TY - JOUR
T1 - Educational policy and intergenerational mobility
AU - Kotera, Tomoaki
AU - Seshadri, Ananth
N1 - Publisher Copyright:
© 2017 Elsevier Inc.
PY - 2017/4
Y1 - 2017/4
N2 - In the United States, there is considerable variation in intergenerational mobility across states. We argue that the distribution of public school spending across school districts under public school finance systems affects intergenerational mobility within the United States. We build a dynamic model in which school districts vote over public school spending per pupil taking the finance system as given. We embed this model with median voting at the district level within a fairly standard model of human capital accumulation. Our model can replicate the relationship between the distribution of public school spending and intergenerational mobility observed in data. Furthermore, three counterfactual simulations suggest that i) the correlation between parental human capital and a child's learning ability plays a significant role in explaining the cross-state variation in intergenerational mobility, ii) a more equal distribution of public school spending under a foundation program by relaxing a borrowing constraint improves intergenerational mobility, especially when a child's learning ability is not highly dependent on parental human capital, and iii) switching to a full state funding program improves intergenerational mobility, but not enormously. This is because full state funding limits public school spending, which hinders intergenerational mobility.
AB - In the United States, there is considerable variation in intergenerational mobility across states. We argue that the distribution of public school spending across school districts under public school finance systems affects intergenerational mobility within the United States. We build a dynamic model in which school districts vote over public school spending per pupil taking the finance system as given. We embed this model with median voting at the district level within a fairly standard model of human capital accumulation. Our model can replicate the relationship between the distribution of public school spending and intergenerational mobility observed in data. Furthermore, three counterfactual simulations suggest that i) the correlation between parental human capital and a child's learning ability plays a significant role in explaining the cross-state variation in intergenerational mobility, ii) a more equal distribution of public school spending under a foundation program by relaxing a borrowing constraint improves intergenerational mobility, especially when a child's learning ability is not highly dependent on parental human capital, and iii) switching to a full state funding program improves intergenerational mobility, but not enormously. This is because full state funding limits public school spending, which hinders intergenerational mobility.
KW - Educational policy
KW - Human capital
KW - Intergenerational mobility
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U2 - 10.1016/j.red.2017.02.005
DO - 10.1016/j.red.2017.02.005
M3 - Article
AN - SCOPUS:85015265505
SN - 1094-2025
VL - 25
SP - 187
EP - 207
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
ER -