By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.
This paper studies the heterogeneous impact of local government
spending across racial groups. An exogenous increase in spending
results in significant improvement in White, but not Black or
Hispanic, labor market outcomes such as employment rate, weekly
hours worked, and labor income. These effects on adults translate
into their children’s academic performance. White students show
significant improvement in test scores, but Black or Hispanic students
do not. Consequently, the achievement racial gap widens
following an increase in local government spending. These results
highlight the possibility that an increase in local government spending
could unexpectedly increase intergenerational racial disparity.
