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 WWI, 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. “Every great war in which the United States has played a part has been followed by educational developments of supreme national importance…Although the United States was engaged in the World War less than two years, the effects upon education resulting from this brief period of warfare will perhaps prove to be as far-reaching and as important as those growing out of any previous war…Undoubtedly the World War was the most important factor in awakening the American public to the inadequacy of its educational provisions and in arousing the States to vigorous efforts to improve educational conditions.” —Fletcher Harper Swift, Biennial Survey of Education 1920–1922, Volume 1, (1924, pp. 1–2).