ESTIMATING LOCAL REDISTRIBUTION THROUGH PROPERTY-TAX-FUNDED PUBLIC SCHOOL SYSTEMS

Local intra-suburban heterogeneity implies the possibility of redistribution through local public taxes and expenditures, yet there are no studies of the extent of such transfers. This paper provides evidence that local redistribution in the property-tax-financed school systems in suburban Chicago is substantial, amounting to $2.3 billion or two-thirds of property-tax-financed school expenditures. Most of those transfers flow from households with no children enrolled in local public schools to those with children in the local public schools, rather than from households with high-value homes to those with lower-valued homes.