In this essay, possible mechanisms which may lead to discrimination in the allocation of inputs to public education are discussed. A model of market discrimination in the supply curve for public school teachers is explained and tested using data from the Boston Metropolitan Area. The consequences for the distribution of teacher inputs in the Boston area of the measured discrimination are then explored. School systems with more non-white students, other things being equal, in the Boston area appear to have greater expenditures per pupil. Although these same systems receive more of some of the measures of teacher quality, relative expenditures per student, for these communities, is much greater than relative measured input per student. State and Federal aid appear to go more to school systems with more non-whites, especially Federal aid. There is little evidence that aid programs are generally redistributive towards low-income groups. The results of the study raise the possibility that decentralized ghetto school systems may have to pay a very high price for teachers in a free market. (Author/JW)