Essays on the Economics of Education and Fiscal Federalism
- Author(s): Coyne, David;
- Advisor(s): Cullen, Julie;
- et al.
This dissertation focuses on topics related to public finance and explores the incidence of policies on residents and firms. Chapter 1 asks how school districts choose to allocate their limited funding across constituent schools. It finds that school accountability policies can explain some of the variation in within-district funding, specifically finding that districts target schools that are relatively close to school accountability rating thresholds, which are based on the percent of students passing a standardized achievement test in the Texas sample analyzed. It predicts that a typical school receives 2.5 percent more per pupil funding for each percentage point closer it is to a rating threshold. This effectively redistributes funding away from schools who are not close to these rating thresholds, including very high- and very low-performing schools. Chapter 2 asks how local fiscal outcomes respond to changes in federal deductibility of state and local taxes. It finds that raising the tax price of state and locally provided goods and services by 1 percent through limiting the deduction lowers the use of local deductible taxes by 3.5 percent and lowers the total expenditures of local governments by over 2 percent. It further finds that completely cutting the deduction for state and local taxes would not disproportionately hurt resource-poor areas, making such limits potentially progressive policy options. Chapter 3 analyzes how taxes are passed through to consumers around state borders in the context of state motor fuels taxes. Using high frequency price data and precise location data for gas stations it compares how prices change in response to changes in tax rates both near state borders and on the interior of states. It finds that stations near a border pass through about 43 percentage points less of a tax than those on the interior of a state. Furthermore, it shows evidence of tax spillovers, with stations near a border passing through about 35 percent of tax changes from neighboring states. The results suggest that the incidence of a state motor fuels tax falls relatively more heavily on residents towards the interior of a state and on firms closer to state borders.