BOULDER, CO (July 3, 2024)—What motivates parents to spend more money on their children’s education? Is it a decline in funding for public schools? Is it the racial/ethnic composition of school districts? And does such additional spending come in the form of tuition for private schooling to substitute public schooling? Or does such additional spending come in the form of payment for supplements to public schooling?

Thomas Downes and Kieran Killeen aim to answer these questions in this inaugural IPSEP working paper, When Schools Spend Less, Do Families Spend More? The Responsiveness of Supplementary Education Spending to Changes in the Local Schooling Context.

Basic to their analysis are data on school spending from the National Center for Education Statistics as well as data on family spending from the Panel Study of Income Dynamics. Downes and Killeen focus, in particular, on local public education spending, local public school demographics, and spending by families on either supplementary education (in the form of academic tutoring, music or art lessons, or coaching in various sports) or private education.

What Downes, an associate professor of economics at Tufts University, and Killeen, an associate professor of educational leadership and policy studies at the University of Vermont, find is that spending on such enrichment or private education is not significantly related to local public education spending. However, they do find that such spending is significantly related to the racial/ethnic composition of school districts. Specifically, Downes and Killeen conclude “that families spend more when they reside in districts with higher fractions of minority students” and they suspect that such families spend much, if not all, of this additional funding on tuition for private schooling.

Downes and Killeen concede that residential choices by families muddy this picture “because the link between residential choice and a community’s racial/ethnic composition is so strong.” Migration from a diverse city to a homogeneous suburb with better-funded schools accordingly stands to nullify the need for families to spend much on supplementary education.

What nevertheless appears quite clear from this study is that upper-income families either stay in racially or ethnically diverse districts and pay the so-called “private school tax” to exit the system or they leave such districts for homogeneous suburbs because that tax may be too high. In either case, the parents of these families follow the script described by A.O. Hirschman in Exit, Voice, and Loyalty (1970): they exit the system and take with them their voice to bring about smaller classes, higher teacher pay, modern science labs, and better school lunches, all of which they afford their own children in private or suburban public schools.

With this novel approach to family spending on education, buttressed with abundant citations and five tables of telling data, Downes and Killeen shed new light on school choice and, specifically, the impact of racially or ethnically diverse communities on family decision-making. The upshot is, in essence, white flight or some socioeconomic variation on it. What holds in this regard across the United States pertains to many countries around the world, where residential preference, school choice, and private spending are likewise significantly related to the racial/ethnic composition of communities. Understanding this dynamic is critical to improving school integration and, by extension, civic engagement and intergenerational mobility.

Find When Schools Spend Less, Do Families Spend More? The Responsiveness of Supplementary Education Spending to Changes in the Local Schooling Context, by Thomas Downes and Kieran Killeen, at: https://nepc.colorado.edu/publication/ipsep-working-paper-1