Quarterly Journal of Economics Vol. 116 No. 4 2001
All School Finance Equalizations are Not Created Equal
Abstract
School finance equalization has probably affected American schools more than any other reform of the last 30 years. Understanding it is a prerequisite for making optimal social investments in human capital. Yet, it is poorly understood. In this paper I explain why: it differs from conventional redistribution because it is based on property values, which are endogenous to schools' productivity, taste for education, and the school finance system itself. I characterize equalization schemes and show why some "level down" and others "level up." Schemes that strongly level down have unintended consequences: even poor districts can end up worse off. I also show how school finance equalization affects property prices, private school attendance, and student achievement.
- DOI
- 10.1162/003355301753265552
- Volume
- 116
- Issue
- 4
- Pages
- 1189-1231
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref