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

Cities in the United States dramatically expanded spending on public education after World War I, with the average urban school district increasing per pupil expenditures by over 70 percent by 1924. We provide the first evaluation of these unprecedented investments in public education using a new dataset and plausibly exogenous growth in school spending generated by anti-German sentiment. We find that school resources significantly increased educational attainment and wages later in life, particularly for less advantaged children. Increases in expenditures can explain about 40 percent of the sizable increase in educational attainment of cohorts born between 1895 and 1913.