We study the effects of intergovernmental grants on school spending within the Finnish system of high school education funding. Using a kinked grant rule, the system allocates lump-sum intergovernmental grants to local high school education providers. Utilizing the quasi-experimental variation in grants given by the rule, we identify the effects of the grants on municipal high school education expenditures. Our results indicate that the grants stimulate spending, while local tax rates or revenues do not seem to be responsive to the grants, suggesting the presence of a typical flypaper effect. However, we also consider the possibility that the grant responses might be heterogeneous among municipalities. Based on our heterogeneity results, the grant response is positively associated with the share of the high school age population, and a higher share of elderly persons is related to a lower propensity to spend on education out of grant funding. This result is in line with the idea of intergenerational conflict in education spending preferences presented in education finance literature.

中文翻译：

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钱什么时候投入教育？赠款规则的证据

我们研究了在芬兰高中教育资助体系内政府间赠款对学校支出的影响。该系统使用类似的赠款规则，将一次性的政府间赠款分配给当地的高中教育提供者。利用规则给出的补助金的准实验性变化，我们确定了补助金对市政高中教育支出的影响。我们的结果表明，赠款刺激了支出，而地方税率或收入似乎对赠款没有反应，表明存在典型的飞纸效应。但是，我们还考虑了拨款回应可能在市政当局之间异类的可能性。根据我们的异质性结果，赠款响应与高中年龄人​​口的比例呈正相关，老年人所占比例较高，是由于赠款资金中用于教育的支出倾向较低。这一结果与教育财政文献中提出的教育支出偏好的代际冲突思想相吻合。