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Report
Effect of constraints on Tiebout competition: evidence from a school finance reform in the United States
In 1994, Michigan enacted a comprehensive school finance reform that not only significantly increased state aid to low-spending districts, but also placed restraints on the growth of spending in high-spending districts. While a rich literature studies the impact of school finance reforms on resource equalization, test scores, and residential sorting, there is no literature yet on the impact of such reforms on resource allocation by school districts. This study begins to fill this gap. The Michigan reform affords us a unique opportunity to study the impacts of such reforms on resource ...
Report
Getting ahead by spending more? Local community response to state merit aid programs
In more than half of U.S. states over the past two decades, the implementation of merit aid programs has dramatically reduced net tuition expenses for college-bound students who attend in-state colleges. Although the intention of these programs was to improve access to enrollment for high-achieving students, it is possible that they had unanticipated effects. We analyze whether state funding for higher education and K-12 education changed as a result of program implementation, and whether local school districts attempt to counter any such changes. We employ two methodologies to study whether ...
Discussion Paper
Are Charter Schools Draining Private School Enrollment?
Charter schools are a major policy initiative at the national and local levels. As charter schools spread, one key question is whether they reduce private school enrollment, especially at Catholic schools. If so, an increase in charters could change public school spending patterns, decrease the number or size of private schools, and alter educational outcomes and school quality for public and private school students. But is this really the case? Maybe not. In this post, based on our 2010 New York Fed staff report, we find that despite widespread fears to the contrary, the expansion of charter ...
Report
Effect of redrawing of political boundaries on voting patterns: evidence from state reorganization in India
This paper analyzes the effect of a redrawing of political boundaries on voting patterns and investigates whether it leads to closer conformity of an electorate's voting patterns with its political preferences. We study these issues in the context of a reorganization of states in India. In 2000, Madhya Pradesh, the biggest state in India before the reorganization, was subdivided into Madhya Pradesh and Chhattisgarh, the latter accounting for less than one-fourth of the electorate of undivided Madhya Pradesh. Using socioeconomic composition and traditional voting patterns, we argue that there ...
Report
Did cuts in state aid during the Great Recession lead to changes in local property taxes?
During the Great Recession and its aftermath, state and local governments? revenue streams dried up due to diminished taxes. Budget cuts affected many aspects of government; in this paper, we investigate whether (and how) local school districts modified their funding and taxing decisions in response to changes in state aid in the post-recession period. Using detailed district-level panel data from New York and a fixed effects as well as an instrumental variables strategy, we find strong evidence that school districts did indeed respond to state aid cuts in the post-recession period by ...
Report
Housing markets and residential segregation: impacts of the Michigan school finance reform on inter- and intra-district sorting
Local financing of public schools in the United States leads to a bundling of two distinct choices ? residential choice and school choice ? and has been argued to increase the degree of socioeconomic segregation across school districts. A school finance reform, aimed at equalization of school finances, can in principle weaken this link between housing choice and choice of schools. In this paper, we study the impacts of the Michigan school finance reform of 1994 (Proposal A) on spatial segregation. The reform was a state initiative intended to equalize per-pupil expenditures between Michigan ...
Report
Merit Aid, Student Mobility, and the Role of College Selectivity
In this paper, we investigate the role of college selectivity in college choice decisions (both in-state and out-of-state) of freshmen students following Georgia's HOPE scholarship program. How did HOPE affect the selectivity of colleges attended by Georgia's freshmen students? Did it induce Georgia's freshmen students who would have otherwise attended more selective out-of-state colleges to instead attend less selective in-state ones? Or was there movement to more selective ones, both in-state and out-of-state? Using student residency and enrollment data from IPEDS and selectivity data from ...
Report
Do charter schools crowd out private school enrollment? Evidence from Michigan
Charter schools have been one of the most important dimensions of recent school reform measures in the United States. Currently, there are more than 4,500 charter schools spread across forty U.S. states and the District of Columbia. Though there have been numerous studies on the effects of charter schools, these have mostly been confined to analyzing the effects on student achievement, student demographic composition, parental satisfaction, and the competitive effects on regular public schools. This study departs from the existing literature by investigating the effect of charter schools on ...