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Education-Finance Reform and the Distribution of Education Resources

Sheila E. Murray, William N. Evans and Robert M. Schwab
The American Economic Review
Vol. 88, No. 4 (Sep., 1998), pp. 789-812
Stable URL: http://www.jstor.org/stable/117006
Page Count: 24
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Education-Finance Reform and the Distribution of Education Resources
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Abstract

Between 1971 and 1996 opponents of local funding for public schools successfully challenged the constitutionality of school-finance systems in 16 states. Using the variation across states in the timing of these cases we investigate the impact of reform on the distribution of school resources. Our results suggest that court-ordered finance reform reduced within-state inequality in spending by 19 to 34 percent. Successful litigation reduced inequality by raising spending in the poorest districts while leaving spending in the richest districts unchanged, thereby increasing aggregate spending on education. Reform led states to fund additional spending through higher state taxes.

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