Inequality and school funding in the United States, 1890
Vollrath, Dietrich
This paper examines the relationship of inequality to school funding within counties of the U.S. in 1890. Inequality, measured here on the basis of farm-size distributions, is found to significantly decrease property tax revenues used specifically for education across the entire sample of 2124 coun- ties. However, the relationship is non-monotonic within the sample. For counties with the highest inequality, the effect of inequality on school taxation is actually positive. In contrast, counties with the lowest inequality display a negative connection of inequality and taxation. The non-linear relationship can be explained within a median-voter model once the nature of the property tax assessment process in this period is incorporated. Specifically, with assessment rates declining in wealth, the non-monotonic relationship of inequality and school taxation is predicted by the median-voter model.
Event: Annual Bank Conference on Land Policy and Administration
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