The impact of school and college expenditures on the wages of southern and non-southern workers

Based on previous evidence of diminishing earnings returns to greater educational expenditures, the hypothesis that southern schools and colleges have greater returns than non-southern schools and colleges is tested but is not accepted. Per pupil expenditures for both school and college, however, significantly raise earnings for southern male full-time workers. The elasticity of expenditure with respect to the wage for high school graduates is 0.1212 for southerners and 0.0360 for non-southerners, and the elasticity for college expenditure is 0.0468 for southerners and 0.0260 for non-southerners. The author is grateful to Philip R. P. Coelho, W. Lee Hansen, Wayne H. Joerding, Victor J. Tremblay, and an anonymous referee for helpful suggestions and to the Mississippi Research and Development Center for support of this research.