Pennies from Heaven? Using Exogeneous Tax Variation to Identify Effects of School Resources on Pupil Achievements

Torbjørn Hægeland, Oddbjørn Raaum and Kjell G Salvanes

No 3561, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Despite important policy implications associated with the allocation of education resources, evidence on the effectiveness of school inputs remains inconclusive. In part, this is due to endogenous allocation; families sort themselves non-randomly into school districts and school districts allocate money based in order to compensate (or reinforce) differences in child abilities, which leaves estimates of school input effects likely to be biased. Using variation in education expenditures induced by the location of natural resources in Norway we examine the effect of school resources on pupil outcomes. We find that higher school expenditures, triggered by higher revenues from local taxes on hydropower plants, have a significantly positive effect on pupil performance at age 16. The positive IV estimates contrast with the standard cross-sectional estimates that reveal no effects of extra resources.

Keywords: school resources; pupil achievement (search for similar items in EconPapers)
JEL-codes: I21 I28 J00 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2008-06
New Economics Papers: this item is included in nep-edu, nep-lab and nep-ure
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Citations: View citations in EconPapers (11)

Published - published in: Economics of Education Review, 2012, 31 (5), 601-614

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Related works:
Journal Article: Pennies from heaven? Using exogenous tax variation to identify effects of school resources on pupil achievement (2012)
Working Paper: Pennies from heaven - Using exogenous tax variation to identify effects of school resources on pupil achievement (2007)
Working Paper: Pennies from heaven. Using exogenous tax variation to identify effects of school resources on pupil achievement (2007)
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