Schooling and domicile in the US

Education upto the high school in the bastion of the free market is a predominantly government monopoly. Public schools in the US provide free education and generally maintain very good standards, whereas private schooling is very expensive and most often inferior to the public schools. Local governments spend considerable resources and attention towards maintaining standards and infrastructure in these schools. Public schools are therefore the preferred schools of choice for both rich and the poor.

In contrast, public schools in India are epitomes of neglect and apathy. The rich and even the middle class have fled government schools leaving only the children from poor families, and that too out of compulsions arising from the high costs of private education. It is ironical that in a developing country like India, basic education is increasingly being dominated, atleast in the urban areas, by private schools, whereas public schools are the overwhelmingly dominant service providers in the US.

The public schools in the US are run by the local town councils, and financed by the property and other local government taxes. These schools are also accountable to very active Parent Teacher Associations (PTAs). Admission in these public schools are restricted to the local tax paying residents. Unlike in India, it is not possible for residents of one town to send their children to the neighbouring town which has a better public school. Public school admission is therefore determined exclusively by the place of residence. In other words, the sole criterion for admission to a public school is local domicile.

With public school standards varying across towns, school quality becomes one of the most important (in some cases the most important) determinant of domicile. Localities with good quality public school becomes an attractive location for prospective home buyers, and this demand in turn bids up land and house values in these areas. The higher property values translates into higher property taxes, which in turn generates more money for the school, thereby further improving the school quality. It also sets in motion a virtuous positive feedback on the quality of education, as these parents are more likely to be demanding on school quality standards.

There is a flip side to this arrangement. The higher property values attracts the richer and more well off and makes the area unaffordable for the poorer. So we have school choice driven agglomeration economics, which results in socio-economically segregated areas. This emergent phenomenon is discussed in an earlier post here.