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Essays on the Political Economy of Education Reforms

Doctoral thesis for obtaining the academic degree Doctor of Economics

Submitted by

Vigile Marie Fabella

at the University of Konstanz Faculty of Politics, Law and Economics

Department of Economics

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Date of the oral examination: July 5, 2017 First supervisor: Prof. Dr. Heinrich Ursprung

Second supervisor: Assistant Prof. Francesco Scervini, PhD Committee chairperson: Junior Prof. Luna Bellani, PhD

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Acknowledgements

Parts of this work were financed by grants from the Ministry of Science, Research and the Arts Baden-Württemberg, the University of Konstanz Graduate School of Decision Sciences and the Young Scholar Fund.

I am indebted to my supervisors and evaluators. To Prof. Dr. Heinrich Ursprung for his wisdom and patience, to Dr. Luna Bellani for being an excellent example and for enduring all my countless blunders, and to Dr. Francesco Scervini for reading all three of my papers multiple times, each time giving constructive comments. I could not have had better mentors.

I have great respect for Dalila Lindov, Konstantin Bätz, Sebastian Jasyk, Enzo Brox, Marta Franco Domenech and SeenuArun Rajendran for the meticulous data collection they performed for my research projects. This thesis is as much their accomplishment as it is mine.

There is no telling what would have become of me and my dissertation without the constant encouragement and intercession of Andreas Schmitz. Whenever I lost sight of the finish line, he always reminded me of what I came here for. With him there is never a shortage of inspiration.

To my mom, who not once declined to proofread any of my drafts (and did so with such thoroughness), to my dad who steered me into this path and whose passion for research infects my work, and to the rest of my crazy family, I am very grateful for your endless support.

Finally, I cannot end without thanking Genina for the long and heartfelt cards and letters that always appeared in my mailbox when I needed them the most, and Lisa for the hugs, waffles, and frozen yogurt, and access to her wonderful office couch during my all-nighters. To Jan, who managed to keep me from pulling all my hair out at the final stages, and to countless others who, through gestures large and small, somehow got me here, I am deeply grateful.

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Contents

Summary 2

Zusammenfassung 4

1 Political-economic determinants of education reform: Evidence on interest groups

and student outcomes 7

1.1 Introduction . . . 8

1.2 Related literature . . . 9

1.3 Institutional background . . . 11

1.4 Access and quality reforms . . . 11

1.5 Testable hypotheses . . . 14

1.5.1 Strength of teachers’ unions . . . 14

1.5.2 Education Crisis . . . 15

1.5.3 Political determinants . . . 15

1.5.4 Economic determinants . . . 17

1.6 Data on reforms . . . 17

1.7 Estimation strategy . . . 20

1.8 Results . . . 22

1.9 Robustness checks . . . 27

1.10 Conclusions . . . 31

References . . . 32

Appendices 37 Appendix 1.A Descriptive statistics . . . 37

Appendix 1.B Data sources . . . 38

Appendix 1.C Other tables . . . 38

2 Strategic compromise, policy bundling and interest group power 40 2.1 Introduction . . . 41

2.2 Related literature . . . 43

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2.3 Model . . . 44

2.3.1 One policy . . . 50

2.3.2 Two policies . . . 51

2.3.3 A note on the preferences ofI . . . 53

2.4 Empirical case study: California, Illinois and Texas . . . 53

2.4.1 Access and quality education reforms . . . 55

2.4.2 Bill authors and legislative districts . . . 56

2.4.3 Interest group strength . . . 58

2.4.4 Empirical analysis . . . 60

2.5 Conclusion . . . 66

References . . . 67

Appendices 70 Appendix 2.A Mathematical Appendix . . . 70

2.A.1 Proof of Lemma 1 . . . 70

2.A.2 Proof of Lemma 2 . . . 71

2.A.3 Proof of Lemma 3 . . . 71

2.A.4 Proof of Proposition 4 . . . 72

2.A.5 Proof of Proposition 5 . . . 73

2.A.6 Proof of Corollary 1 . . . 73

3 Upward mobility and legislator support for education reforms 74 3.1 Introduction . . . 75

3.2 Related literature . . . 76

3.3 Theoretical model . . . 77

3.3.1 Basic setting . . . 77

3.3.2 Individual preferred tax rate . . . 79

3.3.3 Voting equilibrium . . . 80

3.4 Data . . . 81

3.4.1 Education bills . . . 82

3.4.2 Legislator voting behavior . . . 82

3.4.3 Upward mobility . . . 84

3.5 Empirical strategy . . . 87

3.6 Results . . . 88

3.7 Robustness checks . . . 93

3.8 Conclusion . . . 97

References . . . 98

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Appendix 3.A Identification of inclusive bills . . . 101 Appendix 3.B Data sources . . . 103 Appendix 3.C Other regressions and statistics . . . 104

Complete Bibliography 108

Abgrenzung 116

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List of Figures

1.1 Access and quality reforms, 2008-2013 . . . 18

1.2 Proportion of education bills in US states, averaged across time . . . 19

1.3 Proportion of bills containing student, teacher and school reforms . . . 19

2.1 Relative position of(aI, qI)with respect to to(aG, qG). . . 46

2.2 Government’s best response . . . 48

2.3 Reaction curves ofGandI withαIG= 1 . . . 49

2.4 Example of(aI, qI)and(aG, qG). . . 50

2.5 Strategic compromise . . . 52

2.6 Concave and convex utility functions ofI . . . 53

2.1 Marginal effect of teacher share on quality reforms . . . 62

2.2 Marginal effect of state-standardized teacher counts on access reforms . . . 66

3.1 Education reforms by legislative session . . . 84

3.2 California voters by age group in the 2010 and 2012 elections . . . 85

3.3 Upward mobility over time . . . 86

3.4 Upward mobility across legislative districts, 2008-2011 . . . 87

3.1 Marginal effect of upward mobility . . . 92

3.C.1 Histograms of upward mobility and random mobility . . . 104

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List of Tables

1.1 Terms associated with primary and secondary access and quality reforms in the U.S. 13

1.2 Reverse causality . . . 21

1.3 Baseline regressions . . . 24

1.4 Dummy variable coefficients in the school quality equation . . . 25

1.5 Mutually exclusive access and quality bills . . . 26

1.6 Bills exceeding a term threshold . . . 27

1.7 Union membership . . . 28

1.8 Electoral cycle . . . 29

1.9 Fiscal position . . . 30

1.A.1 Descriptive statistics . . . 37

1.B.1 Variable sources . . . 38

1.C.1 Pairwise correlation of union expenditures . . . 38

1.C.2 Term thresholds across reform types . . . 39

2.1 Terms associated with primary and secondary access and quality reforms in the U.S. 57 2.2 Test of means of author characteristics . . . 58

2.3 Descriptive statistics . . . 59

2.4 District-level teacher statistics by state . . . 59

2.5 Baseline Results . . . 61

2.6 Reform Bundling . . . 63

2.7 Robustness Checks . . . 65

3.1 Inclusive reform terms . . . 83

3.2 Proportion voting yes for each vote round of a bill . . . 84

3.1 Baseline results . . . 89

3.2 Subsample regressions . . . 91

3.1 Robustness checks . . . 94

3.2 Comparing LPM and Probit estimates . . . 95

3.3 Falsification tests. . . 96

3.A.1 List of qualifiers associated with reform terms . . . 102

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3.B.1 Data sources . . . 103

3.C.1 Test of means of legislator characteristics across different subsamples . . . 104

3.C.2 Regression using sample of bills without inclusive reforms . . . 105

3.C.3 Upward mobility interacted with control variables . . . 106

3.C.4 Descriptive statistics . . . 107

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Summary

“Books will soon be obsolete in the public schools.

Scholars will be instructed through the eye.

It is possible to teach every branch of human knowledge with the motion picture.

Our school system will be completely changed inside of ten years.”

Thomas Edison, 1913 A century after the great inventor Thomas Edison’s bold prediction about the future of education, we find ourselves in an era where the school system looks strikingly similar to that of a hundred years ago. Teachers still make lectures in front of students, and students still take notes from the blackboard.1 The motivation for my research springs from the puzzle of why Thomas Edison was sorely mistaken. My work engages with the study of the political economy of education policy formation and the dynamics affecting the passage of education reforms. This dissertation revolves around a few basic questions. What political and economic environment engenders reforms in education? Through which mechanisms do interest groups influence the composition of education policy? What role does social mobility play in the way democratic processes shape education reforms? To answer these questions, I use variations of a unique dataset on education reforms, which I compiled from state-level education legislation in the United States.

While much of the literature on education concentrates on specific education reforms and their impact on education and labor outcomes, my own analysis takes on a broader view of reforms that encapsulates numerous education policies. In the first chapter of my dissertation, I categorize these reforms underaccessorquality, a taxonomy that is generally accepted in the education literature but has never been empirically explored. Linking these reforms with information on teachers’ unions and other socio-economic and educational outcomes at the state level, I obtained initial insights into the determinants of education policy. Reform enactment is influenced by aggregate student performance as well as the political activities of teachers’ unions. I also identified certain nuances by which teachers’ unions promote their political interests. They

1One might argue that we have at least advanced from blackboards to white boards.

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use both lobbying and contributions to opposeundesired reforms, but contributions have an additional role of promotingdesiredreforms. This work has been accepted for publication in the European Journal of Political Economy.

Picking up on these results, I further explore the power of interest groups in affecting policy reforms. In education and many other policy areas, reforms usually consist of a bundle of many policies, each of which could be valued differently by different interests. How these interests influence the composition of policies in a reform bundle is the question I ask for the second chapter of my thesis. In collaboration with Dr. Luna Bellani of the University of Konstanz, we adopt a simple game theoretic lobbying model where an interest group supports one policy in a reform bundle, but opposes another. We find that a policy-oriented government would restrain its proposal of the opposed policy, and over-propose in the favored policy, to improve the chances of reform enactment. In effect, when opposition to a reform is anticipated, there will be strategic bundling of opposed policies with those desired by the opposition. These findings are tested empirically with data on education reforms in the states of California, Texas and Illinois.

The final component of my thesis focuses on another set of stakeholders in the formation of education policy. Again in collaboration with Dr. Luna Bellani, we examine how parents, as voters, might influence the enactment of education reforms. The mechanism of interest is the prospect of upward mobility (POUM), which conjectures that if the poor expect their children to escape from poverty, they will support less redistributive reforms. We develop an electoral competition model where voters are parents who value the future economic status of their children, while children’s economic status is affected by public education and upward mobility. The model predicts a decrease in legislator support for redistributive education policy with a rise in upward mobility. We test this prediction for education reforms with redistributive consequences, calledinclusivereforms, by matching legislative roll-call voting on education bills with a proxy for upward mobility in the legislative districts represented by each legislator.

We find that legislator support for inclusive reforms is less likely the more upward mobility there is in the district of the legislator, in alignment with our model and the POUM hypothesis.

During the course of writing my dissertation, I have come to see what Thomas Edison failed to recognize: that education is entrenched in a complex political process involving different stakeholders with varying, and usually conflicting, interests. Reforming the education system is therefore not as simple as one would expect. Inventing the light bulb was probably easier.

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Zusammenfassung

“Bücher werden in Schulen bald obsolet sein.

Es ist möglich, jeden Zweig des Wissens der Menschheit mit Hilfe von Filmen zu lehren.

Unser Schulsystem wird innerhalb von zehn Jahren vollkommen verändert sein.”

Thomas Edison, 1913 Ein Jahrhundert nach der gewagten Prognose des Erfinders Thomas Edison zur Zukunft der Bildung, finden wir uns in einer Ära wieder, in der sich das Schulsystem seit Jahren kaum mehr verändert hat. Lehrer unterrichten noch mittels Frontalunterricht und Schüler schreiben den Lernstoff von der Tafel ab.2 Die Motivation meiner Arbeit ergibt sich aus der Frage, wie Thomas Edison sich dermaßen irren konnte. Sie befasst sich mit der Politischen Ökonomie der Bildungspolitik, insbesondere mit den politisch-ökonomischen Kräften, die die Verabschiedung von Bildungsreformen beeinflussen. Hierbei sind unter anderem folgende Grundfragen relevant:

Welche politische und wirtschaftliche Umgebung ruft Bildungsreformen hervor? Welche Mecha- nismen ermöglichen es Interessengruppen, die Gestaltung von Bildungspolitik zu beeinflussen?

Wie beeinflusst soziale Mobilität demokratische Prozesse der Bildungsreform? Um diese Fragen zu beantworten, arbeite ich mit einem einzigartigen Datensatzes zu Bildungsreformen, den ich auf Basis von US-amerikanischen Bundesgesetzen erhoben habe.

Während sich der größte Teil der Literatur zur Bildungsökonomik auf spezifische Reformen und deren Wirkung auf Bildungs- und Arbeitsmarkterfolge beschränkt, fokussiert sich meine Arbeit auf Reformpakete, die eine Vielzahl von Bildungsmaßnahmen beinhalten. Im ersten Kapitel meiner Dissertation unterscheide ich diese Bildungsreformen in Zugangsreformen und Qualitätsreformen. Hierbei handelt es sich um eine Taxonomie, die in der bildungsökonomis- chen Literatur anerkannt ist, bisher aber noch nicht Eingang in empirische Untersuchungen gefunden hat. Ich verbinde Informationen zu Bildungsreformen mit Informationen zu Lehrergew- erkschaften, sozio-ökonomischem Hintergrund und Bildungserfolg, und erhalte so erste Einblicke

2Wobei man anmerken kann, dass wir uns zumindest von „Black Boards“ (Tafeln) zu White Boards gesteigert haben.

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in die Einflussgrößen der Bildungspolitik. Es zeigt sich, dass der Erlass von Reformen sowohl durch die Schülerleistung als auch die politischen Aktivitäten der Lehrergewerkschaften beein- flusst wird. Darüber hinaus konnte ich Faktoren identifizieren, die politisch erfolgreich machen.

Es sind vor allem Lobbyismus und Spendenzahlungen mit denen versucht wirdunerwünschte Reformen zu verhindern, wobei Spenden auch dem alternativen Zweck dienen können,erwün- schteReformen zu unterstützen. Dieser Teil meiner Arbeit ist in der Form eines Artikels vom European Journal of Political Economyzur Veröffentlichung akzeptiert worden.

Aufbauend auf diesen Ergebnissen untersuche ich im Folgenden die Fähigkeit von Interessens- gruppen, politische Reformmaßnahmen zu beeinflussen. In der Bildungspolitik beinhalten Reformen oft eine Vielzahl unterschiedlicher Maßnahmen, die von verschiedenen Interessens- gruppen unterschiedlich bewertet werden können. Das zweite Kapitel meiner Dissertation befasst sich daher mit der Frage, wie diese Interessenslagen das Schnüren von Maßnahmenbündeln beeinflussen. In Zusammenarbeit mit Luna Bellani habe ich ein einfaches, spieltheoretisches Lobbyismus Modell entworfen, in dem jeweils eine Interessensgruppe eine Maßnahme eines Reformbündels unterstützt und eine andere bekämpft. Wenn eine Regierung zu einer Reform Widerstand erwartet, wird sie die auf Ablehnung stoßenden Maßnahmen strategisch vorteilhaft mit befürworteten Maßnahmen zu einem Bündel kombinieren. Diese Modellergebnisse testen wir empirisch mit Daten zu Bildungsreformen in den Bundesstaaten Kalifornien, Illinois und Texas.

Das dritte Essay meiner Dissertation rückt eine andere bildungspolitische Interessensgruppe in den Mittelpunkt der Betrachtung. Wiederum in Zusammenarbeit mit Luna Bellani, unter- suchen wir inwieweit Eltern als Wähler die Verabschiedung von Bildungsreformen beeinflussen.

Entscheidend könnte hierbei die Aussicht auf sozialem Aufstieg sein. Wir vermuten, dass El- tern aus schwächeren sozialen Schichten umverteilende Reformen weniger unterstützen, wenn sie glauben, dass ihre Kinder eine gute Aussicht auf sozialen und wirtschaftlichen Aufstieg haben. Wir entwickeln ein Modell, in dem Eltern Wähler sind, die sich um die zukünftige wirtschaftliche Lage ihrer Kinder sorgen. Die spätere wirtschaftliche Lage der Kinder wiederum wird durch das staatliche Bildungssystem beeinflusst. Das Modell prognostiziert einen negativen Zusammenhang zwischen erwarteten Aufstiegschancen und Unterstützung von umverteilenden bildungspolitischen Maßnahmen durch die Wählerschaft. Um diese Vorhersage für die sogenan- ntenintegrativenReformen zu überprüfen, kombinieren wir namentliche Abstimmungen in der Legislative mit einer Proxy-Variable zu sozialen Aufstiegschancen in den jeweiligen Regierungs- bezirken. Wir gelangen zum Resultat, dass die Aufstiegschancen in einem Regierungsbezirk negativ korreliert sind mit der Unterstützung für die Zustimmung zu integrativen Bildungsre- formen. Dieses ist im Einklang mit den Vorhersagen unseres Modells und auch der POUM Hypothese.

Was Thomas Edison in seiner Einschätzung wohl nicht berücksichtigt hat, ist folgendes. Bil-

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verschiedenen Interessensgruppen mit jeweils unterschiedlichen, oftmals konkurrierenden, In- teressenlagen beeinflusst. Sinnvolle Reformen des Bildungswesens sind deshalb nicht so leicht einzuführen wie hilfreiche neuartige Produkte. Die Einführung der Glühbirne war verhält- nismäßig leicht, weil die Verlierer dieser Innovation in einem Marktumfeld kaum wirksamen Widerstand leisten konnten. Würden Produktions- und Konsumentscheidungen demokratisch getroffen, würden wir heute wahrscheinlich noch mit Gaslicht vorliebnehmen müssen.

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C HAPTER 1

Political-economic determinants of education reform: Evidence on interest groups and

student outcomes

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1.1 Introduction

Public education is an important part of the public sector. In the United States for example, a third of state public expenditures are spent on education, making it the biggest expenditure category surpassing health and public welfare (U.S. Census Bureau (2013)). Improving the efficiency of public spending on education contributes to a country’s competitiveness, and such improvements require reforming the education system. Public schools, however, have undergone very few episodes of reform since the Progressive Era (Tyack and Tobin (1994), Moe (2012)).

This fact renders Thomas Edison sorely mistaken when, at the dawn of the motion picture, he predicted that “books will soon be obsolete in public schools. Scholars will be instructed through the eye. It is possible to teach every branch of human knowledge with the motion picture. Our school system will be completely changed inside of ten years” (Smith (1913)). A century later, books are still present in the classroom and the “chalk and talk” structure still prevails as the core of public education. This is because the pace and depth of education reforms belong to a political process where meaningful reforms can be stalled or thwarted. In light of this, the question then becomes: what political and economic environment engenders public education reforms?

In this paper we pursue this question by exploring the political and economic determinants of reforms in public primary and secondary education. We compile a novel dataset of U.S. state education legislation for the period of 2008-2013 and divide reforms into two main types: access and quality. Access reforms push the extensive margins of education by expanding educational opportunities, while quality reforms push the intensive margins by improving the effectiveness of education production (Bonesrønning (2013)). These two types of reforms differ primarily in their effect on stakeholders, which has implications on the dynamics of the political process (Corrales (1999), Grindle (2004)). Quality reforms, e.g. teacher evaluations and curriculum changes, provide benefits to students whose education experience is improved but impose economic costs on well-organized interest groups such as the teachers’ unions. On the other hand, access reforms, e.g. more schools, books, and teachers, have costs that are shouldered primarily by the government and benefits that accrue to teachers who obtain more jobs and better working facilities. Access reforms have historically faced less resistance and are therefore easier to enact than quality reforms. Empirical studies investigating education reforms have mainly involved reforms in quality, and have left reforms in access relatively unexplored (Mintrom and Vergari (1998), Mintrom (2000), Merzyn and Ursprung (2005), Holyoke et al. (2009), Bonesrønning (2013)). Including access reforms in our analysis allows us to elucidate the behavior of interest groups towards reforms that they support and oppose.

The U.S. states are an interesting case for studying education reforms because the federalRace to the Topprogram encouraged reforms in almost all states from 2009 to 2011, pitting states against each other based on certain quality-related criteria. Grants were awarded to states

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1.2. RELATED LITERATURE that demonstrated a high level of improvement and innovation in their education policies. By focusing on state legislation, our study does not suffer from a lack of variation that typically arises when dealing with infrequent reform proposals. Another benefit of using information on legislative education bills is that a number of reforms are proposed each year, allowing us to use as dependent variables the number of bills containing access and quality reforms instead of using the dichotomous reform variables usually employed in the literature (Dreher et al. (2009), Bernecker (2014), Kang (2016), Wiese (2014)).

We find evidence that the political strength of teachers’ unions have a positive influence on access reforms and a negative influence on quality reforms. This is the first study that provides empirical evidence for the differentiated stance of teachers’ unions vis-a-vis quality and access reforms. Furthermore, we group the reforms into school, teacher, and student reforms, to highlight which elements of the school system are being targeted. Our results show that during times of unfavorable education outcomes, such as falling performance in standardized tests, politicians respond by enacting more school reforms, both access and quality in nature. Finally, we find that unions use different means of advancing their political interests. Both lobbying and contributions are effective at opposingundesired quality reforms such as school choice.

Meanwhile, contributions have an extra effect of enactingdesiredreforms, but only those from which teachers reapdirectbenefits.

This paper proceeds as follows. Section 1.2 provides a review of the existing literature. Section 1.3 introduces the institutional background and Section 1.4 elaborates on the two education reforms. Section 1.5 discusses the testable hypotheses while the data and estimation strategy are presented in Sections 1.6 and 1.7. In Section 1.8, the results are presented and some robustness checks are made in Section 1.9. Finally, Section 1.10 concludes.

1.2 Related literature

Since access reforms have largely been uncontroversial, the bulk of empirical literature on education reforms is concentrated on the more contentious quality reforms. This strand of literature explores education reforms from three points of view: the reform advocates (Mintrom (2000), Mintrom and Vergari (1998)), the voters (Merzyn and Ursprung (2005)), and the interest groups (Hoyt and Toma (1993), Bonesrønning (2013), Holyoke et al. (2009)).

To the best of our knowledge, no previous study has considered both access and quality reforms together in a single empirical framework. The three papers that make some headway in this direction are Hoxby (1996), Wong and Shen (2002) and Braga et al. (2013). Hoxby (1996) shows that teacher unionization succeeds in raising school budgets but worsens the productivity of these inputs towards student performance. Her results however relate only to quality and access

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elements of education production, and not to reforms. Wong and Shen (2002) investigate the impact of political electoral dynamics on two reforms that differ in opposition and accountability arrangements. They look at charter school approval and school district takeovers, but do not find any notable effects. More recently, Braga et al. (2013) show that left wing ideologies support inclusive education reforms while right wing ideologies support selective education reforms.

However, they did not analyze other determinants of reform. We take these studies as our point of departure, and extend the literature by considering the role played by an important, but thus far scarcely explored factor to public education reforms: the teachers. Elucidating the mechanisms by which teachers affect reforms produces a more complete picture of the process of reforming the public education system.

This paper also contributes to the literature on special interest politics and rent seeking. In this strand of literature, interest groups impose their influence on political outcomes in the form of lobbying and campaign contributions. A bulk of the empirical work deals with campaign contributions as a proxy for lobbying.1 The motives in giving campaign contributions are twofold: (1) to get favored candidates into office (electoral motive), and (2) to influence policy (influence motive). Numerous papers have been written to test one motive over the other, with some finding support for the electoral motive (Abler (1991), and many for the influence motive (Stratmann (1991), Snyder (1990), Snyder (1992), Snyder (1993)). Particularly interesting for this study is Grossman and Helpman (1996) who argue that campaign contributions are effective in influencing only the policies that clearly have adirectimpact on the welfare of the contributing interest group, because no explicitquid pro quo agreement is made when the contribution is given.

Other studies attempt to measure rent seeking using interest group activities other than donating to campaigns. Wright (1990), for example, uses the number of lobbying contacts a representative has, while Segal et al. (1992) use the number of organized interests who give testimonies for and against Supreme Court nominees. These two studies find that votes are significantly influenced by the relative mobilization of interest groups around a policy or a nominee. Segal et al. (1992) further finds that the impact is stronger when interest groups lobby against—rather than in favor of—a policy, which is validated by Kang (2016) for energy reforms. Despite all these studies, little has been done on how interest groups use different methods of rent seeking.2 Our paper adds to this literature by taking lobbying and contributions as separate activities that an interest group simultaneously undertakes. This allows us to explore the ways in which interest groups employ different tools of influence to serve their political goals.

1See Potters and Sloof (1996) and Stratmann (2005) for an extensive review of the literature.

2The closest that has been done on this front is Lake (2015) who uses lobbying information to disaggregate PAC contributions by policy issue, and contributions information to disaggregate lobbying expenditures by representative.

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1.3. INSTITUTIONAL BACKGROUND

1.3 Institutional background

The U.S. federal government does not dictate a curriculum nor impose any education standards.

The tradition in U.S. education is that of local control. Appointed representatives serve in local education agencies (LEAs) such as school boards or school districts, the idea being that local representatives are better informed about the local situation and thereby better suited to administer schools. These local units are, however, subject to the authority of the state (Hoyt and Toma (1993)). School districts are primarily state creations and most of the regulations regarding catchment boundaries, funding, and programs require state approval (Moe (2012)). Essentially, it is the state that determines the structure of public education.

The federal government nevertheless has some influence on the general direction of American education. The No Child Left Behind (NCLB) Act of 2002 is a case in point. The NCLB Act requires states to conduct annual state-wide standardized assessment tests in order to identify schools that perform badly. Corrective measures are then taken for schools that do not achieve adequate yearly progress (AYP) as defined by each state (Congressional Research Service Specialists and Analysts (2007)). No national standards were put in place as a result of the NCLB, however, and the states were left to determine their own assessment standards. A more recent initiative of the federal government is the American Recovery and Reinvestment Act of 2009 that included theRace to the Top(RTTT) incentive grants. The primary goal of the RTTT grants was to stimulate reforms in the policy areas of school standards, assessments, accountability, and teacher quality (U.S. Department of Education (2010)). The RTTT grants were contestable: they were awarded to those states that were most successful in adopting the kind of reforms envisaged by the federal government. Because the assessment criteria applied to a large number of possible reforms, each state was still free to decide which reforms to adopt.

The NCLB and the RTTT initiatives illustrate that the federal government’s influence on the highly decentralized U.S. education system is at most peripheral. Indeed, before any federal initiatives are adopted, they first need to be voted into law by state legislatures. Ultimately, the policy responsibility of reforming public education in the U.S. remains at the state level.

Studying education reforms therefore needs to focus on state legislation.

1.4 Access and quality reforms

Before we move on to the testable hypotheses, it is worthwhile elaborating on the two types of education reforms central to this study: access reforms and quality reforms.

Access reforms aim to broaden the coverage and scope of education. In doing so, most of the costs are incurred by the government in providing, for instance, new schools and school

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facilities such as libraries and classrooms, as well as in improving school infrastructure such as internet connections and student transportation. This expansion also goes hand-in-hand with administering more programs, hiring more teachers, and sending them to areas with teacher shortages.

Providing better access to education also means increasing opportunities for students whose needs have been historically underserved by the education system. This involves reforms designed to overcome impediments to academic success such as disabilities, income, language and other social and institutional barriers (Access (2014)). Reforms of this type include student financial aid, alternative learning and special needs schools, and education programs for foster children and juveniles. Because access reforms are primarily funded by the government, the costs of implementing these reforms are widely distributed across all taxpayers. The burden is therefore too dispersed to warrant an organized opposition. Essentially, access reforms create more jobs for teachers, tangible benefits to citizens and immediate outcomes for politicians, making them politically popular and easy to enact without formidable resistance (Grindle (2004)).3 These reforms push the extensive margins and are therefore associated with increased resources invested in education.

In contrast, quality reforms aim to improve the productivity and effectiveness of educational investments that are already in place. Examples of these are changing the curriculum, adjusting the class size or instructional time and initiating programs for dropout prevention (Corrales (1999), Grindle (2004)). To improve the productivity of teachers, programs on teacher training and mentoring are put in place. To better prepare students for higher education or for the workplace, college-readiness programs and vocational and technical education programs are introduced.

Education accountability is also an essential part of reforms in quality: schools and teachers must be held accountable for the performance of their students. In line with this principle are policies intended to define, monitor and evaluate the quality of teachers and schools through competitive and performance-based schemes. Standards are set, assessments are conducted and sanctions are imposed on underachieving schools. Such accountability reforms, in essence, endeavor to reorganize incentives to change the behavior of those responsible for student learning. School choice is another example of an attempt to change incentives. Reforms such as charter schools, open enrollment, school vouchers and education tax credits aim to incentivize better school performance by forcing schools to be more responsive to parents’ preferences. These prompt schools to engage in better teaching practices. Empirical work have shown that given more

3Although it might also be the case that the citizenry’s support for access reforms are conditioned by factors such as inequality (Meltzer and Richard (1981)), we argue that those opposed to access are too dispersed to successfully mobilize (Olson (1965)). Jennings (2015) provides some other justification for why voters might favor access reforms through the mechanism of expressive versus instrumental voting.

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1.4. ACCESS AND QUALITY REFORMS school choices, parents indeed tend towards schools with better academic standards (Hoxby (1999), Schneider et al. (2012)), while tighter school competition increases school productivity (Hoxby (2000)), and increases the priority given to teacher quality (Hoxby (2002)).

Since quality reforms target the incentives of teachers and school administrators, they are the ones who carry most of the burden from quality reforms. They incur transition costs from adjusting to a different system or to a new curriculum (Huberman and Miles (1984), Gitlin and Margonis (1995), Sarason (1977)) and they get sanctioned for inadequate performance. Teachers are, moreover, politically organized. Towards the end of the 20th century, teachers’ unions in the U.S. have grown to be one of the strongest forces in American education (Moe (2012)). Like any union, their purpose is to protect and promote their members’ occupational interests. A natural consequence therefore is union opposition to reforms that impose costs on teachers.

Table 1.1.Terms associated with primary and secondary access and quality reforms in the U.S.

Access Reforms Quality Reforms

School-related

Textbooks and instructional materials Class size, curriculum, instructional time

Libraries Intervention strategy for underperforming schools

Broadband, web-based, internet-based or mobile learning School adequate yearly progress and achievement gap Student transportation services School district accountability report card

School or school district procurement Common Core standards

Charter schools, open enrollmenta

Education tax credits, school voucher programs Teacher-related

Alternative routes to teacher certificationb Teaching standards, licensing and certification Teacher shortage areas Teacher preparation, mentoring and evaluations

Critical needs areas Professional development programs

Teach for America program Pay-for-performance, performance compensation Student-related

Student financial aid, equalization grants Student academic evaluation and intervention programs Scholarships, stipends, grants, funding Dropout prevention for at-risk students

Schools for the deaf and blind and other disabilities Math and reading skills proficiency and instruction Opportunities for low-income students, home-schooled,

foster children or juveniles

Science, Technology, Engineering and Mathematics (STEM) programs

English language learners (ELL) programs Career coaching, college or career readiness Alternative learning schools, special education Vocational, career and technical education programs Summer school and after school programs Work-partnership programs, pre-apprenticeship

Dual-credit placement, concurrent enrollment

a Open enrollment allows parents to enroll their children in schools outside of their own school district.

b Alternative routes to teacher certification provides certification opportunities to teachers who might otherwise be uncertified.

The benefits of quality reforms, on the other hand, accrue to all enrolled students whose learning experience is improved, while imposing little cost to the government. But since the benefits are widely dispersed across all enrolled students, parents rarely manage to organize themselves

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in support for quality reforms. A subset of these parents who have both the incentives and the political resources to push for quality reforms are the middle class. However, the middle class often have exit possibilities such as private schools or private tutoring (Corrales (1999)), making them less compelled to demand better quality from public schools. For this reason, support for quality reforms in the policy discourse, though it exists, is unorganized and weak.

Quality and access education reforms therefore differ in their purpose, stakeholders and distribu- tion of stakes. Table 1.1 enumerates the primary and secondary education reforms used in this study.4 In the next section we discuss the mechanisms that may affect the likelihood of these two reforms.

1.5 Testable hypotheses

The primary hypothesis of this paper is that access and quality reforms in education are influenced by political-economic factors. This section discusses these factors beginning from the focal determinant, the strength of teachers’ unions.

1.5.1 Strength of teachers’ unions

Many studies conclude that interest groups play an important role in influencing policy outcomes (Coughlin et al. (1990), Wright (1990), Segal et al. (1992), Grasse and Heidbreder (2011)).

Particularly interesting are studies by Segal et al. (1992) and Kang (2016) that find lobbying against a reform to have a stronger effect than lobbying in favor of a reform.

The influence of interest groups is especially pronounced in the case of education reforms.

Teachers, whose stakes are high and organization costs low, can easily raise lobbying resources aimed at obstructing unwanted quality reforms. Epstein and Nitzan (2004) provide some theoretical foundation for this idea. They developed a lobbying-contest game where, the policy maker, foreseeing the resistance to his preferred policy, strategically restrains his reform proposal in equilibrium to lessen the effort of the opposition.

On the other hand, teachers reap huge benefits from access reforms. Better access means more schools which translates to more jobs. They gain from better school facilities and more instructional materials which improve their working environment. For this reason they are staunch advocates of access reforms. This gives rise to the first hypothesis:

Hypothesis 1

The number of enacted quality (access) reforms vary negatively (positively) with the strength of

4Classifications were based on Grindle (2004), Corrales (1999) and Braga et al. (2013).

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1.5. TESTABLE HYPOTHESES teachers’ unions.

1.5.2 Education Crisis

Existing political economy theories identify a number of mechanisms through which crises can lead to structural reforms. One mechanism involves gauging the tradeoffs between reforming and not reforming. A crisis causes distortions in the payoffs up to a point at which the costs of non-reform exceed the benefits; making the status quo unsustainable. Drazen and Grilli (1993) develop a war of attrition model illustrating how an inflation crisis increases the costs relative to the benefits of waiting for the other group to concede, thereby moving forward the point at which reforms take place. Another mechanism that links crises to reforms is the need for an urgent resolution (Tommasi and Velasco (1996)). In the presence of a crisis, opposition to difficult reforms is dwarfed by the urgency to act, thus allowing policymakers to ensure the passage of contentious reforms by bundling them with reforms that mitigate the effects of the crisis (Rodrik (1992)).

In education, the link between reforms and educational crises are difficult to substantiate using the cost-benefit tradeoff mechanism, given the uncertain nature of the payoffs to education that accrue long into the future. Indeed, there is still little consensus and continuing discourse as to the returns to investment of various education policies.5 A more plausible link between crisis and reforms in education lies in the sense of urgency associated with the occurrence of unfavorable education outcomes. When, for example, the 2012 PISA results revealed that United States 8th graders have been surpassed by their peers in Latvia and Poland, country officials were outraged, and the alarmed Education Secretary promised a redesign of the high school system (U.S. Department of Education (2013)). From this example we arrive at

Hypothesis 2

The number of enacted quality and access reforms increase with a fall in educational outcomes.

1.5.3 Political determinants

The next class of determinants represents ideology and the characteristics of policymakers.

Reforms are primarily the outcome of a political process involving stakeholders with ideological priors. It makes sense therefore to conjecture a link between partisanship and political outcomes.

For education reforms, access and quality policy measures gravitate towards opposite ends of the political spectrum. Access reforms such as student financial support tend to be more inclusive, while quality reforms such as teacher evaluations and school improvement plans tend to be more

5See Murnane and Ganimian (2014) and Glewwe et al. (2011).

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selective. Merzyn and Ursprung (2005) found that nationalist ideologies negatively affect voter support for privatizing education. Similarly, Bonesrønning (2013) gives support for the adverse effect of socialist ideologies on the implementation of accountability school reforms. In line with these studies, Braga et al. (2013) provided evidence that left wing parties in Europe support the more inclusive reforms while right wing parties support the more selective reforms. In the United States, the Democratic Party is perceived to be to the left of the political spectrum, while the Republican Party is to the right of the spectrum. We therefore make the following hypothesis:

Hypothesis 3

Democratic states are associated with more access reforms and fewer quality reforms.

The above hypothesis operates under the assumption that states can be classified under a single ideology. In reality however, state legislatures comprise a mix of different partisanships. It is therefore important to consider the effect of party control on reforms. Most of the literature dealing with divided governments have focused on the gridlock effect of a divided government on reforms (Tsebelis, 1995; 2002). As the number of veto players increase, the likelihood of a reform drops resulting in reform inaction. However, a recent study by Bernecker (2014) found that a divided legislature is more likely to adopt welfare reforms because policy competition between branches of the government induces innovative ideas, resulting in new policies. Holyoke et al. (2009) also find support for this argument. This gives rise to two possible hypotheses:

Hypothesis 4

(Policy competition) States with an ideologically divided government are associated with more reforms.

Hypothesis 5

(Political gridlock) States with an ideologically divided government are associated with less reforms.

Another political factor that has gained some attention in the recent years is the term limit of the politician. The seminal paper in this strand of literature is Besley and Case (1995). Along these lines is also the study by List and Sturm (2006) which has interesting applications to access and quality reforms. Their argument is that term-limited politicians who cannot be re-elected are free to make difficult policy choices without being constrained by their need for votes. They develop a political agency model in which the policymaker decides on a frontline and secondary policy.

The frontline policy is defined as affecting all voters and the secondary policy as affecting only a subset of voters whose stakes are much higher. They find that a policymaker not facing a term limit strategically distorts his policy choices in favor of these high-stakes voters, but he has no

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1.6. DATA ON REFORMS incentive to do so when he cannot be re-elected. By List and Sturm’s (2006) definition, access reforms are the frontline policies while quality reforms are the secondary policies. From their result we thus propose

Hypothesis 6

A term limited state governor is associated with more quality reforms and less access reforms.

1.5.4 Economic determinants

We now turn to the effect of economic determinants on reforms. According to Merzyn and Ursprung (2005), quality reforms are normal goods. That is, demand for quality reforms in the form of education privatization rises with income. They also show that there is a countervailing tax burden effect that creates non-linearities in the income curve. Quality reforms are therefore expected to increase with state per capita income, but at a decreasing rate. The question is whether this is true for access reforms. One can argue that across states, richer states are associated with an already wide-ranging education system such that access reforms are less of a priority. However, within a state, there is no reason to believe that access reforms are less desirable when state income increases. This leads to our final hypothesis:

Hypothesis 7

The number of quality and access reforms vary positively with state income.

1.6 Data on reforms

The information on education reforms was collected from the National Conference of State Legislatures (NCSL) (2014) that records a comprehensive list of enacted U.S. state-level educa- tion bills since 2008. There are a total of 5,544 enacted bills from 2008 to 2013, of which 45%

contained primary and secondary education reforms.6 The information provided by the NCSL on every piece of legislation includes the title of the bill, the authors and their party affiliation, the bill history, and a summary of the bill.

The information presented in the summary, which serves as the “abstract” of the bill, was the primary source of information used to classify the reforms into access and quality. These summaries itemize the issues that are tackled in the bill and the policy measures that the bill introduces or amends. To measure the extent of access and quality reforms in the state for a given year, we use the reform terms in Table 1.1 and count the number of bills for that year that

6The rest of the bills that did not contain any primary and secondary education reforms concerned postsecondary or adult education, bullying laws, campus safety, athletics, nutrition and immunization, school board elections, among others.

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have primary and secondary access- or quality-related terms in their summary.7 Because bills frequently tackle more than one policy issue, the summaries can contain access-related terms, quality-related terms, and sometimes both. In the sample of all education legislation from 2008 to 2013, about 11% contain both access- and quality-related terms.

45678

Number of enacted bills (averaged across states) .511.52 Percent of reform terms in bill summary (averaged across bills)

2008 2009 2010 2011 2012 2013

Year

Access bills in state Access terms in bill

Quality bills in state Quality terms in bill

Figure 1.1: Access and quality reforms, 2008-2013

The result is a panel of primary and secondary public education reforms spanning the years 2008 to 2013 for 50 states.8 Figure 1.1 depicts the number of access and quality bills, as well as all education bills, over time. A number of observations can readily be made. Access reforms are more often pursued than quality reforms as can be gleaned from the darker solid line that is everywhere higher than the lighter solid line. This observation agrees with the speculation that access reforms are less opposed and easier to enact. Another observation is that access bills spiked at 2009. Two things might explain this. First, these access bills could be related to funding in the light of the recession. Second, 2009 was the year the federal government introduced the Race to the Topcontest. Although the contest prioritized quality reforms over access reforms,9 the figure reveals that the state governments’ knee-jerk reaction was to enact more access reform bills. However, during the course of the contest, the intensity of quality reforms increased within

7The drawback of this procedure is that it does not distinguish between progressive or regressive policy changes.

For example, a bill that contains the term “charter schools” could propose either to allow or limit the number of charter schools, the latter being supported, and the former opposed by teachers’ unions. We argue however that identifying the number of bills dealing with such reforms, regardless of the direction, captures the extent to which changes have been made. A number of recent studies also consider policy changes, regardless of direction, to indicate policy reforms (Bernecker (2014), Dreher et al. (2009)).

8We exclude the District of Columbia in our analysis.

9Only one out of 20 selection criteria for the RTTT was related to access, namely criteria F.1: “making education funding a priority”. It was given a weight of 10 points out of the 500 points in total that a state can receive (U.S.

Department of Education (2009)).

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1.6. DATA ON REFORMS a single bill while that of access reforms decreased, as seen from the dashed line that rises for quality and falls for access between 2009 and 2011.

(.3886905,.7866667]

(.339134,.3886905]

(.2951994,.339134]

[.2061432,.2951994]

(a) Access reforms

(.3128028,.5464286]

(.2539302,.3128028]

(.1825536,.2539302]

[.047619,.1825536]

(b) Quality reforms

Figure 1.2: Proportion of education bills in US states, averaged across time

An impression of the spatial variation in the yearly average of access and quality education reforms is given in Figure 1.2. What is clear from the figure is that states that enact many access reform bills (dark-shaded states in 1.2a) are the same states that enact relatively fewer quality reforms bills (light-shaded states in 1.2b), and vice versa. The few exceptions include Ohio and Pennsylvania, which are high in both access and quality reforms, and Texas, which is low in both.

Student, School 3.93%

School 3.29%

Teacher 0.98%

Student 90.81%

Student, Teacher 0.98%

(a) Access reform bills

School 50.22%

Teacher 15.12%

Student 16.06%

Student, School 10.61%

Student, Teacher 1.89%

Teacher, School 4.00%

All three 2.11%

(b) Quality reform bills

Figure 1.3: Proportion of bills containing student, teacher and school reforms

Reforms can also be grouped according to the school unit they involve, i.e. student, teacher or school (see Table 1.1). These categorizations allow us to distinguish between reforms that directly and indirectly affect the interest of the teachers. Figure 1.3 illustrates the breakdown of access and quality reforms according to these reform groups. Note that some legislative bills may have a bundle of policies targeting different groups at a time. Majority of the access bills contain reforms targeted towards students. Meanwhile, about 67% of the quality bills contain policies that target schools (including mixed bills).

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1.7 Estimation strategy

The estimation strategy follows a seemingly unrelated regression (SUR) analysis with access reforms as one dependent variable and quality reforms as another.10 The equations to be estimated are:

Accessst0+Union0stα12M athst3Demst4Divst5T Lst

6(Divst×T Lst) +α7lnIncst +X0stµA1s1t+ust (1.1)

Qualityst0+Union0stβ12M athst3Demst4Divst5T Lst

6(Divst×T Lst) +β7lnIncst+X0stµQ2s2t+vst (1.2) where Accessst and Qualityst are the number of access and quality reform bills enacted in statesduring yeart. We also consider the disaggregated access and quality reform variables divided into three broad categories related to schools, teachers and students, as presented in Table 1.1. The vector for teachers’ union strength, Unionst contains union expenditures for the two largest teachers’ unions in the United States: the American Federation of Teachers (AFT) and the National Education Association (NEA). These expenditures are disaggregated into three categories: (1) expenditures on lobbying, (2) contributions, gifts and grants, and (3) representational activities,11of which contributions and lobbying constitute the resources spent in the effort to influence policy, and therefore represent the unions’ political strength.12 The variable M athst is the change in the state average eighth-grade Math scores in the National Assessment of Educational Progress (NAEP), which is conducted every two years.13 A fall in the performance of eighth-graders in the NAEP indicates the presence of an education crisis.

The variableDemst is the share of democratic votes in the last congressional election, and is the indicator for state ideology. Divst is a divided government indicator that is 1 if the governor does not have the same partisanship as the house and/or the senate majority party. T Lst is an

10Given that the regressors in both access and quality equations are the same, the SUR method is equivalent to running an OLS on each equation separately. The advantage of SUR is that it allows us to conduct cross-equation hypothesis testing.

11Contributions, gifts and grants include grants and other assistance to governments and organizations, while representational activities involve contract negotiations and collective bargaining (Office of Labor-Management Standards (2015)).

12Although it might be more intuitive to take the log of union expenditures, this will cause many observations to be dropped due to zero values. Since spending nothing on political activities may also be an active choice by the unions, dropping them from the sample may cause selection problems. For this reason we have opted to keep the union expenditures in levels. Nevertheless, running the same specifications with transformed union expenditure variables usingln(1 +expenditures)yields the same results.

13To obtain a measure of the change in the scores for all years including non-NAEP years, we imputed the score for the non-NAEP year as the average of the scores in the years before and after.

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1.7. ESTIMATION STRATEGY binary variable for a term limited governor and we include the interaction term(Divst×T Lst)to allow for a more nuanced effect of the two variables. The variablelnIncst measures the natural log of real per capita state income. Finally,Xst is a vector of other demographic and education controls, including the total number of education bills enacted in the state for that year, the state population, the share of the population younger than 18, the share of the population older than 64, public school enrollment rate, public school graduation rate, and a dichotomous variable for whether the state was aRace to the Topcontender for that year. The parametersθis andδit are state and year fixed effects respectively, whileust andvst are stochastic error terms that are potentially correlated due to the fact that bills may contain both access and quality reforms. The regressors are drawn from a wide array of sources. Descriptive statistics of all variables and their data sources are presented in Table 1.B.1.

Table 1.2.Reverse causality

(1) (2) (3)

VARIABLES Contributions,

Lobbying Representational Gifts & Grants Activities Union Expenditures (in millions)

Lobbying 0.0106 0.448***

(0.0190) (0.0495)

Contributions, Gifts & Grants 0.331 0.798**

(0.595) (0.375) Representational Activities 0.0614** 1.076***

(0.0288) (0.119)

School access reforms, lagged 0.0582* -0.0796 0.0425

(0.0317) (0.180) (0.116)

Teacher access reforms, lagged -0.0281 -0.663** 0.319

(0.0609) (0.333) (0.217)

Student access reforms, lagged 0.00711 -0.0737 0.0128 (0.00856) (0.0474) (0.0310) School quality reforms, lagged -0.00495 0.0498 -0.0298 (0.0101) (0.0564) (0.0364)

Teacher quality reforms, lagged 0.0233 0.0872 -0.0577

(0.0177) (0.0992) (0.0640)

Student quality reforms, lagged 0.0121 0.105 -0.0558

(0.0153) (0.0852) (0.0551)

Constant 9.700 10.38 -24.75

(16.03) (89.78) (57.85)

Observations 144 144 144

R-squared 0.9923 0.9799 0.9999

Notes: Standard errors in parentheses. ***p <0.01, **p <0.05, *p <0.1

At this point we would like to address the potential endogeneity of our union variables. Although the omitted variable bias could be dealt with through the inclusion of controls and fixed effects, reforms could still affect the union expenditures, particularly due to reverse causality or simul- taneity. Table 1.2 tests whether the different union expenditure categories depend significantly on the previous years’ access and quality reforms. Except for the coefficient of teacher access on

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lobbying and the coefficient school access on contributions, the estimates are insignificant in all expenditure categories. In the first column, the significant effect of school access reforms on contributions suggest that any effect we will find is biased upwards, that is, the true value of the effect of contributions on school access will be smaller than what we will find in the data. As we shall show in the next section, such bias is not an issue for our results, since no significant effects of contributions are found for school access reforms. Meanwhile, the significant point estimate in the second column reveals that yesterday’s teacher access reforms lower today’s lobbying effort.

The consequence of this is that effect of lobbying on teacher access will be biased downward.

Furthermore, since lobbying and contributions are positively correlated,14the simultaneity may also cause a downward bias in the effect of contributions on teacher access reforms.15 This suggests that the true value of the effect of both lobbying and contribution expenditures is higher than the coefficients we will find for teacher access. These coefficients therefore, if found to be positive and significant, could be thought of as a lower bound of the true effect of contributions on teacher access reforms.

1.8 Results

In this section we discuss the estimation results, beginning with the baseline regressions presented in Table 1.3. The dependent variables in all regressions are measured as the number of bills containing access or quality reforms. All models include demographic and education controls and state and year fixed effects, whose point estimates have been suppressed. Model 1 of Table 1.3 gives the estimates for the regression where the dependent variables include all access and quality reforms. The models in the succeeding columns restrict the dependent variables to reforms that fall under the three broad categories itemized in Table 1.1, namely school reforms, teacher reforms and student reforms.

In terms of teachers’ union strength, two observations can be made from Table 1.3. First, the effect of teachers’ union activities on student reforms are only marginally significant. Indeed, we shall show in the next section that this effect is not robust to changes in the definition of the dependent variables. This gives a sense of the nature of teachers’ union activities, targeting only the policies that have a direct influence on their welfare. Second, both lobbying and contribution activities correlate negatively with quality reforms, as shown in Models 1 and 2 of Table 1.3. That is to say, unions are effective at opposing quality reforms, regardless of which political tool they use to do so. This supports the findings of Segal et al. (1992) and Kang (2016) that the influence on policy is stronger when opposing rather than supporting a reform. When it comes to access reforms, however, the effect is more subtle. Only contributions, gifts and grants have a positive

14See Table 1.C.1 of Appendix.

15See also Wright (1990) and Ansolabehere et al. (2002)

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1.8. RESULTS influence on access, and particularly so for teacher access reforms, from which they derive direct benefits. Such a finding lends support to the influence motive emphasized by the campaign contributions literature. Contributions by an interest group with the intention of “buying” policies are effective only to the extent that reforms most clearly serving the group’s interest are enacted.

Indeed, the fact that teacher access reforms respond significantly to contributions and not to lobbying validates the influence motive, because with contributions there is no explicit quid pro quo announced by the union, merely an understanding conveyed to the politicians that the unions’

interest must be served (Grossman and Helpman (1996)).

The data also reveals some unexpected effects of unions’ representational activities on quality reforms. It appears that the more unions engage in collective bargaining and contract negotiations, the less access reforms and the more quality reforms are enacted. In particular, representational activities have positive and highly significant coefficient for school and teacher quality reforms.

On the one hand, an explanation for this could be that the bargaining that occurs during contract negotiations provides more opportunities to arrive at a compromise between what the teachers demand and what is beneficial for the students. On the other hand, it could be a sign of some

“backfiring” effect. The goal of collective bargaining and contract negotiations is to directly obtain more favorable working contracts, for instance, with higher wages or better benefits. The positive and significant effects of representational activities on quality reforms could signal the expectation of higher quality in exchange for better working conditions, essentially backfiring on the teachers. Furthermore, if politicians have reason to believe that collective bargaining may adversely affect the quality of education, then they might mitigate higher union expenditures on representational activities by enacting more quality reforms. Indeed, Moe (2006) and Anzia and Moe (2014) find that collective bargaining negatively impacts school organization. In particular, the key contractual provision of seniority-based transfer rights allows experienced teachers to avoid disadvantaged schools (i.e. low-achieving schools with high population of minority students), thereby leaving these schools with amateur teachers. That education quality may be adversely influenced by collective bargaining through unfavorable school organization and distribution of teachers may in part explain why representational activities have a positive impact on school and teacher quality reforms.

The question of whether an education crisis induces reforms is answered by the change in NAEP math scores variable. Hypothesis 2 postulates that there will be more quality and access reforms bills during times of worsening educational outcomes. Models 3 and 4 validate this hypothesis. In particular, the negative and significant coefficient on quality reforms indicates that policymakers respond to an educational crisis by enacting more student-related quality reforms such as student remediation and evaluation, and Science, Technology, Engineering and Mathematics (STEM) programs. The positive and significant coefficients of math scores in Models 1 and 2 suggest that policy momentum also plays a role. Good educational performance

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Table1.3:Baselineregressions (1)(2)(3)(4) AllReformsSchoolReformsTeacherReformsStudentReforms VARIABLESAccessQualityAccessQualityAccessQualityAccessQuality UnionExpenditures(inmillions) Lobbying0.0339-0.368***0.0713-0.290**-0.00876-0.0850-0.0182-0.124 (0.140)(0.135)(0.0434)(0.118)(0.0218)(0.0784)(0.136)(0.0844) Contributions,Gifts&Grants1.306*-1.596**0.00103-1.469**0.235**-1.085***1.357*0.0265 (0.747)(0.718)(0.231)(0.630)(0.116)(0.417)(0.722)(0.449) RepresentationalActivities-0.2510.456***0.01830.317**-0.009910.207**-0.2010.0620 (0.158)(0.152)(0.0489)(0.133)(0.0245)(0.0883)(0.153)(0.0951) Changeinmathscores0.1430.340**0.113**0.502***-0.0410*0.01740.0668-0.196** (0.149)(0.143)(0.0462)(0.126)(0.0232)(0.0834)(0.144)(0.0898) Logofrealincomepercapita-10.64-9.012-3.146-1.368-1.008-11.35**-8.5111.063 (8.046)(7.730)(2.490)(6.790)(1.248)(4.492)(7.782)(4.838) Shareofdemocraticvotes0.007470.0323-0.01240.100**0.000687-0.03010.0167-0.0213 (0.0493)(0.0473)(0.0152)(0.0416)(0.00764)(0.0275)(0.0477)(0.0296) Dividedgovernment-0.169-0.951**0.0689-0.946**0.0270-0.157-0.0590-0.241 (0.447)(0.429)(0.138)(0.377)(0.0693)(0.250)(0.432)(0.269) Termlimitedgovernor0.142-0.851*0.0718-0.897**-0.0756-0.03680.193-0.0457 (0.529)(0.508)(0.164)(0.446)(0.0820)(0.295)(0.511)(0.318) DividedgovernmentxTermlimitedgov- ernor0.2031.543**-0.409*1.634**0.09790.4770.1720.341 (0.754)(0.724)(0.233)(0.636)(0.117)(0.421)(0.729)(0.453) Observations179179179179179179179179 R-squared0.8980.8710.5150.8360.3800.6540.8970.644 DemographicandEducationControlsYesYesYesYesYesYesYesYes YearFEYesYesYesYesYesYesYesYes StateFEYesYesYesYesYesYesYesYes

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