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American Economic Journal: Economic Policy: Vol. 5 No. 3 (August 2013)

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Local Responses to Federal Grants: Evidence from the Introduction of Title I in the South

Article Citation

Cascio, Elizabeth U., Nora Gordon, and Sarah Reber. 2013. "Local Responses to Federal Grants: Evidence from the Introduction of Title I in the South." American Economic Journal: Economic Policy, 5(3): 126-59.

DOI: 10.1257/pol.5.3.126

Abstract

We analyze the effects of the introduction of Title I of the 1965 Elementary and Secondary Education Act, a large federal grants program designed to increase poor students' educational services and achievement. We focus on the South, the poorest region of the country. Title I increased school spending by $0.50 on the dollar in the average southern school district and by more in districts with less ability to offset grants through local tax reductions. Title I-induced increases in school budgets appear to have reduced high school dropout rates of whites, but not blacks.

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Authors

Cascio, Elizabeth U. (Dartmouth College)
Gordon, Nora (Public Policy Institute, Georgetown U)
Reber, Sarah (UCLA)

JEL Classifications

H52: National Government Expenditures and Education
H75: State and Local Government: Health; Education; Welfare; Public Pensions
I21: Analysis of Education
I28: Education: Government Policy
J15: Economics of Minorities, Races, and Immigrants; Non-labor Discrimination

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