Block Grants and Education Expenditure

Ergete Ferede () and Shahidul Islam

Public Finance Review, 2016, vol. 44, issue 5, 635-659

Abstract: This article investigates the effects of block grants on education expenditures using panel data from Canadian provinces over the period 1982 to 2008. Our main empirical identification strategy relies on the use of the allocation formula for equalization grant—a component of the Canadian federal block grant. The results indicate that block grants have stimulative effects on provincial education expenditure. Our results suggest that a one dollar increase in per capita federal grants is associated with an increase in per capita education expenditure of about Can$0.21, which is roughly proportional to the share of education in total provincial spending. The results are robust to various sensitivity checks.

Keywords: block grants; flypaper effect; education expenditures; federalism (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/1091142115602064 (text/html)

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:sae:pubfin:v:44:y:2016:i:5:p:635-659

DOI: 10.1177/1091142115602064

Access Statistics for this article

More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().