crime increases by 4%. Importantly, we find no such effect for property crime, suggesting a distinct mechanism of education on violent crime. Additionally, both law enforcement and unemployment explain little variance in crime. Our results demonstrate a robust relationship between education funding and reduced crime across America with regard to amount spent per student as well as equity in spending.

Analytical Study of Natural and Agricultural Resources Affecting Educational Spending in Japan

Japan's natural resources are insufficient, especially agricultural lands whose area is not sufficient for the population's need for food, in addition to being a country suffering from natural disasters, and despite this, Japan's economy has reached a global position. Using the estimate of the gradual linear regression equation, it is clear that an increase in mineral resources revenues by one billion dollars leads to an increase in education spending by 1007 million dollars, and it is evident from the increase in the added value of agriculture in Japan by one billion dollars, which leads to an increase in education spending by 1.89 billion dollars. An increase in the total value of agricultural output by one billion dollars leads to a decrease in spending on education by 13 million dollars, while it was found that increasing the agricultural land’s contribution from the land area by 1% leads to a decrease in the agreement on education by 65.4 billion dollars, as it turns out The increase in the number of students in elementary school in Japan by one million pupils leads to an increase in the agreement on education by 400 thousand dollars. It is also clear from the equation that increasing the number of students in technical education in Japan by one million pupils leads to an increase in education spending by 100 thousand dollars, while increasing the number of teachers in secondary education by one million teachers leads to an increase in education spending by one million dollars.

The Economic Impact of Education Spending: Evidence from Self-Employed Households

I examine the consumption and labor decisions of self-employed households when a child goes to college using unique financial transactions data from the linked accounts of small businesses and their owners. Households respond to the increase in education spending by downsizing business production and exiting self-employment. They increase medical and restaurant expenditures and cut back on mortgage payments. While education spending hampers business survival, self-employed parents become wage-earners or enter the gig economy after exiting to meet the financial obligations of sending kids to college.

Schoolhouse Democracy: Public Opinion and Education Spending in the States

Using new estimates of state-level public opinion, I explore the relationship between support for increased education spending and statewide per-pupil expenditures from 1986 to 2013. In the 1980s, there was a modest, positive relationship between public opinion and actual spending: States with greater support for increased education spending tended to have slightly higher per pupil expenditures. Over the next three decades, this relationship reversed. States with relatively low per-pupil expenditures tended to increase their spending at a slower rate despite steady growth in support for more spending. As a result, public opinion and education spending became inversely related. By the end of the time series, states with greater support for increased education spending tended to spend less per pupil. The changing distribution of local, state, and federal sources of education spending partially explains this pattern. As federal education expenditures rose, some states spent proportionally less from state and local sources, resulting in smaller overall spending increases in those states.

How information affects support for education spending: Evidence from survey experiments in Germany and the United States

To study whether current spending levels and public knowledge of them contribute to transatlantic differences in policy preferences, we implement parallel survey experiments in Germany and the United States. In both countries, support for increased education spending and teacher salaries falls when respondents receive information about existing levels. Treatment effects vary by prior knowledge in a manner consistent with information effects rather than priming. Support for salary increases is inversely related to salary levels across American states, suggesting that higher salaries could explain much of Germans' lower support for increases. Information about the tradeoffs between specific spending categories shifts preferences from class-size reduction towards alternative purposes. Additional German experiments indicate that information effects extend to specific reform proposals and to other areas of public spending.

Public‐Sector Unions and the Size of Government

AbstractPublic‐sector unions are generally thought to increase the size of government through collective bargaining. This article challenges this idea for the case of teacher unions in the United States and argues that while collective bargaining institutions sometimes lead to increased education spending, this is not the norm. Using a new longitudinal data set spanning all states before and after they granted collective bargaining rights to teachers, the article shows that although states that mandate districts to bargain with teachers have higher education expenditures than states that do not, the differences precede collective bargaining. Difference‐in‐differences analyses find no evidence that introducing collective bargaining rights led to average increases in the level of resources devoted to education. Although existing theories cannot explain these null findings, the article shows one reason behind them is that most laws granting collective bargaining rights to teachers were not unambiguously prolabor, but included both pro‐ and anti‐union provisions.

When do authoritarian rulers educate: Trade competition and human capital investment in Non-Democracies

This paper explains variations in education spending among non-democracies, focusing on policy interdependence by trade competition. Facing pressures from spending changes in competitor countries, rulers calculate the costs and benefits associated with increased education spending: education increases labor productivity; it also increases civil engagement and chances of democratization. Therefore, we expect that rulers in countries whose revenues depend less on a productive labor force and those with shorter time horizons are less likely to invest because of lower expected benefits; rulers with single-party regimes, authoritarian legislatures, and especially partisan authoritarian legislatures are more likely to invest because such institutions enable them to better survive the threats associated with increased human capital. We find empirical support for policy interdependence and the conditional effects of government revenue source, time horizon, and partisan legislatures.

Randomized controlled trials informing public policy: Lessons from project STAR and class size reduction

Randomized controlled trials (RCTs) and related research strategies are increasingly seen as the preferred methodology for evaluating policy interventions, but a single-minded focus on identifying causal effects limits their capacity to support actual policy decisions. A detailed look at Project STAR illustrates this point and offers some possible correctives. Initiated by the Tennessee legislature to help decide whether to enact state-wide class size reduction (CSR), STAR compared the test scores of students randomly assigned to classes of different size. It addressed a well-formed research question, but focused narrowly on refining a single link in a long chain of evidence necessary to address the policy question at hand: whether CSR would be a good use of a large increase in education spending. It disregarded the limitations of test scores as indicators of education quality and ignored general equilibrium effects on teacher quality and salaries. Moreover, the emphasis it placed on estimating average CSR effects in a given setting diverted attention from the heterogeneity of these effects and the conditions that mediated their impact, limiting its external validity. These observations continue to be relevant for the design of policy-oriented research, and for the academic training of empirical economists.

Are Court Orders Sticky? Evidence on Distributional Impacts from School Finance Litigation

Whether welfare analysis of legal rule changes should evaluate distributional outcomes as well as efficiency depends crucially on how much their distributional impacts stick. That is, do court mandates ultimately affect the distribution of taxes and spending or do legislatures offset the distributional consequences of those court orders with other changes? Little is known about this question. To offer insight into it, I use an event study methodology to show how state revenues and expenditures respond to court orders to increase funding for schools. I find that the court orders' distributional impacts do stick. The education spending is financed by tax increases that do not target the largest beneficiaries of the increased education spending, the poor and those with children. Thus, since the main beneficiaries of the school spending do not pay a disproportionate share of the costs, advocates for school finance reform are effective at transferring resources to poor families. The results suggest that welfare analysis of these legal rules should take into account not only efficiency but also distribution, in a departure from traditional economic analysis of legal rules.

Are Court Orders Sticky? Evidence from School Finance Litigation

Whether welfare analysis of legal rule changes should evaluate distributional outcomes as well as efficiency depends crucially on how much their distributional impacts stick. That is, do court mandates ultimately affect the distribution of taxes and spending or do legislatures offset the distributional consequences of those court orders with other changes? Little is known about this question. To offer insight into it, I use an event study methodology to show how state revenues and expenditures respond to court orders to increase funding for schools. I find that the court orders’ distributional impacts do stick. The education spending is financed by tax increases that do not target the largest beneficiaries of the increased education spending, the poor and those with children. Thus, since the main beneficiaries of the school spending do not pay a disproportionate share of the costs, advocates for school finance reform are effective at transferring resources to poor families. The results suggest that welfare analysis of these legal rules should take into account not only efficiency but also distribution, in a departure from traditional economic analysis of legal rules.

Independence Decrease and Centralization: Analysis of Expenditures of the Consolidated Budget of the Komi Republic

Fiscal policy in a resource-rich and thus exposed to external factors country has to pay special attention to balancing the budget system. To analyze expenditures of the consolidated budget of the Komi Republic some theoretical approaches were applied, namely productive expenditures conception, some balance between current and capital expenditures and requirements of independence and a clear division of authority in multi-level budgetary systems. It is shown that from 2012 there grows the deficit of the republican budget of the Komi Republic while expenditure rate of growth is falling. It is accompanied by the centralization of budget funds and decrease of independence of local budgets. The current expenditures are steadily growing and capital expenditures falling. The rise of productive expenditures is due to increased education spending, but it is unlikely to cause sustainable economic growth because of centralization, descending infrastructure spending and capital expenditures, rise of deficit and debt, decrease of independence.

How Information Affects Support for Education Spending: Evidence from Survey Experiments in Germany and the United States

To study whether current spending levels and public knowledge of them contribute to transatlantic differences in policy preferences, we implement parallel survey experiments in Germany and the United States. In both countries, support for increased education spending and teacher salaries falls when respondents receive information about existing levels. Treatment effects vary by prior knowledge in a manner consistent with information effects rather than priming. Support for salary increases is inversely related to salary levels across American states, suggesting that salary differences could explain much of Germans’ lower support for increases. Information about the tradeoffs between specific spending categories shifts preferences from class-size reduction towards alternative purposes.

How Information Affects Support for Education Spending: Evidence from Survey Experiments in Germany and the United States

To study whether current spending levels and public knowledge of them contribute to transatlantic differences in policy preferences, we implement parallel survey experiments in Germany and the United States. In both countries, support for increased education spending and teacher salaries falls when respondents receive information about existing levels. Treatment effects vary by prior knowledge in a manner consistent with information effects rather than priming. Support for salary increases is inversely related to salary levels across American states, suggesting that salary differences could explain much of Germans' lower support for increases. Information about the tradeoffs between specific spending categories shifts preferences from class-size reduction towards alternative purposes.

Is california broke or is its budgeting system broken? empirical examination of the budget affordability, the institutional arrangements, and the growth of deficits in California

Since the 1978 adoption of Proposition 13 California’s fiscal conditions have steadily deteriorated. This article questions whether this fiscal deterioration is due to a lack of budget affordability or of institutional ineffectiveness. In examining the institutional ineffectiveness of California’s budget system the article focuses on: (1) general revenue mobilization, (2) expenditure mandates in education, and (3) legislative party divisions in face of supermajority requirements. To this end, the article develops a pre-post regression model that analyzes the factors that influenced the state budget balances. The article finds that California’s deteriorating fiscal conditions are strongly influenced by the declining effective tax rate. The study also finds that increases in education spending are a statistically significant factor, but finds mixed support for the argument that political divisions drive California’s budget deficits.

Fiscal Space and Public Spending on Children in Burkina Faso

Despite high growth rates in recent decades, Burkina Faso is still a poor country. The government acknowledges the need for a stronger commitment to reach the Millennium Development Goals (MDGs), particularly regarding the reduction of poverty. At the same time, the Burkinabe budget deficit has grown in recent years in response to various crises which have hit the country. There are strong pressures to rapidly reduce this budget deficit, but there are active concerns about how this will be achieved. The country thus faces difficult choices: how to ensure better living conditions for children, attain the millennium goals and ensure they have a better future in the present budgetary context? To answer this question, three policy interventions were identified: (i) an increase in education spending, (ii) a school fees subsidy and (iii) a cash transfer to households with children under the age of five. The same total amount is injected into the economy in each of the three cases, facilitating comparison between the three scenarios. The discussions also made it possible to identify the three financing mechanisms that appear most realistic: (i) a reduction in subsidies, (ii) an increase in the indirect tax collection rate and (iii) an extension of the timeframe to reduce the public deficit to ten years rather than five. The results indicate that increased public education spending helps raise school participation and pass rates, thus increasing the supply and education level of skilled workers, leading to a reduced incidence and depth of both monetary and caloric poverty. School fees subsidies have more differentiated effects on education: they promote children’s entry into school to a greater degree, but are less effective at inducing them to pursue their studies. Finally, the supply of skilled workers increases slightly, but their average level of education is lower than in the reference scenario. This type of intervention has a beneficial impact on poverty, greater than under increased public education spending. Cash transfers have a limited impact on educational behaviour, and thus on the supply of skilled workers, but substantially reduce the incidence and depth of poverty. The results are qualitatively similar under each financing approach. In sum, if the objective is to achieve improved education and economic performance, the best intervention appears to be to focus on increased public education spending. However, if reducing child poverty is prioritized, it is cash transfers to families that appear more suitable. Regardless of the intervention considered, the most suitable financing mechanism appears to be a temporary increase in the public deficit, because it is accompanied by a smaller negative effect on the quality of life of the most destitute.