School resources and labor market outcomes: Evidence from early twentieth-century Georgia

The relationship between school resources and students' labor market outcomes has been a topic of debate among economists for the last half-century. The release of the 1940 United States census, the first to ask questions regarding income, allows for a closer examination of this relationship for those born in the early twentieth century. I link children residing in Georgia in 1910 to their responses as adults to the 1940 census and to district-level measures of school revenues. Georgia is attractive as a case study since State School Fund allocation rules provide a plausibly exogenous source of variation in school district revenues. The results suggest that a 10 percentage point increase in school revenues for the first three years of an individual's schooling increases educational attainment by more than a third of a year and weekly wage earnings in adulthood by 7.14% (e(0.0069x10) - 1) on average for whites.