Volume 12, Number 4 (Fall) 1977
Akin, John S., and Irwin Garfinkel. 1977. "School Expenditures and the Economic Returns to Schooling." Journal of Human Resources 12(4):460-481.
The extent to which higher per pupil expenditures lead to any desirable outputs is an important policy question. We develop several alternative models which relate per pupil school expenditures to achievement orientation, verbal ability, years of schooling, and earnings. Our results indicate that the point estimate for the rate of return to increases in per pupil school expenditures is quite respectable for whites and very high for blacks irrespective of the model used. However, in one plausible model it is not possible to reject the hypothesis that the rate of return to whites is zero. In contrast, the results for blacks are not only consistently large, but also robust.
Akin is Assistant Professor of Economics, University of North Carolina, Chapel Hill. Garfinkel is Director of the Institute for Research on Poverty and Professor of Social Work, University of Wisconsin-Madison. The research reported here was supported in part by funds granted to the Institute for Research on Poverty, University of Wisconsin-Madison, pursuant to the provision of the Economic Opportunity Act of 1964. We also received funding from NIE grant No. NE6-00-3-0164. John Bishop, James Murphy, Thomas I. Ribich, the editor, and two anonymous referees have been very helpful. All errors and opinions are those of the authors alone.
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