Explorations in Economic History, 2013, 50, pp. 267-284
This paper examines the relationship of inequality to school funding in counties of the U.S. in 1890. Inequality,
measured here on the basis of farm-size distributions, is found to be negatively related to local school property
tax revenues across the whole sample of 1,345 rural counties. However, further analysis shows that this
relationship is not consistent across the sample. In the North, there is a significant negative relationship
between inequality and school funding, and this relationship is shown to be consistent with the fact that
assessed values of property did not rise linearly with wealth. Across the South, there is no distinct relationship
between inequality and school funding. The results also indicate that inequality in the South cannot directly
explain the gap in school funding with the North, in the sense that redistributing farms in the South to
match the Northern distributions leads to no predicted increase in school funding.
Data and do-file to recreate regression results are posted below.