DEMOGRAPHIC STRUCTURE AND THE POLITICAL ECONOMY OF PUBLIC EDUCATION

Author: Poterba, J.M
This paper examines the relationship between demographic structure and the level of govemment spendingon K-12education. Panel data for the U.S. states over the 1960-1990 period suggests that an increasein the fraction of elderly residents in ajurisdictionis associated with a significant reduction inperchild educational spending. This reduction isparticularly large when the elderly residents and the school-age population are from different racial groups. Variation in the size of the school-age population does not result in proportionate changes in education spending, so students in states with larger school-age populations receive lower per-student spending than those in states with smaller numbers of potential students. These results provide support for models of generational competition in the allocation of public sector resources. They also suggest that the effect of cohort size on government-mediated transfers must be considered in analyzing how cohort size affects economic well-being. Click here to read more.

NBER Working Paper 5677, July 1996