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School Finance Equalization Increases Intergenerational Mobility

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  • Barbara Biasi
Abstract
This paper estimates the causal effect of equalizing revenues across school districts on students’ intergenerational mobility. I exploit cohort differences in exposure to equalization generated by state-level reforms. To address the endogeneity of postreform revenues due to household sorting after a reform, I use a simulated-instruments approach that uses newly collected data on states’ funding formulas to simulate revenues without sorting. I find that equalization has a large effect on the mobility of low-income students. Reductions in input gaps between low-income and high-income districts are likely channels behind this effect.

Suggested Citation

  • Barbara Biasi, 2023. "School Finance Equalization Increases Intergenerational Mobility," Journal of Labor Economics, University of Chicago Press, vol. 41(1), pages 1-38.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/718980
    DOI: 10.1086/718980
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    Cited by:

    1. Diogo G. C. Britto & Alexandre Fonseca & Paolo Pinotti & Breno Sampaio & Lucas Warwar, 2022. "Intergenerational Mobility in the Land of Inequality," CESifo Working Paper Series 10004, CESifo.
    2. Erdal Asker & Eric J. Brunner & Stephen L. Ross, 2022. "The Impact of School Spending on Civic Engagement: Evidence from School Finance Reforms," Working papers 2022-16, University of Connecticut, Department of Economics.
    3. Josh B. McGee, 2023. "Yes, money matters, but the details can make all the difference," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(4), pages 1125-1132, September.
    4. Biasi, Barbara & Lafortune, Julien & Schönholzer, David, 2024. "What Works and For Whom? Effectiveness and Efficiency of School Capital Investments Across The U.S," CEPR Discussion Papers 18745, C.E.P.R. Discussion Papers.
    5. Paolo Pinotti & Diogo G. C. Britto & Alexandre Fonseca & Breno Sampaio & Lucas Warwar, 2022. "Intergenerational Mobility in the Land of Inequality," CReAM Discussion Paper Series 2322, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    6. Erdal Asker & Eric Brunner & Stephen L. Ross, 2022. "The Impact of School Spending on Civic Engagement: Evidence from School Finance Reforms," Working Papers 2022-041, Human Capital and Economic Opportunity Working Group.
    7. Mookerjee, Sulagna & Slichter, David, 2023. "Test scores, schools, and the geography of economic opportunity," Journal of Urban Economics, Elsevier, vol. 137(C).
    8. Ryan Bacic & Angela Zheng, 2024. "Race and the Income‐Achievement Gap," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 5-23, January.
    9. Austin, Wes & Figlio, David & Goldhaber, Dan & Hanushek, Eric A. & Kilbride, Tara & Koedel, Cory & Sean Lee, Jaeseok & Lou, Jin & Özek, Umut & Parsons, Eric & Rivkin, Steven G. & Sass, Tim R. & Strunk, 2023. "Academic mobility in U.S. public schools: Evidence from nearly 3 million students," Journal of Public Economics, Elsevier, vol. 228(C).

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