The U.S. saw a sharp and persistent decline in public school enrollment alongside a surge in homeschooling during the COVID-19 pandemic. This paper examines the role of work-from-home (WFH) in driving these changes. WFH may lower the cost of homeschooling through greater flexibility and reduced commuting, but productivity disruptions and shifts toward private schooling may offset these effects. We combine national data on public and private enrollments with newly assembled district-level homeschooling counts. Using variation in telework potential across local labor markets in a difference-in-differences framework, we find no aggregate decline in public school enrollment, but declines in private enrollment and corresponding temporary increases in homeschooling. The aggregate public school result masks heterogeneity: urban public schools experience declines, partially offset by gains in more remote areas. These enrollment shifts are critical for school finance, as they directly affect state aid formulas and therefore local district spending.
States are primarily responsible for financially supporting local governments, but the federal government occasionally assists localities directly, an approach that can be burdensome to administer. We examine whether federal aid to states affects the aid local governments receive from them using the CARES Act. We estimate causal effects by leveraging a provision favoring smaller states and a hand-assembled dataset of state-to-local subawards. Greater federal aid to states increased transfers to local governments, both through pass-through funds and states’ own resources, but at the cost of a substantial subsidy to states, with no guarantee of how much reached localities or when.
The rise of remote work following COVID-19 represents a persistent structural shift in the U.S. labor market. As work becomes less tied to place, changes in residential location, spending patterns, and commercial property demand are reshaping local tax bases. Existing research has examined telework’s fiscal effects, but is often limited to specific states or individual tax instruments. This paper provides a comprehensive national analysis of how telework affects local revenues, including property, income, and sales taxes. We construct a unique panel dataset of local tax revenues from state administrative records, harmonized across jurisdictions, and apply a difference-in-differences design comparing cities and counties in high- versus low-telework labor markets. This framework allows us to identify fiscal disparities across jurisdictions with differential exposure to remote work and draw implications for intergovernmental policy in an increasingly location-flexible economy.
In addition to pensions, most state and local governments provide other post-employment benefits (OPEB), such as health insurance. However, these benefits are often unfunded, and rising health care costs are projected to increase the fiscal pressure on governments. As a result, many agencies may modify OPEB offerings to limit future costs. This paper examines how such policy changes affect employee behavior, particularly retirement decisions, which in turn influence overall fiscal outcomes. For example, reducing or eliminating retiree health coverage may delay retirement among older workers, thereby increasing payroll costs. Using hand-collected data on retiree health insurance provisions from collective bargaining agreements and administrative retirement records from a sample of New York school districts, we analyze the labor supply effects of OPEB changes. Our findings contribute to a deeper understanding of the trade-offs involved in OPEB reform and its implications for fiscal sustainability and workforce management.