Effects of decentralization on school resources

Sweden has undertaken major national reforms of its school sector, which, consequently, has been classified as one of the most decentralized ones in the OECD. This paper investigates whether local tax base, grants, and preferences affected local school resources differently as decentralization took place. We find that municipal tax base affects per pupil spending in the same way regardless of whether the school sector is centralized or decentralized, but has a smaller effect on teacher-pupil ratio after the reforms. The less-targeted grants are the fewer teachers per pupil do the municipalities employ. The results for local preferences are less clear-cut.