The Growth of Local Education Transfers

Ryan Gallagher (), Joseph Persky () and Haydar Kurban ()

Public Finance Review, 2018, vol. 46, issue 6, 1002-1023

Abstract: We argue that previous research studying the relationship between a growing elderly population and local support for public education has overlooked a key component to public education finance: redistribution payments made by older households. A fuller accounting of these payments indicates that a growing elderly population might very well prove to be a boon to local public school students not a burden as has been previously suggested. Beginning with a national sample of suburban school districts, this article shows that a higher elderly to student ratio within a district actually increases per-student revenues, even after accounting for the downward pressure that older households place on tax rates. We then explore a specific channel through which elderly households redistribute resources to school-age children: local property taxes. Focusing on Chicago-area suburban school districts, we show that a rise in a community’s elderly to student ratio actually increases the level of per-student property tax redistribution that occurs.

Keywords: property tax; local redistribution; demographic change; public schools (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:46:y:2018:i:6:p:1002-1023

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