Three essays in education policy and human capital accumulation

From 1955 to 2007, student-teacher ratios decreased substantially in public and private U.S. K-12 schools, respectively. The literature identifies two possible explanations: rising non-teaching productivity and rising skill premium. The first essay presents a static model of public and private school coexistence and asks whether these explanations apply to private school, and under what conditions. I find that the market structure of the private school market determines whether student- teacher ratios in private school fall or stay the same as non-teaching productivity or skill premium rises. The second essay addresses education and human capital accumulation in a developing country context where both public and private resources are involved in human capital accumulation. We fit the model to an Indian state and experimentally increase public funding for human capital accumulation and show that the growth effects are small. The reason for the modest results is largely attributable to a type of crowding out of private spending on human capital accumulation. Further, we emphasize and illustrate the role that substitutability of public and private inputs affect these experimental results. Finally, the third essay examines the nature of capital spending by public schools in Michigan during a period in which school finance changed dramatically. In Michigan prior to 1994, schools received funding at the local district level, primarily through locally-voter approved property taxes. After the reform, the primary source of funds shifted to the state level. I use school district-level spending data and address how capital spending changed over a period straddling the reform. I encapsulate my findings in three points. First, capital spending exploded in the mid-1990's and the timing corresponds to the reform. Second, the distribution of capital spending grew wider post-reform. Third, in 2000 district wealth had a smaller impact on capital spending per student than in 1990.