Local Taxes and Parental Choice of Education: The Case of Pennsylvania

Abstract

In this paper, we empirically examine the link between local taxes and education choice. Due to the endogenous relationship, 2SLS estimation is applied to correct for simultaneous equations bias. A total of 500 school districts in the state of Pennsylvania during the school years 1999-2000 to 2001-2002 are selected for a case study. Results indicate that local taxes per student are positively associated with private school enrollment rates, implying that increases in these enrollments greatly benefit public schools through tax support.Local Taxes