Edited by John Yinger
For the last 30 years, beginning with the 1971 landmark Serrano v. Priest decision in California, state courts have been inundated with challenges to the constitutionality of their state-based systems for financing elementary and secondary education. However, since many states employ different equity standards and definitions of education, and more importantly, since legal standards vary among states and over time, it has been exceedingly difficult to distill a general theory of educational finance that explains the behavior of individual states. Fortunately, interested readers need wait no longer; in this excellent and timely new book, Yinger not only makes sense of the various state-based experiments in educational finance, but also presents a unifying theory that has powerful implications for the design of such systems. The book itself is divided into two parts. The first part focuses on many of the general issues in the reform of state aid to education (e.g., selecting aid formulas, adjusting for disadvantaged students and district accountability); the second part presents detailed case studies of recent ambitious school finance reform in five states. Although highly technical, this is a must-read for academics and policy makers. Summing Up: Highly recommended. Upper-division undergraduates and above.
F. Galloway, University of San Diego, Choice. Middletown: April 2005. 42 (8), pg 1448.
This edited volume examines key issues and recent developments in education finance reform and how these policy decisions impact educational opportunities for poor children. The book is quite timely given the proliferation of legal challenges to state education finance systems in recent years along with the increasing role states are required to play in education under the federal legislation No Child Left Behind. The volume provides an excellent overview of education finance and should be a valuable resource for policymakers, scholars, and educators.
The first half of the book consists of four chapters that discuss general issues relevant to state aid reform, including the legal history and theories underlying constitutional challenges to state finance systems and the interaction between accountability and finance reform. The first chapter, which provides a clear and thorough overview of many key concepts, is particularly useful. Among other things, the author discusses the most common aid formulas, describes the equity and adequacy objectives of finance 838 Journal of Economic Literature, Vol. XLIII (September 2005) reform, highlights the importance of accounting for differential costs, and reviews the issue of district supplementation of state aid. Another chapter focuses on the limits of state aid policies in general equilibrium, emphasizing the role of private schooling, housing markets, and nonfinancial inputs to the education process. While the partial versus general equilibrium distinction is well-known to economists, this discussion serves as a good introduction to noneconomists and provides economists with useful benchmark effects based on simulations from a computable GE model.
The second half of the book consists of five chapters that examine in greater detail school finance reforms in Kansas, Kentucky, Michigan, Texas, and Vermont. These chapters provide a wealth of background information that will be useful to serious scholars, but perhaps contain too many details for the casual reader. The most attractive feature of these chapters is that they not only provide details of the reforms themselves, but also examine the impacts on student performance as well as expenditures. Given the invariable space limitations, however, this breadth comes at the expense of depth. Data and identification issues, for example, are not as thoroughly discussed, as they would be in a rigorous program evaluation. Finally, it is worth noting that the volume includes three appendices that provide a state-by-state guide to court decisions and funding formulas, which will be extremely useful to researchers.
While this volume covers many central issues in education finance reform, several topics deserve greater attention. The first is the relationship between financial resources and student outcomes. A fundamental assumption underlying education finance reform is that financial resources will improve student outcomes. While certainly plausible, decades of research have suggested the link is not nearly as clear as one might expect. There is evidence, for example, that public school districts do not hire the best teachers available to them and that the current pay structure in most school systems results in compressed wage schedules that do not reward performance. Also, recent research on teacher labor markets suggests that nonfinancial factors, such as student characteristics and geographic preferences, play a large role in teacher location and transfer decisions. At best, education finance reform can be seen as a necessary but not sufficient condition for enhancing school quality. A second issue is the relative costs and benefits of the different taxes utilized under alternative finance systems. Finance reform is one of the areas within education in which economists have considerable insight to offer policymakers. The chapter on Michigan briefly reviews evidence on the incentive effects of sales vs. property taxes, but the volume would benefit from a more comprehensive discussion of these issues Finally, this reader would have benefited from an interpretative summary of the five case studies that integrated the lessons from these experiences into the existing literature.
Overall, however, this volume serves as an excellent introduction for the causal reader and a valuable resource for the serious scholar, or anyone who seeks to leave no child behind.
Brian Jacob, John F. Kennedy School of Government, Harvard University, Journal of Economic Literature, September 2005. pg. 838.
The editor of the book, John Yinger, has assembled an interesting group of authors to survey the issues around state aid reform and to analyze the reforms in specific states. The book is a good reference work from two perspectives. First, it provides a good overview of state aid financing schemes and of the issues one should consider when constructing or studying the effects of a state aid finance plan. Second, it provides a nice set of within–state analyses of specific reforms. The book, however, is not exhaustive in its review of the existing literature, nor does it address specific empirical analyses and the issues associated with these analyses. Any reader of this book should use it as a stepping-stone for understanding the various issues associated with state education finance. Full review available to members at: http://ntj.tax.org
A. Abigail Payne, McMasters University, Hamilton, Ontario, Canada, National Tax Journal December 2005. pg. 843-46. (Abstract)