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The Effect of California Proposition 13 and Similar Education Finance Reforms on Public and Private School Enrollments

Bishnoi, Vikram (2011)
Honors Thesis (36 pages)
Committee Chair / Thesis Adviser: Carlson, Leonard A
Committee Members: Hershatter, Andrea ; Frisvold, David
Research Fields: Economics, General
Keywords: California ; Arizona ; Oregon ; Proposition 13 ; Measure 5; Education; Enrollments
Program: College Honors Program, Economics
Permanent url: http://pid.emory.edu/ark:/25593/9340x

Abstract

Abstract
The Effect of California Proposition 13 and Similar Education Finance Reforms on Public and Private School Enrollments
By Vikram Bishnoi


How public schools should be properly funded has long been a debated subject. Whether solely local and
municipal governments should fund public school education or whether state and federal governments
should aid the schools has been a particular issue for the state of California. With the passage of State
Amendment Proposition 13 (1978), California saw a shortfall in overall funding towards its public
schools and a sharp decline in spending-per-pupil due to a lower collection of the state property tax. This
paper examines resulting changes in public and private school enrollments in California through a
difference-in-difference approach with neighboring states, Oregon and Arizona, and their corresponding
school financing reforms. Evidence suggests that Proposition 13 did result in increased private enrollment
relative to public enrollment whereas control groups Arizona and Oregon did not, although there were
decreasing total and per-pupil education expenditures post-legislation for each of the three states.

Table of Contents

Table of Contents

CONTENTS
1. Introduction ............................................................................................................................1
2. Prior Literature .......................................................................................................................4
3. Tiebout Model/Theory ............................................................................................................6
4. Data........................................................................................................................................8
5. Control Groups - Arizona and Oregon ..................................................................................11
6. Empirical Models..................................................................................................................13
7. Results..................................................................................................................................16
8. Discussion and Conclusion ...................................................................................................21
References ................................................................................................................................24
Appendix ..................................................................................................................................25

LIST OF TABLES
Table 1: Description of Variables ..................................................................................25
Table 2: Summary Statistics ..........................................................................................26
Table 3: Correlations.....................................................................................................27
Table 4: Empirical Models ............................................................................................28

LIST OF FIGURES
Figure 1: Private to Public Enrollment Ratio..................................................................29
Figure 2: Total Education Expenditure Per Public School Student.................................29
Figure 3: 10-90th Percentile Differences (Education Expenditure).................................30
Figure 4: 25-75th Percentile Differences (Education Expenditure).................................30

Files

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