Economic Geography and Public Goods: How the Local Economy Shapes Education Preferences

Author – Kattalina Berriochoa.

Abstract :

Education is commonly thought to be a machine for social mobility and the expansion of education generally enjoys an overwhelming degree of public support. In countries where educational systems vary greatly across geography, however, we find considerable variation in public support for public education systems. This brings into question the factors that shape individuals’ support for the expansion of educational opportunity. While support for education has generally been examined through the lens of individual attributes such as ideology, income, and educational attainment, other relevant factors such as economic signals remain under-examined. This paper takes a first step at disentangling these potentially competing explanations for the determinants of support for education. It puts to test the idea that potentially low economic returns to education hinder individual support, even among individuals who themselves are highly educated (and personally benefit from the provision of education). Using the case of the United States, the paper examines the local economic factors that might also shape individual support for education based on the education-economy nexus in which local economic cues raise expectations that the education is “worth the cost.” This paper echoes the widely held contention that economic decline (growth) means less (more) support for fiscal spending, but redirects it toward the importance of the local economy for education. Based on time-series individual level survey data and county-level data of the local economy for the United States, it finds that local economic experiences crucially explain education preferences. Even after controlling for individual-level factors such as income and education, local trends in economic wellbeing and development increase public support of a state legislature raising funding for education. These results suggest that individuals in places that are doing “well” are more likely to support education funding, highlighting a potential barriers that may deter investment in human capital from fulfilling its promise as a machine of social mobility. Taken together, the findings point toward a powerful interplay between local economic conditions as signals that shape public demand for funding public education.