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An alternative instrument for private school competition

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  • Cohen-Zada, D.
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    Abstract

    Empirical studies estimating the effect of private school competition on student outcomes commonly use the share of Catholics in the local population as an instrument for private school competition. I show that this is not a valid instrument since it is endogenous to private school competition and suggest using instead the local share of Catholics in the population in 1890 and its squared term. These instruments are very strong and are also exogenous to both student achievements and private school competition. I further show that using the current Catholic share as an instrument results in seriously flawed estimates of the effect of private school competition on math test scores and on educational attainment, to the extent that significant positive effects of private school competition on these outcome measures do not hold when the historical Catholic share in 1890 is used as an alternative instrument. The historical Catholic share in 1890 can also be applied to estimate the treatment effect of Catholic schools.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 28 (2009)
    Issue (Month): 1 (February)
    Pages: 29-37

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    Handle: RePEc:eee:ecoedu:v:28:y:2009:i:1:p:29-37

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    Web page: http://www.elsevier.com/locate/econedurev

    Related research

    Keywords: School choice Demand for schooling Catholic share Catholic schools Competition;

    References

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    1. Evans, William N & Schwab, Robert M, 1995. "Finishing High School and Starting College: Do Catholic Schools Make a Difference?," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 941-74, November.
    2. Jepsen, Christopher, 2002. "The role of aggregation in estimating the effects of private school competition on student achievement," Journal of Urban Economics, Elsevier, vol. 52(3), pages 477-500, November.
    3. Dee, Thomas S., 1998. "Competition and the quality of public schools," Economics of Education Review, Elsevier, vol. 17(4), pages 419-427, October.
    4. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2000. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," NBER Working Papers 7831, National Bureau of Economic Research, Inc.
    5. William Sander, 1996. "Catholic Grade Schools and Academic Achievement," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 540-548.
    6. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
    7. Hamilton, Bruce W. & Macauley, Molly K., 1991. "Determinants and consequences of the private -- Public school choice," Journal of Urban Economics, Elsevier, vol. 29(3), pages 282-294, May.
    8. Greene, Kenneth V. & Kang, Byung-Goo, 2004. "The effect of public and private competition on high school outputs in New York State," Economics of Education Review, Elsevier, vol. 23(5), pages 497-506, October.
    9. Donald W.K. Andrews & James H. Stock, 2005. "Inference with Weak Instruments," NBER Technical Working Papers 0313, National Bureau of Economic Research, Inc.
    10. J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers 185, Massachusetts Institute of Technology (MIT), Department of Economics.
    11. Thomas Dee, 2005. "The Effects of Catholic Schooling on Civic Participation," International Tax and Public Finance, Springer, vol. 12(5), pages 605-625, September.
    12. Jinyong Hahn & Jerry Hausman, 2002. "A New Specification Test for the Validity of Instrumental Variables," Econometrica, Econometric Society, vol. 70(1), pages 163-189, January.
    13. Cragg, John G. & Donald, Stephen G., 1993. "Testing Identifiability and Specification in Instrumental Variable Models," Econometric Theory, Cambridge University Press, vol. 9(02), pages 222-240, April.
    14. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
    15. William Sander, 1999. "Private Schools and Public School Achievement," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 697-709.
    16. Cohen-Zada, Danny & Justman, Moshe, 2003. "The political economy of school choice: linking theory and evidence," Journal of Urban Economics, Elsevier, vol. 54(2), pages 277-308, September.
    17. Neal, Derek, 1997. "The Effects of Catholic Secondary Schooling on Educational Achievement," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 98-123, January.
    18. West, Edwin G & Palsson, Halldor, 1988. "Parental Choice of School Characteristics: Estimation Using State-Wide Data," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 725-40, October.
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    Cited by:
    1. Pierre Lefebvre & Philip Merrigan, 2009. "Public Subsidies to Private Schools Do Make a Difference for Achievement in Mathematics: Longitudinal Evidence from Canada," Cahiers de recherche 0935, CIRPEE.
    2. Cohen-Zada, Danny & Elder, Todd, 2009. "Historical religious concentrations and the effects of Catholic schooling," Journal of Urban Economics, Elsevier, vol. 66(1), pages 65-74, July.
    3. Oliver Falck & Ludger Woessmann, 2013. "School competition and students’ entrepreneurial intentions: international evidence using historical Catholic roots of private schooling," Small Business Economics, Springer, vol. 40(2), pages 459-478, February.
    4. Green, Colin P. & Navarro-Paniagua, María & Ximénez-de-Embún, Domingo P. & Mancebón, María-Jesús, 2014. "School choice and student wellbeing," Economics of Education Review, Elsevier, vol. 38(C), pages 139-150.
    5. Kim, Young-Joo, 2011. "Catholic schools or school quality? The effects of Catholic schools on labor market outcomes," Economics of Education Review, Elsevier, vol. 30(3), pages 546-558, June.
    6. Carattini, Juliana F. & Dills, Angela K. & Mulholland, Sean E. & Sederberg, Rachel B., 2012. "Catholic schools, competition, and public school quality," Economics Letters, Elsevier, vol. 117(1), pages 334-336.
    7. Y. Emre Akgunduz & Janneke Plantenga, 2013. "Competition for a better future? Effects of competition on child care quality," Working Papers 13-14, Utrecht School of Economics.
    8. Buly A. Cardak & Joe Vecci, 2013. "Catholic School Effectiveness in Australia: A Reassessment Using Selection on Observed and Unobserved Variables," Working Papers 2013.05, School of Economics, La Trobe University.
    9. Sander, William, 2010. "Religious background and educational attainment: The effects of Buddhism, Islam, and Judaism," Economics of Education Review, Elsevier, vol. 29(3), pages 489-493, June.
    10. Rebecca Allen & Anna Vignoles, 2009. "Can school competition improve standards? The case of faith schools in England," DoQSS Working Papers 09-04, Department of Quantitative Social Science - Institute of Education, University of London.

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