Effect of a School Finance Reform on Housing Stock and Residential Segregation: Evidence from Proposal A in Michigan

Joydeep Roy (jr3137@columbia.edu)

Public Economics from University Library of Munich, Germany

Abstract: Local financing of public schools in the U.S. leads to a bundling of two distinct choices - residential choice and school choice - and increases the degree of socioeconomic segregation across school districts. A school finance reform can go a long way in weakening this link. In this paper I study the Michigan school finance reform of 1994 (Proposal A) which resulted in a comprehensive equalization of per pupil expenditures. Using panel data on Michigan K-12 districts and data from the decennial censuses I investigate whether the reform had any significant effects on spatial segregation. I find that Proposal A has been responsible for increases in housing stock and property values in the lowest spending school districts, and for improvements in several socioeconomic indicators, implying a decline is neighborhood sorting. However, there is continued high demand for residence in the highest spending communities, which points to the importance of neighborhood peer effects (‘local’ social capital).

Keywords: School finance reform; spatial segregation; Tiebout sorting; peer effects. (search for similar items in EconPapers)
JEL-codes: I2 R2 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2004-12-05
New Economics Papers: this item is included in nep-edu, nep-geo and nep-ure
Note: Type of Document - pdf; pages: 44
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0412/0412004.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwppe:0412004

Access Statistics for this paper

More papers in Public Economics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA (volker.schallehn@ub.uni-muenchen.de this e-mail address is bad, please contact repec@repec.org).