Long-run effects of local government mergers on educational attainment and income

Abstract

Local government mergers are an important policy issue in many countries, yet empirical evidence of the effects of merging and of local government size on the production and quality of local public services is scarce. We use the spatial and temporal variation in forced mergers between cities and their surrounding local governments in Norway to provide quasi-experimental evidence of the effect on long-run student outcomes. We find that the mergers increase students’ educational attainment by about 0.1 years and income by about 4%, suggesting that mergers improve long-run student outcomes through increased school productivity.