The Impact of Early Investments in Urban School Systems in the United States

Cities in the United States dramatically expanded spending on public education in the years following World War I, with the average urban school district increasing per pupil expenditures by over 70 percent between 1916 and 1924. We provide the first evaluation of these historically unprecedented investments in public education by compiling a new dataset that links individuals to both the quality of the city school district they lived in as a child and their adult outcomes. Using plausibly exogenous growth in school spending generated by anti-German sentiment during and after World War I, we find that school resources significantly increased educational attainment and wages later in life, particularly for the children of low socioeconomic status households. Increases in expenditures can explain between 26 and 36 percent of the sizable increase in educational attainment of cohorts born between 1895 and 1915.