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dc.contributor.authorChakrabarti, Rajashrien_US
dc.contributor.authorRoy, Joydeepen_US
dc.date.accessioned2010-12-07en_US
dc.date.accessioned2012-08-17T14:32:52Z-
dc.date.available2012-08-17T14:32:52Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/60763-
dc.description.abstractThis paper examines the effects of constraints in a Tiebout framework applied to school finance reforms. We use data from Michigan, which enacted a comprehensive school finance reform in 1994 that, in effect, ended local discretion over school spending. This scenario affords us a unique opportunity to study the implications of imposing limits on local government's control over the quality of local public goods. We find that the reform was successful in overturning existing trends toward increased disparities. However, the reform also constrained the highest spending districts and was associated with negative effects on their subsequent educational outcomes. These results survive several sensitivity checks. Going behind the black box to look at whether the reform affected incentives and responses, we find that loss of discretion appeared to act as a strong disincentive to high-spending districts and, more generally, across the board. The performance improvements of the lowest spending districts were likely related to relative increases in spending rather than higher effort. This same finding is corroborated by results from an alternative strategy, which exploits differences in the nature of incentives faced by districts in more competitive areas versus those in less competitive areas.en_US
dc.language.isoengen_US
dc.publisherFederal Reserve Bank of New York New York, NYen_US
dc.relation.ispartofseriesStaff Report, Federal Reserve Bank of New York 471en_US
dc.subject.jelH4en_US
dc.subject.jelI2en_US
dc.subject.ddc330en_US
dc.subject.keywordTiebouten_US
dc.subject.keywordschool financeen_US
dc.subject.keywordincentivesen_US
dc.subject.keywordcompetitionen_US
dc.titleEffect of constraints on Tiebout competition: Evidence from the Michigan school finance reformen_US
dc.typeWorking Paperen_US
dc.identifier.ppn641193386en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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