Efficient and Equitable Delivery of Education in a District-Based Public School System

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AbstractSBR-9905706Public education in most of the United States is provided through district-based public school systems in which a household's residence determines which public school its child is eligible to attend. This differs dramatically from non-district based public school systems observed in other countries and often results in a bundling of housing/neighborhood and school quality choices for most households. Furthermore, as is well-known, dramatic differences in public school qualities across districts often emerge in this system even if (as in California) financial resources per pupil have been largely equalized. These quality differences are likely to be due to other factors such as peer effects which, even in a state financed system, differ dramatically across districts.Aside from the obvious equity concerns often raised in courtrooms and policy circles, the nature of district-based school systems gives rise to two distinct types of inefficiencies. First, the bundling of housing and school service choices entailed in such a system may force households whose demands for education are high (low) and whose demands for housing are low (high) to over-consume (under-consume) housing or alternatively under-consume (over-consume) education services, and some low income households may be completely priced out of good school districts. Second, the distribution of student types across public and private schools in district-based systems is far from uniform and may, depending on how peer effects operate, give rise to inefficient mixing of students.This research program is therefore intended to investigate these sources of inefficiencies and inequities inherent in district-based public school systems. It merges insights from economic models of education into a well-developed local public finance literature to generate a comprehensive framework in which parents choose where to live, where to send their children to school and how to vote in elections over education issues. Furthermore, it allows for a wide variety of housing/neighborhood structures and state school finance policies which can be calibrated to readily available data. This model will be used both to identify and quantify the inefficiencies and inequities in district-based public school systems and to discriminate between various policy alternatives. Such alternatives include different types of state aid programs, private school vouchers, and more radical policies such as a switch to non-district based public school systems.