School Funding and Inequality in the Rural United States, 1890

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.

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Dietrich Vollrath,
Dec 3, 2012, 12:27 PM
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tax_final.dta
(396k)
Dietrich Vollrath,
Oct 14, 2013, 4:57 PM
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tax_final_reg.do
(5k)
Dietrich Vollrath,
Oct 14, 2013, 4:57 PM