The Pursuit of Equality Through Education Finance Reform

Abstract

Previous research on how court-ordered equalization affects public school expenditures has not yielded a clear pattern of results. The most comprehensive study to date is that of Murray et al. (1998), which concludes that equalization decisions lead to both lower levels of inequality and higher per-pupil expenditures. After replicating their results, we find that their results are not robust to econometric modifications and the addition of panels of data through 2007, indicating that court-ordered reform does not affect the distribution of expenditures across school districts nor average per-pupil expenditures. Thus almost forty years after the first court-ordered equalization in California, these rulings may have reached the limit of what they are able to achieve in terms of fiscal outcomes.

Keywords: education finance reform, court-ordered equalization, education policy