"Using a panel of U.S. school districts spanning 1970 - 2000, we examine the relationship between income inequality and fiscal support for public education. In contrast with recent theoretical and empirical work suggesting a negative relationship between inequality and public spending, we find results consistent with a median voter model, in which inequality that reduces the median voter's tax share induces higher local spending on public education. We estimate that 12 to 22 percent of the increase in local school spending over this period is attributable to rising inequality"--National Bureau of Economic Research web site.

Using a panel of U.S. school districts spanning 1970 - 2000, we examine the relationship between income inequality and fiscal support for public education. In contrast with recent theoretical and empirical work suggesting a negative relationship between inequality and public spending, we find results consistent with a median voter model, in which inequality that reduces the median voter's tax share induces higher local spending on public education. We estimate that 12 to 22 percent of the increase in local school spending over this period is attributable to rising inequality.

This dissertation uses the institutions of public schooling in the U.S. as a lens to study how broad economic trends -- rising income inequality and the business cycle -- affect household residential choice, neighborhood composition and popular support for local public goods. The first chapter explores the consequences of rising neighborhood inequality for public schools. Income inequality across neighborhoods more than doubled in the U.S. between 1970 and 2010. This spatial reallocation may affect public schools through changes to the distribution of peers and support for local taxes. I find that rising neighborhood inequality within a school district increases local school funding, but also depresses human capital investment, primarily due to a widening gap between low- and high-income neighborhoods. These results are robust to instrumenting for changes in neighborhood incomes with the initial allocation of households interacted with differential national trends in household income growth by percentile. The second chapter proposes an economic model to explain these findings. Public schools are customarily funded by a district-wide property tax, yet school quality varies considerably within districts due partly to neighborhood differences in student preparedness. In response, high-income households may choose to cluster in a few neighborhoods, lowering the average income of households in the other neighborhoods. The district's median voter, to compensate for a decline in peer quality in her own neighborhood, may elect to raise the district-wide tax rate. Consistent with the implications of this model, I find empirically that declining income in the median voter's neighborhood is associated with increasing local tax revenue per household. The third chapter examines the business cycle dynamics of public school quality valuation. While the value of school quality improvements is critical to human capital investment decisions and education policy, little is known about how it varies with the business cycle. We apply a hedonic pricing model to data on home sales in Los Angeles County between 2000 and 2013 to study changes over time in homeowners' valuations, exploiting elementary school attendance boundaries to provide identifying variation. We find that homeowners' valuations are countercyclical -- they value quality improvements more during "busts" than in "booms."

Sponsored by the Association for Education Finance and Policy (AEFP), this groundbreaking new handbook assembles in one place the existing research-based knowledge in education finance and policy, thereby helping to define this evolving field of research and practice. It provides a readily available resource for anyone seriously involved in education finance and policy in the United States and around the world. The Handbook traces the evolution of the field from its initial focus on school inputs and the revenue sources used to finance these inputs to a focus on educational outcomes and the larger policies used to achieve them. It shows how the current decision-making context in school finance inevitably interacts with those of governance, accountability, equity, privatization, and other areas of education policy. Because a full understanding of the important contemporary issues requires input from a variety of perspectives, the Handbook draws on contributors from a variety of disciplines. While many of the chapters cover complex state-of-the-art empirical research, the authors explain key concepts in language that non-specialists can understand.