School finance reform and voluntary fiscal federalism |
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| Affiliation: | 1. San Diego State University, San Diego, CA, USA;2. Department of Economics, University of California, Santa Barbara, CA 93106, USA;1. Paris School of Economics (EHESS), 48 Blvd. Jourdan, 75014 Paris, France;2. OECD, France;3. Hebrew University of Jerusalem, Israel;4. Brown University, United States;5. MIT, United States;1. Department of Economics, University of Illinois at Urbana-Champaign, Urbana, IL 61801, United States;2. Interdisciplinary Arts and Sciences, University of Washington, Tacoma, WA 98402, United States;1. Victoria Institute for Strategic Economic Studies, Victoria University, Melbourne, Australia;2. Carbon and Energy Markets, Level 43, 80 Collins Street, Melbourne, Australia |
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| Abstract: | California has transferred the financing of its public schools from localities to the state. In response, many families have supplemented the tax revenue of their local public schools with voluntary contributions. This paper analyzes that phenomenon. We propose a model of partial cooperation among parents in making voluntary contributions to their public schools. Under reasonable conditions, the model predicts that contributions per pupil should decline with school size. We estimate this relationship using data on contributions to California schools. Our estimates reveal that contributions per pupil do decline with size; however, the rate of decline is surprisingly slow. |
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