INTEGRATION AND UTILIZATION OF PUBLIC EDUCATION RESOURCES IN REMOTE AND HOMOGENOUS AREAS: A CASE STUDY OF THE UPPER PENINSULA OF MICHIGAN

I. INTRODUCTION One reason for studying the efficiency of public education lies in the role that education is thought to play in increasing the lifetime income of individuals and in accelerating economic growth. Although not without controversy, education is being increasingly stressed as a source of economic growth. (1) There is mutual feedback between the higher income and more prosperous lifestyles caused by economic growth with the effectiveness and efficiency of the educational system in the community. In this article, the relative economic efficiency of school districts in the Upper Peninsula of Michigan (UP) is measured, and community factors such as income are used to test for the existence of feedback from community factors to educational efficiency. The results are checked for robustness using both extreme-bound analysis and thick modeling to compare different model specifications. The UP was selected for study because it is a homogenous, culturally distinct region isolated from Michigan, other parts of the United States, and from Canada by history and geography. Although part of Michigan, it was not until 1957, when the Mackinac Bridge was completed, that the UP was physically connected with the rest of the state. (2) The UP was settled early because of its presence on the Great Lakes, which provided easier transportation, and its natural resources. Much of its economy is still based on these natural resources with mining, tourism, and forestry being important industries. The UP is sparsely populated, and its mining industry has long been on the decline. The population is racially and culturally highly homogenous, which reduces the possible impact of omitted variable bias on the results of the study. Thus, when studying the efficiency of education, less aggregate data as in the UP case produce more reliable results (Hanushek et al. 1996; Jaggia and Kelly-Hawke 1999). Furthermore, Michigan in general and the UP in particular are much more homogenous than many other regions in terms of per student funding. (3) Delivering high-quality education more efficiently has become a political and social issue in the United States. Various schemes for improving the quality or the efficiency of public schools have been proposed or enacted. Although there have been many studies of education and the factors that may enhance the quality of education, there have been few studies of the efficiency of public education. Much of the discussion of the shortcomings in public education resulted from declining test scores. A well-known decline occurred in Scholastic Aptitude Test scores. This decline began in 1963 and continued until 1979. A wide range of other test scores, such as the Academic Competency Test, the Iowa tests, and the Minnesota Scholastic Aptitude Test, showed similar declines at all grade levels for a similar period of time. These declining scores influenced educational policy, the education debate, and research on education within the United States. Perhaps the best-known study was the Coleman Report (Coleman et al. 1966). This study has been both controversial and highly unpopular with many educators in part because the results were counter to what many believed would be the case based on their theoretical view or personal experience. (4) Most of the studies have provided little support for the proposition that more financial support for public education will improve education. Although some inputs such as average class size or the educational level of teachers have had little or no evident influence on student performance as measured in these studies, other spending related variables such as average teacher salary have had a positive impact. Furthermore, these studies cannot address the increasingly partisan debate in the United States about education policy because this debate often focuses on claims about the efficiency of public education. In the political arena, policy measures to reform schools are being proposed on the assumption that it is the organization and management of the schools that determines economic efficiency (see Chubb and Moe 1990). …