California's School Finance Reform: An Experiment in Fiscal Federalism

The 1971 ruling of the California Supreme Court in the case of Serrano v. Priest initiated a chain of events that abruptly ended local financing of public schools in California. In seven short years, California transformed its school finance system from a decentralized one in which local communities chose how much to spend on their schools to a centralized one in which the state legislature determines the expenditures of every school district. This paper begins by describing California's school finance system before Serrano and the transformation from local to state finance. It then delineates some consequences of that transformation and draws lessons from California's experience with school finance reform.

Human Capital and Interethnic Marriage Decisions

Despite a longstanding belief that education importantly affects the process of immigrant assimilation, little is known about the relative importance of different mechanisms linking these two processes. This paper explores this issue through an examination of the effects of human capital on one dimension of assimilation, immigrant intermarriage. I argue that there are three primary mechanisms through which human capital affects the probability of intermarriage. First, human capital may make immigrants better able to adapt to the native culture thereby making it easier to share a household with a native. Second, it may raise the likelihood that immigrants leave ethnic enclaves, thereby decreasing the opportunity to meet potential spouses of the same ethnicity. Finally, assortative matching on education in the marriage market suggests that immigrants may be willing to trade similarities in ethnicity for similarities in education when evaluating potential spouses. Using a simple spouse-search model, I first derive an identification strategy for differentiating the cultural adaptability effect from the assortative matching effect, and then I obtain empirical estimates of their relative importance while controlling for the enclave effect. Using U.S. Census data, I find that assortative matching on education is the most important avenue through which human capital affects the probability of intermarriage. Further support for the model is provided by deriving and testing some of its additional implications.