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Educational Policy and Intergenerational Policy

Author

Listed:
  • Tomoaki Kotera

    (University of Wisconsin, Madison)

  • Ananth Seshadri

    (University of Wisconsin, Madison)

Abstract
In the United States, there is considerable variation in intergenerational mobility across states. We argue that educational policy and the distribution of public school spending across school districts is important to understand intergenerational mobility within the United States. We build a dynamic model in which districts vote over spending per pupil and school finance systems determine spending. We embed this model with median voting at the district level with a fairly standard Ben Porath model of human capital accumulation later in life. Our model can replicate the correlation between average public school spending per pupil and intergenerational mobility. Counterfactual simulations suggest that i) the distribution of public school spending across school districts plays an important role in explaining the correlation between average public school spending per pupil and rank-rank slope and ii) switching to full state funding in every state improves intergenerational mobility significantly and the negative relationship between intergenerational mobility and public school spending no longer exists. We conclude that educational policy is an important factor in explaining intergenerational mobility. (Copyright: Elsevier)

Suggested Citation

  • Tomoaki Kotera & Ananth Seshadri, 2017. "Educational Policy and Intergenerational Policy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 25, pages 187-207, April.
    • Handle: RePEc:red:issued:16-94
    DOI: 10.1016/j.red.2017.02.005
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    3. Nicola Fuchs-Schünde & Dirk Krueger & Alexander Ludwig & Irina Popova, 2022. "The Long-Term Distributional and Welfare Effects of Covid-19 School Closures," The Economic Journal, Royal Economic Society, vol. 132(645), pages 1647-1683.
    4. You, Jing & Ding, Xinxin & Niño-Zarazúa, Miguel & Wang, Sangui, 2021. "The intergenerational impact of house prices on education: evidence from China," Journal of Housing Economics, Elsevier, vol. 54(C).
    5. Youngsoo Jang & Minchul Yum, 2024. "Aggregate and Intergenerational Implications of School Closures: A Quantitative Assessment," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(3), pages 90-130, July.
    6. Huang, Xiao & Huang, Shoujun & Shui, Ailun, 2021. "Government spending and intergenerational income mobility: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 387-414.

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