The Private and Public Effects of School Reform

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The expansion of public education at the beginning of the twentieth century had a profound effect on the American economy. This dissertation explores the impact of changing educational institutions on both individuals and communities with a study of Iowa during its introduction of modern grammar schools and high schools during the first decades of the twentieth century. Through the construction and analysis of two new datasets containing unique school district data and intergenerational income and educational attainment data, we demonstrate that school expansion had significant effects, both positive and negative, on local economies well beyond the private returns to education. The first chapters focus on the effects of improvements in public school access and quality on intergenerational mobility. We link multiple censuses and school district records together to create a dataset of intergenerational income and educational attainment data. These data reveal a dramatic decline in intergenerational income mobility concurrent with the massive expansion of public grammar schools and high schools. We find that communities with better public schools had lower mobility rates than communities with poor schooling resources. Educational attainment estimates reveal that this seemingly counterintuitive result was a product of wealthy families' educational investment decisions being much more responsive to increasing school access than those of poor families. The final chapters focus on the effects of educated individuals on their neighbors. We begin with an examination of agricultural innovation during the public school expansion and show that education was helping farmers successfully experiment with and adopt new technologies. The practices of educated farmers could be replicated by their neighbors, creating the potential for human capital spillovers. To test for these spillovers, we construct a dataset linking income and educational attainment data for farmers to spatial data for their farms. Using these data, we estimate that an additional year of education not only raised a farmer's own earnings but also significantly increased the earnings of his neighbors, revealing an important public dimension to schooling. These findings, coupled with the mobility results, capture the complicated and important role public school expansion had in the development of the American economy.

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  • 09/18/2018
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