Educational policy and intergenerational mobility

Tomoaki Kotera, Ananth Seshadri

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)187-207
Number of pages21
JournalReview of Economic Dynamics
Volume25
DOIs
Publication statusPublished - 2017 Apr

Keywords

  • Educational policy
  • Human capital
  • Intergenerational mobility

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Educational policy and intergenerational mobility'. Together they form a unique fingerprint.

Cite this