Equity and resources: An analysis of education finance systems

Raquel Fernández, Richard Rogerson

    Research output: Contribution to journalArticlepeer-review


    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
    Issue number4
    StatePublished - Aug 2003

    ASJC Scopus subject areas

    • Economics and Econometrics


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