Sean P. Corcoran and William N. EvansNBER Working Paper Series No. 16097 (2010)
Using a panel of U.S. school districts spanning 1970 - 2000, the authors examine the relationship between income inequality and fiscal support for public education. In contrast with recent theoretical and empirical work suggesting a negative relationship between inequality and public spending, they find results consistent with a median voter model, in which inequality that reduces the median voter's tax share induces higher local spending on public education. The authors estimate that 12 to 22 percent of the increase in local school spending over this period is attributable to rising inequality.