School Finance Equalization Increases Intergenerational Mobility: Evidence from a Simulated-Instruments Approach / Barbara Biasi.

Format:

Book

Author/Creator:

Biasi, Barbara.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25600.

NBER working paper series no. w25600

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

School Finance Equalization Increases Intergenerational Mobility

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

This paper estimates the causal effect of equalizing revenues across public school districts on students' intergenerational mobility. I exploit differences in exposure to equalization across seven cohorts of students in 20 US states, generated by 13 state-level school finance reforms passed between 1980 and 2004. Since these reforms create incentives for households to sort across districts and this sorting affects property values, post-reform revenues are endogenous to an extent that varies across states. I address this issue with a simulated instruments approach, which uses newly collected data on states' funding formulas to simulate revenues in the absence of sorting. I find that equalization has a large effect on mobility of low-income students, with no significant changes for high-income students. Reductions in the gaps in inputs (such as the number of teachers) and in college attendance between low-income and high-income districts are likely channels behind this effect.

Notes:

Print version record

February 2019.