Education Achievement in Segregated School Systems: The Effects of "Separate-But-Equal"

Educational achievement in segregated school systems was considerably lower in the black schools than in the white schools. Economic historians have argued that the racial achievement gap reflected the discriminatory funding of the black schools. This paper assesses counterfactually the historical effects of a "separate-but-equal" policy of educational finance. Using cross-sectional data from 1930 and 1940, I estimate race-specific educational production functions. Eliminating race differences in inputs supplied by school boards explains 40-50 percent of the racial achievement gap, depending on how achievement is measured.The remainder appears to reflect the impact of family background on achievement, of which the most important effect was adult black illiteracy, a legacy of slavery and educational backwardness in the late 19th century. The paper also shows how school boards' marginal valuation of black achievement can be recovered from the production function estimates. Compared to preferences that would have led them to voluntarily practice equality,Southern school boards judged black achievement to be worth roughly half the value they placed on white achievement.