Archived Information

School Finance: Chapter 70 Program

Economic Analysis of the "Wage Factor" Concept

Currently, the Chapter 70 foundation budget relies upon U.S. Census-based "labor market areas" as well as annual wage reports submitted to the Commonwealth's Division of Employment and Training, to estimate geographic differences in the cost of providing education. In order to inform the current debate concerning many aspects of Chapter 70 and the school building assistance formula, the Department contracted in 1999 for an economic analysis of the "wage factor" concept with Economic and Policy Resources, Inc. of Williston, VT. The purpose of the study was identify and quantify regional education cost differences within Massachusetts, and to explore and recommend a sound approach for incorporating those measurable and meaningful differences into the state's Chapter 70 and construction aid formulas. Related questions, concerns or comments can be submitted to Roger Hatch, Adminstrator of School Finance, at the Department of Education (rhatch@doe.mass.edu).

The report and attached tables:

• Report: An Analysis of Geographic Differences in School Operating and Construction Cost

• Table 1. Massachusetts Towns and Cities By Labor Market Area (LMA):

• Table 2. Massachusetts Labor Market Areas (LMAs) Payroll, Average Employment and Average Wage 1995-1997:

• Table 3. Preliminary Grouping of Massachusetts LMAs By Relative Wage Distribution--Chapter 70 Cost of Living/Operating District Index:

• Table 4. Massachusetts Towns and Cities By Labor Market Area (LMA) - Adjusted:

• Table 5. Massachusetts Labor Market Areas (LMAs) Payroll, Average Employment, and Average Wage 1995-1997-Adjusted:

• Table 6. Adjusted Grouping of Massachusetts LMAs By Relative Wage Distribution--Chapter 70 Cost of Living/Operating District Index: