Saving the American Dream ? Education Policies in Spatial General Equilibrium

Fabian Eckert and Tatjana Karina Kleineberg

No 9574, Policy Research Working Paper Series from The World Bank

Abstract: Children's education and economic opportunities differ substantially across US neighborhoods. This paper develops and estimates a spatial equilibrium model that links children's education outcomes to their childhood location. Two endogenous factors determine education choices in each location: local education quality and local labor market access. This paper estimates the model with US county-level data and studies the effects of a school funding equalization on education outcomes and social mobility. The reform's direct effects improve education outcomes among children from low-skill families. However, the effects are weaker in spatial general equilibrium because average returns to education decline and residential and educational choices of low-skill families shift them toward locations with lower education quality.

Keywords: Educational Sciences; Rural Labor Markets; Labor Markets; Education for Development (superceded); Education For All; Educational Populations; Economics of Education; Urban Housing; Urban Housing and Land Settlements; Urban Governance and Management; Municipal Management and Reform (search for similar items in EconPapers)
Date: 2021-03-10
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (7)

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Working Paper: Saving the American Dream? Education Policies in Spatial General Equilibrium (2021)
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