Effect of constraints on Tiebout competition: evidence from a school finance reform

Rajashri Chakrabarti and Joydeep Roy

Regional Studies, 2017, vol. 51, issue 5, 765-785

Abstract: Effect of constraints on Tiebout competition: evidence from a school finance reform. Regional Studies. Michigan's school finance reform significantly increased state aid to low-spending districts and placed restraints on the growth of spending in high-spending districts. It is noteworthy that there is no literature yet on the impact of such reforms on resource allocation by school districts. This study begins to fill this gap. It finds that the reform led the high-spending districts to allocate a lower share of their total expenditure to support services and a higher share to instruction (relative to the low-spending districts). To the extent that instructional expenditures are more productive and contribute to student achievement more than support services expenditures, these results suggest that the reform led to a relative increase in productivity in the high-spending districts.

Date: 2017
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DOI: 10.1080/00343404.2016.1142666

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