School Reforms and School Spending Growth

The evolution of school spending over time is related to legislative school reforms expanding the scale and the scope of the school system. This study addresses the determination of legislative reforms and primary school spending, using a data base for Norway 1880 1990. Reforms are understood as the result of growth in demand for school services over time and economic and political conditions conducive to reform. 10 school reforms are identified during the period, and they are shown to be systematically related to characteristics of the political structure. School spending is analyzed both as an aspect of reform and by assuming separability between legislative reform decisions and implementation of reform through central government bargaining with teacher unions and local government priority. When legislative reform is treated as an independent determinant of school spending, we find that reforms drive up teacher employment and that local governments react with a cost saving strategy increasing the class size. Date: May, 1998 Department of Economics, Norwegian University of Science and Technology, N-7055 Dragvoll, Norway * Comments from seminar participants at the Public Choice Society meeting in San Francisco, the European Economic Association meeting in Toulouse, and the Norwegian University of Science and Technology are appreciated, in particular from Grayham E. Mizon, Dennis Coates, Kjetil Andersson and a referee.