Note: I would like to sincerely thank the Levy Economics Institute of Bard College for their generous support while I was conducting the research included in this article. A special thank you is extended to Ajit Zacharias for numerous comments and discussions throughout the process.
Inequity in American Schools: A New Perspective on the Distributional Effects of School Expenditures on Economic Well-Being
Version of Record online: 6 AUG 2013
© 2013 International Association for Research in Income and Wealth
Review of Income and Wealth
Volume 59, Issue 4, pages 728–755, December 2013
How to Cite
Mahoney, M. H. (2013), Inequity in American Schools: A New Perspective on the Distributional Effects of School Expenditures on Economic Well-Being. Review of Income and Wealth, 59: 728–755. doi: 10.1111/roiw.12055
- Issue online: 4 NOV 2013
- Version of Record online: 6 AUG 2013
- education expenditures;
- education finance;
- redistributive effects
This article explores how inequities in public K-12 school spending impact the distribution of economic well-being across American households with public school students in 1989 and 2000. Adapting concepts from the public finance literature, I explore the impact of school spending on the vertical and horizontal equity and its impact relative to other types of public spending on social programs and taxation. Conventionally, vertical equity refers to the size of the income gaps between households. Horizontal equity refers to the ranking of households along the income distribution with any change in ranks producing horizontal inequity. My main findings show that school spending, when converted into a component of income, served to reduce extended-income inequality through improvements in vertical equity without the discriminatory implications of exacerbating horizontal inequity across households. Additionally, this impact was at least as large as that of spending on other social programs. This finding bolsters standard arguments for equity and progressivity of school finance across students.