Interactions between Educational Spending and Student Enrollment

Abstract

This article specifies a two-equation model determining jointly two endogenous variables, public school expenditures per student and public school enrollment per capita, as functions of 16 exogenous variables, and estimates them for a sample of 79 urban areas using two-stage least squares. Expenditures per student are found to be positively related to costs of production and revenue availability and negatively to the enrollment rate and competing demands for revenues. Enrollment as a percent of the population is found to be positively related to spending per student and to the proportion of the population of school age and negatively to the proportion of Catholics.