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Public Education Inequality and Intergenerational Mobility

  • Angela Zheng
  • James Graham
American Economic Journal: Macroeconomics
vol. 14, no. 3, July 2022
(pp. 250-82)
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Abstract

Public school funding depends heavily on local property tax revenue. Consequently, low-income households have limited access to quality education in neighborhoods with high house prices. In a dynamic life-cycle model with neighborhood choice and endogenous local school quality, we show that this property tax funding mechanism reduces intergenerational mobility and accounts for the spatial correlation between house prices and mobility. A housing voucher experiment improves access to schools, with benefits that can last for multiple generations. Additionally, a policy that redistributes property tax revenues equally across schools improves mobility and welfare. However, the benefits can take generations to be realized.

Citation

Zheng, Angela, and James Graham. 2022. "Public Education Inequality and Intergenerational Mobility." American Economic Journal: Macroeconomics, 14 (3): 250-82. DOI: 10.1257/mac.20180466

Additional Materials

JEL Classification

  • H71 State and Local Taxation, Subsidies, and Revenue
  • H75 State and Local Government: Health; Education; Welfare; Public Pensions
  • I21 Analysis of Education
  • I22 Educational Finance; Financial Aid
  • J62 Job, Occupational, and Intergenerational Mobility; Promotion
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
  • R31 Housing Supply and Markets
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