Equity and resources: An analysis of education finance systems

Raquel Fernández, Richard Rogerson

Research output: Contribution to journalArticlepeer-review

74 Scopus citations

Abstract

We analyze five education finance systems: local, state, foundation, power equalizing with recapture (PER), and power equalizing without recapture (PEN). In a calibrated model, we find that finance systems have large effects on educational resources and equity. The trade-off between equity and resources, however, is not monotone. Ranking systems by expected utility, we find that PER consistently ranks highest, though it provides fewer resources to education than the foundation and PEN systems and is less equitable than a state system. We prove that for an important subset of preferences, PER will win in majority voting comparisons with the other systems.

Original languageEnglish (US)
Pages (from-to)858-897
Number of pages40
JournalJournal of Political Economy
Volume111
Issue number4
DOIs
StatePublished - Aug 2003
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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